But markets had stabilized in the closing months of 2015.
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The People’s Bank of China (PBOC) set the yuan midpoint rate at 6.5646 per dollar, 0.5% weaker than the previous day’s fix.
Chinese markets were suspended Thursday for the second day this week after they fell more than seven percent, leading an Asia-wide sell-off as Beijing weakened the value of the yuan currency by the most since August.
Most Asian stock markets declined Wednesday after a North Korean nuclear test unnerved investors and a poor Chinese economic report dampened sentiment.
Analysts said the first suspension is triggered too quickly, and China’s army of small investors use the cooling off period to line up additional sell orders.
The “circuit breaker” requires a 15-minute pause in trading if the CSI 300 falls 5 percent within 30 minutes. 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.
Nicholson said, “It’s hard to see the circuit-breakers surviving long in their current form, given they only seem to be further contributing to the volatility in the Chinese market”. Investors are also concerned that the government is letting the yuan get weaker because that may be a bad sign for the health of China’s economy, the second-largest in the world.
Leading eurozone markets Frankfurt and Paris were down by more than three percent, with Madrid and Milan faring only slightly better.
In commodities, Brent crude fell to an 11-year low of $33.41 a barrel after data showed a surprisingly big build-up of US gasoline stocks, adding to fears of a growing global glut.
Regulators tried to head off such concern by announcing earlier in the week major shareholders could sell only in private transactions to avoid flooding the market.
The main indexes of the Hong Kong stock exchange were down over 2.5 per cent.
Those plans went wrong when markets soared faster than Beijing wanted. The central bank cut interest rates, while regulators suspended new share listings and threatened to jail short sellers.
The government has yet to say what its intervention cost, but Goldman Sachs has estimated state entities spent 860 billion-900 billion yuan ($135 billion-$140 billion) to buy shares in June and July.
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“The scrapping of the circuit breaker has given a little bump to risk appetite”, said Owen Callan, senior analyst at Cantor Fitzgerald.
