Chinese stock markets suspended for day after shares fall 7%

January 07, 2016 08:20

China stock markets closed for the day less than half an hour after opening today when shares fell more than seven per cent, triggering an automatic "circuit breaker".

By 9:58 am, when the market halted trading, figures showed the benchmark Shanghai Composite Index had slumped 7.32 per cent, or 245.95 points, to 3,115.89.

The Shenzhen Composite Index, which tracks stocks on China's second exchange, had tumbled 8.35 per cent, or 178.08 points, to 1,955.88.

The "circuit breaker" went into force at the beginning of the year as part of efforts to reduce volatility on China's wild bourses, which plummeted in mid-2015, sending jitters through world markets.

It was triggered for the first time on Monday. The system is based on the CSI 300 index, which tracks the largest 300 stocks on the two exchanges. If it falls by five per cent, trading is initially suspended for 15 minutes.

"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.

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