People walk along a pedestrian bridge with a screen showing Chinese stock prices crashing, Shanghai, January 7, 2016.
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“Trading halts can actually exacerbate downside moves as would-be buyers are unable to come in and buy beaten-up stock”.
The Chinese stock markets closed for the day, just half an hour after the opening bell and set a record for the shortest trading session in China’s capital market history.
Trading in Chinese stocks was suspended Thursday after a key index plunged 7 percent, setting off falls in oil prices and world share markets.
The selling spread across continents, sending indexes sharply lower in the US and Europe. The price of US crude oil plunged to its lowest level since 2004 as traders anxious that weakness in China would translate into lower global demand for energy. Technology stocks were among the hardest hit.
The S&P/TSX composite index ended the day off roughly 20 per cent from its all-time high in September 2014 – a loss considered by many as a bear market. It had been the eight straight day of lower guidance and the biggest drop since August.
A slowdown in China is seen as a threat by many investors because the country has been the main engine of global economic growth for years, particularly during the depths of the Great Recession. The halts, which went into effect at the beginning of the year, were triggered twice this week. “The reality is the economy is fundamentally strong”.
The Dow Jones industrial average lost 39 points, or 0.2 percent, to 16,475 as of 11:30 a.m. Eastern time.
In New York, the Dow and the S&P 500 fell 2.3 percent or more, while the NASDAQ dropped around three percent by the close of trading.
The PBOC set the daily fixing for the yuan at 6.5636 per U.S. dollar, 0.02 percent up from yesterday, having slashed the reference rate by 1.4 percent over the past eight days.
89 points. The smaller Shenzhen index lost 8.35 per cent to close at 10745.47 points.
European markets also fell. Apple, the world’s largest publicly traded company, dipped 1 percent and touched its lowest price since October 2014.
Financial stocks slumped. Citigroup gave up $2.09, or 4.2 percent, to $48.03.
During the first week of 2016, China stocks lost roughly 10 percent, their worst weekly performance since the market crashed in the summer. Those fears have drowned out signs that the United States and Europe are doing fairly well.
Worries about China were fuelled by weaker-than-expected December manufacturing activity.
China’s disarray has caused chaos in global markets.
The dismal start to the new year comes as investors worry that China’s huge economy is slowing down. Silver rose 36.8 cents, or 2.6 percent, to $14.344 an ounce.
The FTSE 100 index spiked higher following a surge in U.S. job growth and sharp revisions higher to employment in the previous two months.
On Friday, the Shanghai Composite was up 2.2% to 3,194.08 as investor confidence grew on the new measures introduced by authorities to support the stock market. That helped send copper producer Freeport-McMoRan down 56 cents, or 9.1 percent, to $5.61.
Woodside lifted $1.25 to $28.19, Oil Search gained 22 cents to $6.55 and Santos was up 13 cents to $3.38. The euro was little changed at $1.0917. The dollar rose to 118.41 yen from 117.74 yen.
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Bond prices fell. The yield on the 10-year Treasury note rose to 2.17 percent.
