Asian stocks fall as China halted after market plunge

(AP Photo/Richard Drew). Trader Tommy Kalikas works on the floor of the New York Stock Exchange, Wednesday, Jan. 6, 2016. Spot yuan fell to 6.5945 to the dollar, its weakest since February 2011.

The FTSE 100 Index has dipped below the 6,000 mark following more stock market turmoil in China.

Now the portion of GDP generated by consumers is just 35% in China, vs. 65% in the U.S. “There’s a lot of room for China’s consumer economy to grow, but the transition will be tricky”, says Goei.

Global share falls have been compounded by the slide in the price of oil, with Brent crude collapsing to fresh lows around $33 a barrel.

After Monday’s stock market rout, market players are urging investors not to overreact.

Such is the pull of the world’s second-largest economy. Health care stocks were the biggest gainers as drugmakers moved modestly higher.

This is the second time this week trading on Chinese stock markets has been called off. China’s stock markets saw its first trading halt on Monday after a seven percent plunge in China’s blue-chip CSI300 index triggered in a newly-implemented circuit breaker mechanism.

There was also particularly strong performance in the Chinese resources sector, after Premier Li Keqiang announced the country’s leadership was looking at measures to reduce the coal glut. The market meltdown has prompted a panicked, multibillion-dollar government intervention.

The carnage in China has seeped through to global markets this week and Asian trading floors continued to see red.

For currency markets, the year so far has been dominated by jitters about the slowing Chinese economy.

In addition, the weakening yuan now raises the risk of putting further pressure on emerging market economies and could lead to more broad-based risk reduction, especially since Chinese economic data continues to deteriorate, said Adams. China’s central bank set its daily guidance rate at its lowest in more than 4-1/2 years, triggering selling in offshore yuan, which slumped to its lowest since trading began in 2010.

Japan’s Nikkei extended early losses to 1.4 percent at one point on the news but was off 1 pct by afternoon.

WALL STREET: Major U.S. benchmarks ended Tuesday with tiny gains. Dow and S&P 500 futures were each down 2 percent.

The circuit breakers trip when there are big swings in the CSI 300 index. By the end of trading Thursday, Hong Kong had slumped more than three percent and Tokyo shed 2.2 percent. The index dived a further 2 percent in just two minutes after reopening at 9.57 a.m., and trading was ceased.

The yuan’s fall will likely cause more money to leave China and “creates havoc” for other manufacturing countries in the region, said Peter Boockvar, chief market analyst at The Lindsey Group.

It’s hard to see how the circuit breakers can remain in their current form, seeing that they contribute to the volatility in the Chinese market, instead of calming it. Even China’s securities watchdog, the China Securities Regulatory Commission (CSRC), acknowledged the teething issues.

In currencies, Rabobank picks the Taiwan dollar, the Malaysian ringgit and – of course – the Korean won as those with potential downside, adding that the New Zealand dollar is also vulnerable. This was the lowest point since December 17, when it touched US70.97¢.

Sydney – where several firms with trade links to China are listed – lost two percent and Seoul was 0.8 percent off.