China's benchmark Shanghai stock index slumped more than five percent on Tuesday afternoon after failing to hold above the key 4,000 point level amid lingering worries over the economy, dealers said.

The Shanghai Composite Index dropped 5.09 percent, or 203.41 points, to 3,790.26. The Shenzhen Composite Index, which tracks stocks on China's second exchange, slid 5.64 percent, or 131.34 points, to 2,196.15.