China’s market regulators suspend programs that automatically stop trading during declines

Chinese stocks nosedived on Thursday, triggering the second daylong trading halt of…

People walk along a pedestrian bridge with a screen showing Chinese stock prices crashing, Shanghai, January 7, 2016.

Some €2.4 billion was wiped off the value of shares listed on the Iseq in Dublin on Thursday on a day when global stock markets wobbled amid concerns that growth in China is slowing more than previously forecast.

Chinese stock investors play cards in a brokerage house in Beijing, Friday, Jan. 8, 2016. Trading halted temporarily barely 14 minutes into the morning session when stocks plunged 5 percent. The Dow Jones Industrial Average closed down almost 400 points.

On Thursday, U.S. and European stock markets fell sharply after China again suspended trading. While the intervention may reduce selling pressure, it clashes with authorities’ pledge to give markets more sway in the world’s second-largest economy.

The mechanism was meant to calm China’s notoriously volatile markets – which went into a tailspin in mid-2015 – by automatically suspending trading for 15 minutes if they fell by five percent in one day, and closing them early if they dropped seven percent. He said global markets were facing a crisis and investors needed to be very cautious, Bloomberg reported. “Next, the CSRC will carefully sum up the experience and lessons, organize research on improving the mechanism and seek extensive public opinions”, Deng said. Those halts, which were triggered twice this week, are increasingly seen as inadequate measures to prevent volatility. For instance, the S&P 500 will only stop trading for the day in the United States if it plunges 20 percent. The Nasdaq composite index lost 128 points, or 2.6 percent, to 4,707.

“The U.S. economy and the global economy isn’t crumbling”, said Pyle.

USA crude plunged to its lowest level since February 2004.

The euro rose to $1.0849 from $1.0788. West Texas Intermediate, the North American benchmark oil price, slumped 70 cents to US$33.27 a barrel.

Traders tours the greatest Wall Street crashes in history. Financial stocks also slumped. Britain’s FTSE 100 sank 2.7 percent to 5,908.35.

All eyes are on China and its turbulent stock market. Those fears have drowned out signs that the U.S. and Europe are doing fairly well. The latest plunge in Chinese stocks was set off by concern Beijing is allowing its yuan to weaken too fast against the dollar.

Earlier in the week, worries about China were fueled by weaker-than-expected December manufacturing activity.

They plummeted to a new 12-year low Thursday. Copper producer Freeport-McMoRan lost 61 cents, or 9.9 percent, to $5.56.

A six-month ban on selling by large shareholders (ie. stakeholders with holdings over 5 per cent) was due to expire today, but at the time of writing the Chinese government appears to have indicated it will be extended.