Driving the TSX lower were consumer discretionary stocks, which fell 1.2 per cent overall, and the materials sector which dropped 0.7 per cent.
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USA stocks closed mixed after wavering between small gains and losses Tuesday, as Wall Street attempted to recover from Monday’s plunge amid falling oil prices.
When Chinese markets were halted Monday, the move triggered a global selloff, including losses of roughly 2% in the U.S.
Japan’s Nikkei 225 index was down 1.2% to 17,972.61, while Australia’s S&P/ASX 200 index lost 1.5% to 5,047.80 as energy shares weighed on the market.
The ban was set to expire at the beginning of next week, but after markets crashed 7 percent on Monday, the China Securities Regulatory Commission (CSRC) said it would implement a new policy to manage the pace of stakeholder sales, without specifying when the new policy would be ready.
Trading on Chinese stock markets has been halted for the day Thursday. Investors rushed to sell after the suspension ended, with turnover peaking in the final minute before a 7 percent slump froze trading in shares, futures and options for the rest of the day.
Big institutional investors were also unhappy with the new state interventions – including the ban on the sale of shares – in the Chinese markets, Bloomberg reported, citing analysts from UBS Wealth Management, Henderson Global Investors and Wells Fargo Funds Management.
At 9:36 a.m. ET (1436 GMT) the Dow Jones industrial average was down 241.88 points, or 1.41 percent, at 16,916.78, the S&P 500 was down 27.41 points, or 1.36 percent, at 1,989.3 and the Nasdaq Composite was down 65.35 points, or 1.34 percent, at 4,826.08.
The People’s Bank of China, the central bank, also pumped 130 billion yuan ($20 billion) into the money market, according to a statement.
Traders said the halts took effect as anticipated without any major technical problems.
Adding to the picture, oil prices dipped Tuesday as the crude supply glut overshadowed a diplomatic row between key producers Saudi Arabia and Iran. The currency rallied from early declines in offshore trading, strengthening 0.4 percent in Hong Kong.
This means that markets continue the trend of volatility seen in the second half of 2015, much of which was caused by unpredictable and turbulent data from China.
Market reforms put on hold by the crash could be delayed further if the circuit breaker fails to calm markets – which had rebounded over 25 percent from August lows prior to Monday.
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“There’s uncertainty globally over whether Chinese authorities have the firepower, or perhaps more worryingly, have the will to use it, to shore up the stock market and the wider economy”, said Jasper Lawler, a markets analyst with CMC Markets in London.
