Chinese shares stop trading after 7% plunge
07 January 2016, Nirapad News: Trading on the mainland Chinese markets was suspended for the day, after shares plunged more than 7% for the second time this week.
The “circuit breaker” rule, a mechanism introduced to stem volatility in the market, was triggered in the first 30 minutes of trading, reports the BBC.
Investors are nervous after the central bank moved to weaken the yuan.
This indicates that Beijing is looking to boost exports as China’s economy may be slowing more than expected.
The CSI 300 index, which triggers the trading halt, fell 7.2% to 3,284.74. The index is a collection of blue chips stocks from Shanghai and Shenzhen, and first sparked a 15-minute trading halt after it fell 5%.
The mainland benchmark Shanghai Composite index also fell 7.3% to 3,115.89, while the tech-heavy Shenzhen Composite lost 8.3% before trading was stopped.
After the trading halt, China Securities Regulatory Commission announced that major shareholders could not sell more than 1% of a company’s shares within three months as of 9 January.
It comes as a previous six-month ban of stock sales by major shareholders is set to expire on Friday.