China stocks plunge, trigging another market halt

The Japanese yen, considered a safe-haven currency, traded slightly lower against the dollar from the previous session, with the dollar-yen pair at 118.57. Stocks plunged further after trading resumed 15 minutes later, triggering the daylong trading freeze.

Chinese investors look at a screen showing stock movements at a stock brokerage house in Beijing, China, January 5, 2016.

Trading on Chinese stock markets was halted for the day on Thursday just 30 minutes after the start of trading.

Chinese stock trading was also suspended on Monday after a plunge that roiled Wall Street and other global markets.

The circuit breaker has cut off the market liquidity and investors are afraid they won’t be able to sell.

The circuit breakers trip when there are big swings in the CSI 300 index.

The index is a collection of blue chips stocks from Shanghai and Shenzhen, and first sparked a 15-minute trading halt after it fell 5%.

“The market-selling pressure was originally not this heavy”.

While it’s not always easy to pinpoint the motives of the Chinese authorities, most market watchers believe the move to further devalue the yuan is a bid to give China’s exports a boost. At the time, Beijing said it was hoping to allow market forces more control over the yuan – but the central bank has spent billions in recent months to prop up the currency.

China used a new circuit breaker for its volatile stock markets for a second time in one week today (Jan. 7).

The Shanghai Composite fell 7.32 percent, while the Shenzhen Composite was down 8.34 percent.

Hong Kong’s Hang Seng index also lost 2.4% to 20,470.45 in early trade. The figures fed worries about a global supply glut and weak demand that has sent prices slumping more than 60 percent since mid-2014.

On Thursday in Asia both contracts fell another 1.6% each. The dollar gained 0.1 percent against the South Korean won and rose 0.3 percent against India’s rupee.