The All Ordinaries index continued a New Year four-day horror run, falling around 2.1 per cent to rest at 5,068.8 points on Thursday.
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The China Securities Regulatory Commission said it was planning new rules to further restrict share sales by major stakeholders in listed companies, and said it would further tweak the circuit breaker mechanism amid criticism that it had fueled Monday’s sell-off.
Abu Dhabi lost 1.3 percent, Kuwait dropped 0.83 percent while Bahrain was down just 0.23 percent.
This occurred after the People’s Bank of China unexpectedly fixed the midpoint rate at 6.5314 per dollar prior to the market open, even weaker than the previous day’s closing quote 6.5157.
“The yuan’s depreciation has exceeded investors’ expectations”, said Wang Zheng, Shanghai-based chief investment officer at Jingxi Investment Management Co.
The price of crude closed below $34 a barrel Wednesday after more signs emerged that China’s huge economy was slowing down.
Analysts say that investors’ jitters were further fanned by North Korea’s hydrogen bomb test announcement and China’s economic slowdown. The United States and weapons experts voiced doubt the device was as advanced as claimed.
The Dow Jones Industrial Average slid 1.6%, or 276 points, in its worst start to the year since 2008, around the time of the Great Recession.
The market sentiment was somewhat boosted by a slight rise in China’s service sector activity, as the Caixin China General Services PMI (Purchasing Managers’ Index) came in at 50.2 in December, above the 50-point level, which demarcates contraction and expansion. The Shanghai composite index ended with a 0.3% loss Tuesday after a slightly volatile session. Both October and November showed strong hiring by employers. But U.S. investors seem to be reluctant to jump back into the market ahead of the big monthly U.S.jobs report that’s due on Friday. The British stock market fell by more than 2 percent.
Chipotle (CMG.N) fell 5.0% after the company was served with a grand jury subpoena in relation to a criminal investigation into a norovirus contamination at one of its restaurants.
But the selling intensified after trading on the Shanghai and Shenzhen stock exchanges in China was frozen for the day after shares tumbled more than seven per cent. The euro fell to $1.0751 from $1.0827. the yield on the 10-year Treasury note was unchanged at 2.25 percent.
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The S&P 500 posted two new 52-week highs and 46 lows; the Nasdaq recorded 29 new highs and 132 lows.
