China suspends market circuit breaker mechanism after stock market rout

On Thursday, it was triggered within half an hour of trading, giving China’s stock markets their shortest trading day in 25 years.

China’s central bank had further weakened the yuan for the eighth consecutive session on Thursday, sparking fears of the start of a currency war in the region.

“Currencies are boosted today as China did not devalue its currency, though the Chinese market is still full of uncertainties even with the circuit breaker out of the way”, said Danny Wong Teck Meng, chief executive officer of Kuala Lumpur-based Areca Capital Sdn., which manages about $224 million in assets.

On the commodity markets, February contracts for crude oil reduced their earlier losses to five cents, trading at US$33.92 per barrel, and gold futures rose $12.00 to US$1,103.90 an ounce.

The Dow Jones industrial average skidded 161 points, or 1 percent, to 16,745 as of 11:35 a.m. Eastern.

The benchmark Shanghai Composite Index fell 7.3 percent to 3,115.89. The NASDAQ Composite index is at 4,739 – about 2 percent lower than its opening level.

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It’s been yet another historic day for the Chinese stock market with the whole shebang managing to shut itself down after just 15 minutes of trading.

Sydney – where several firms with trade links to China are listed – lost 2.2 percent and Seoul was 1.1 percent off. There were also big losses in Singapore, Taipei and Manila.

A lower unit should make Chinese exports more competitive on world markets, but at the cost of its imports becoming more expensive in yuan terms. Thursday’s selling was linked to weakness in the yuan, as the government’s decision to let the currency get weaker may be a bad sign of weakness in China’s economy.

However, after the abrupt halt of trading on Thursday, China’s securities regulator suspended the circuit breaker signaling to Beijing that it should find new measures to tame the markets.

European markets also dropped.

That decline was touched off by worries that a dive in China’s stock market would harm that nation’s economy. They plummeted to a new 12-year low Thursday.

Traders tours the greatest Wall Street crashes in history. Macy’s shares, which have been in declined since November, rose $1.37, or 3.8 percent, to $37.50 after the company said it will close 40 stores and eliminate more jobs.