FTSE 100 moves higher after rollercoaster on Chinese markets

The move unnerved investors across the region, sending other Asian markets lower and weakening the value of the Chinese yuan currency by 0.51 percent against the dollar – its lowest level since August.

He said the mechanism “is not the major reason for the market plunge, but it failed to achieve the anticipated effects”, adding that the mechanism in effect accelerated the plunge as some investors chose to sell when the index’s drop neared five percent or seven percent.

However, after the abrupt halt of trading on Thursday, China’s securities regulator suspended the circuit breaker signaling to Beijing that it should find new measures to tame the markets.

A woman reacts near a display board showing the plunge in the Shanghai Composite Index at a brokerage in Beijing, China, Thursday, Jan. 7, 2016. Macy’s shares, which have been in declined since November, rose $1.37, or 3.8 percent, to $37.50 after the company said it will close 40 stores and eliminate more jobs. Still, the S&P 500 was down nearly 4% so far this week.

After an initial steep fall of almost 300 points, the Dow Jones Industrial Average benchmark is now at 16,702 – a drop of 203 points, or about 1.2 percent.

The continued fall in reserves suggest the central bank is burning its currency hoard massively to stabilize the yuan as capital outflows continue amid the economic slowdown and the prospect of further interest rate hikes in the U.S.

“After the plunges in the previous days, market sentiment has changed”, Haitong Securities analyst Zhang Qi told AFP. By 10:30 a.m., both the Shanghai and Shenzhen stock exchanges had hit the circuit breakers for the day, marking the shortest trading session in history. The trigger of investor worries appeared to come from an accelerated decline this year in the Chinese yuan, which fell to its lowest level since 2011 against the US dollar on Thursday. To make matters worse, he said, the markets don’t have many facts to go on. West Texas Intermediate, the North American benchmark oil price, slumped 70 cents to US$33.27 a barrel.

Major worldwide news has been testing the markets this week, from the Saudi Arabia-Iran diplomatic conflict to North Korea’s testing of an apparent nuclear device to slumping energy prices.

CNNMoney’s Fear & Greed Index, which is calculated based on several market indicators, is also flashing “fear”.

Shares of Samsung Electronics were up 0.7% despite the tech giant’s profit guidance for the fourth quarter missing market expectations.