Though not strictly a horror novel, to my mind THE DAY THE SUN DIED by Chinese author Yan Lianke is fantastical and grotesque enough to qualify as such. In this novel, an increasing number of the citizens of a small rural town begin sleepwalking – what they call “dreamwalking – without any apparent cause. During this epidemic of somnambulism, the townspeople begin acting out their secret desires and worst impulses, resulting in a growing number of suicides and eventually murders…

More at the link.