Chinese Stock Markets Shut After Shares Fall

Another important factor was the dumping of stocks by investors who anticipated the end of a ban on share sales imposed last summer.

European markets all fell in early trading.

The measure was taken on Monday in what authorities described as a “circuit breaker” mechanism, which is aimed to curb further volatility in the stock market, AFP reported.

In New York, the Dow Jones was down a whopping 377.82 points or 2.17 per cent at 17,047.21, while the S&P 500 retreated 43.49 points or 2.13 per cent to 2,000.45, with technology the weakest among its 10 sectors. The Nasdaq composite gave up 140 points, or 2.8 percent, to 4,867.

Those tensions prompted investors to seek the safety of bonds, with yields on triple-A rated German 10-year Bunds falling 6 basis points to 0.575 per cent.

It was a tough start to a year that analysts said would most likely be characterized by periods of turbulence in Asian equity markets.

Disappointing manufacturing data contributed to the weakness among Chinese stocks and led to worries about the global economy.

In recent weeks the market has been dragged lower by falls in Brent Crude, at around 37.14 USA dollars, as major suppliers such as Saudi Arabia and Russian Federation have continued pumping crude in a bid to defend their global market shares. – January 4: The index loses 6.9 per cent in its first trading day of 2016.

Selling intensified after a brief 15-minute trading halt early in the afternoon when main indexes had shed 5 percent, and activity in Shanghai and Shenzhen was halted for the day soon after. An index of US factory activity fell to 48.2 from 48.6, the Institute for Supply Management said Monday.

The rise came as relations between leading crude producers Saudi Arabia and Iran deteriorated, raising concerns about potential supply disruptions.

Saudi Arabia cut diplomatic ties with Iran after its embassy in Tehran was attacked. Weak Chinese manufacturing and Middle East tensions were catalysts for the sell-off.

Stocks around the globe got clobbered. Japan’sNikkei 225 lost 3.1%. The index closed down 6.9% to 3,296.66. The ISM manufacturing index fell to 48.2 in December, the lowest reading since June 2009 when the Great Recession ended.

China, which was among the big market drags in 2015, was also on Wall Street’s list of potential risks again in 2016.

The FTSE 100 suffered a tough start to 2016 today, following the suspension of trading on China’s Shanghai Composite index as shares plunged 7% in the first session of the year. It was one of the better-performing industries in the market previous year.

“The market will not improve because there will be heavy selling in the near future”, said Huang.