Chinese stock trading suspended again after 7.3-percent slide

China halted stock trading Thursday, its second daylong trading suspension this week, after prices plunged in the latest spasm of investor panic on its volatile markets.

In mid-afternoon trading, the S&P/TSX composite index was down for a seventh consecutive day, off 258.65 points – or more than two per cent – at 12,468.15 as commodity prices, including oil, continued to fall amid perceived weakness in the Chinese economy.

The Standard & Poor’s 500 index lost 24 points, or 1.2 percent, to 1,966.

“The market still is trying to find a bottom, and that takes time”, said Chen Yong, a strategist at Lianxun Securities.

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

Investors were nervous after the central bank further weakened the yuan for the eighth consecutive day.

“A bit of a return to commonsense in China”, Mr Lucas said. “It’s not just the depreciation, but also the lower midpoints thus far this week”.

For sure, persistent signs that China – the world’s second largest economy – is slowing have spooked investors around the globe.

File picture of the Chinese yuan.

On Wednesday, North Korea said it successfully staged its first test of a more powerful form of nuclear weapon.

“It really is due to a combination of factors”.

The circuit breaker halts exchanges for 15 minutes after a 5% drop in the CSI 300 index (a benchmark of the largest 300 stocks listed in Shanghai and Shenzhen) and then halts them for the rest of the day after a 7% retreat. The circuit breaker, which came into effect this year, aims at reducing volatility in the Chinese markets.

“There was uncertainty in the markets”. Although maintaining the ban was meant to lift China stocks, it had no apparent effect on market performance.

The tempest in China’s markets has been felt around the world.

“People think this is a manipulated, distorted market”, said Peter Lewis, the director of Peter Lewis Consulting. “It’s a tug of war now between market forces and the government”. Rather, the halts add to panic as investors line up to sell to avoid being repeatedly locked out of the market.

U.S. Treasuries gained from the move as money shifted out of emerging markets to risk-off havens, with yield dropping 9 basis points.

Dow futures briefly traded more than 400 points lower before holding about 350 points lower ahead of the open.

In contrast, prices of state bonds issued by major countries posted a gain, while the price of gold, which is considered a safe haven asset, rose one-point-three percent to reach the highest point in two months.