China share trade ended after less than 30 minutes

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 sent China’s blue-chip CSI 300 index down 7.21 per cent at 3,284.74 points. China’s weaker yuan fixing spurred selloff in Chinese equities and triggered another daylong trading halt, sending markets across Asia into a tailspin.

Trading was halted just before 10 am (0200 GMT) as a “circuit breaker” kicked in after the benchmark Shanghai index slumped 7.32% and the Shenzhen composite index, which tracks stocks on China’s second exchange, had tumbled 8.35 percent.

“Despite a late recovery in Chinese share prices, markets continue to worry about the potential weakness of the Chinese economy in 2016”, Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor reportedly said.

China’s stock market has skidded this year as the government prepares to remove measures that were introduced last year to prop up share prices after a meltdown in June.

The People’s Bank of China also set its daily yuan reference rate against the dollar at its lowest level in nearly five years, according to Bloomberg News.

In early morning deals in Europe, Frankfurt stocks dived 3.5 percent, Paris shed 2.4 percent and London lost 2.1 percent with China-exposed mining companies falling the heaviest.

Hong Kong’s Hang Seng China Enterprises Index slumped 3.3 percent at 1:13 p.m., heading for the lowest close since October 6, 2011.

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

During that pause, though, many traders put in “sell” orders, which saw the market immediately resume its tumble until it hit the 7% threshold. Elsewhere, the benchmark indexes in Australia, Hong Kong, India, Japan, Singapore and Taiwan were down 2-3 percent.

Monday’s sell off was also triggered by fears that a six-month freeze on major-shareholders activity was coming to an end releasing a possible 1.2 trillion dollars worth of shares on to the market.

Meanwhile, Brent crude prices hit new 11-year lows on oversupply concerns.

Investors were nervous after the central bank further weakened the yuan for the eighth consecutive day. Some other Asian currencies retreated in concert with the yuan.

However, those concerns about North Korea lifted certain defence companies such as BAE Systems, which was the best-performing FTSE 100 stock as it rose 1.7 percent.