Trading on China’s stock markets were suspended for the rest of the day, for the second time this week.
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The official Xinhua news agency said trading on the Shanghai and Shenzhen stock exchanges was frozen for the day after shares tumbled more than 7 percent.
Beijing has been trying to restore investor confidence after markets plunged in June following huge gains in the preceding year.
The Shanghai Composite fell 7.32 percent, while the Shenzhen Composite was down 8.34 percent.
“The use of the circuit breaker is the main reason for the falls as investors panicked after seeing it being triggered on Monday”, Phillip Securities’ analyst Chen Xingyu told AFP. After the stocks declined in early trade, a trading halt of 15 minutes was announced.
Once trading resumed, the slide continued and within just a few seconds the index was down 7 percent, meaning trading was called off for the day.
“The circuit breaker has cut off the market liquidity and investors are afraid they won’t be able to sell”.
Regulators said this week that such sales will be limited to private transactions to avoid fuelling further volatility.
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Concerns about China have also helped ravage oil prices – a trend that in turn hurts global economies and further unsettles stocks. Benchmark U.S. crude futures fell 85 cents, or 2.5 percent, to $33.10, the lowest price since January 2004, in electronic trading on the New York Mercantile Exchange. South Korea’s KOSPI lost 20.25 points or 1.05 percent to trade at 1,905.18. “Still, it stayed in line with the PBOC’s tone of late to lead the yuan to edge down”, said a dealer at an Asian bank in Shanghai. The Australian dollar fell 0.6 percent.
