The reports were the latest damage-control measures announced after China’s major benchmark indexes plunged 7 percent on Monday, forcing the first-ever nationwide trading halt and roiling global markets.
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(AP Photo/Eugene Hoshiko). A woman is reflected on an electronic stock board of a securities firm in Tokyo, Thursday, Jan. 7, 2016.
The renewed panic in Asia took the CSI 300’s losses to 12% so far this year and triggered recently installed market circuit breaker systems for the second time since their launch on Monday.
China’s market regulators said Thursday they will suspend a mechanism that automatically halts trading when stocks fall sharply.
China’s stock market sank about 7 percent Thursday after the yuan fell to its lowest level against the dollar since March 2011.
Aerospace company Boeing fell $5.82, or 4.2 percent, to $133.01 and railroad operator Union Pacific felt $1.75, or 2.3 percent, to $73.08.
The circuit breaker, which only came into effect on January 4, came under fire for kicking in too soon with its initial pause in trading and then encouraging a rush to sell before a second trigger halted the day’s trade permanently. The China Securities Regulatory Commission said after Thursday’s shutdown that the circuit breaker rule had been suspended.
The S&P 500 itself fell 1.5 per cent at closing on Wednesday, marking one of the poorest levels of performance at the beginning of a calendar year in a decade. USA crude dipped 6 cents to $33.91 a barrel in NY. Thursday’s market plunge may have been exacerbated by investors rushing to sell before they were locked out, some analysts said.
This is already the second time that trading has been suspended this year.
The rout in Chinese markets, which follws weak manufacturing data, could have an adverse impact on other emerging markets as well.
A sustained depreciation in the yuan puts pressure on other Asian countries to devalue their currencies to stay competitive with China’s massive export machine.
Thursday’s selling was linked to weakness in the yuan, as the government’s decision to let the currency get weaker may be a sign of weakness in China’s economy. The dollar gained 0.1 percent against the South Korean won and rose 0.3 percent against India’s rupee.
Hong Kong’s Hang Seng shed 3.1 percent to 20,333.34 and Australia’s S&P/ASX 200 retreated 2.2 percent to 5,010.30.
There was also a sense of relief in commodities markets as oil prices pulled out of their tailspin, although few experts were willing to declare an end to the slump.
The People’s Bank of China has allowed the yuan to decline by about 6 percent against the dollar since August after loosening its tie to the US currency.
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In currency markets, the euro fell to $1.0872 from $1.0917 on Thursday.
