China halted the day’s trading within 30 minutes of opening on Thursday morning as shares plunged by more than 7% – triggering an automatic “circuit breaker” – and authorities accelerated the devaluation of the Chinese yuan.
In less than 30 minutes after the markets opened, the CSI 300 Index plunged by 7 percent,after resuming from a 15 minute trading halt when it triggered the first trading halt at 9:42 am.
The benchmark Shanghai Composite Index dived by 7.32 percent, heading toward an earlyclosure at 3,115.89 points. The smaller Shenzhen Component Index tumbled by 8.35 percentwhile the start-up board ChiNext retreated by 8.66 percent.
The market stampede on Thursday sparked growing criticism of the newly introduced circuitbreaker mechanism which has been seen as a factor that magnified market volatilities.
"Clearly, the tight stops of 5 and 7 percent has the magnet effect as prices gravitate towardsthe breaker and prompts a stampede that drains market liquidity," Hong Hao, chief strategistat investment bank BOCOM International said in research note.
The China Securities Regulatory Commission said earlier that it will improve the circuitbreaker system based on real market operation.
Reference: chinadaily and theguardian.com.
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