China Halts Trading For Second Time This Week

Chinese stock markets packed enough drama for a few months into a spectacularly condensed half-hour collapse on Thursday. Investors gather near a display board showing the plunge in the Shanghai Composite Index at a brokerage in Beijing, China, Thursday, Jan. 7, 2016.

This is already the second time that trading has been suspended this year.

(AP Photo/Mark Schiefelbein). Chinese investors use a computer terminal to check stock prices in a brokerage house in Beijing, Friday, Jan. 8, 2016.

(AP Photo/Mark Schiefelbein). Chinese investors monitor stock prices in a brokerage house in Beijing, Friday, Jan. 8, 2016.

Trading was halted only 13 minutes into the morning session.

World stock markets tumbled and oil plumbed new depths Thursday as investors feared for the global economy on signs of a dramatic slowdown in powerhouse China.

The Canadian dollar remained near 12 1/2-year lows at 71.07 cents US but rose 0.05 of a cent from Wednesday’s close.

Bonds prices rose. The yield on 10-year Treasury bond fell to 2.15 percent from 2.17 percent.

The rout spilled over into Hong Kong and other major Asian markets, which fell heavily across the region amid fears over the volatility in China’s equity markets during the first trading week of 2016.

Energy firms were among the worst hit after Brent oil prices fell six percent to its lowest finish since July 2004. By 9.58am, when the market halted trading, figures showed the benchmark Shanghai Composite Index had slumped 7.32 percent, or 245.95 points, to 3,115.89.

The Standard & Poor’s 500 index lost 47 points, or 2.4 percent, to 1,943.

“We expect the circuit breaker to be refined in the coming months to help protect rather than squeeze out market liquidity”, he said.

Industrial stocks also fell.

Chinese markets have lurched up and down as regulators gradually withdraw emergency measures imposed after the main stock index plunged in June following an explosive rise.

“We do not think that China will let the move get out of control and would prevent a sharper move or any panic in global markets”, argued Barclays.

Regulators in China called an end to trade within just half an hour of the opening after the People’s Bank of China (PBoC) weakened the value of its yuan currency by 0.51 percent against the dollar.

That circuit-breaker was activated twice this week alone.

The circuit breaker was triggered on both Monday and Thursday, as plunges in the Hushen 300 Index reached seven percent on both trading days.

With the risk-off sentiment making a comeback, overseas investors have become increasingly wary of investing in emerging markets.

Meanwhile, shares in Hong Kong followed the mainland, with the Hang Seng down by 2.3% at 20,509.39 points.

Higher Chinese stocks also supported MSCI’s broadest index of Asia-Pacific shares outside Japan, which erased earlier losses to be up 0.5 per cent. That put it on track for a decline this week of about 6 percent, which would be its biggest fall since August.