China Stock Market Circuit Breaker Triggered After Selloff

Trading on China’s stock markets has been suspended after the market dramatically plunged and triggered a new system meant to limit volatility.
The blue-chip CSI 300 Index dropped 7% while the benchmark Shanghai Composite index fell 6.9%.

The technology-heavy Shenzhen Composite was the worst performer and fell by more than 8%.

Trading had been halted earlier in the day for 15 minutes after the stock market fell by 5%.

But shares continued to fall, leading regulators to end trading early.
Under China’s new circuit-breaker mechanism, moves of 7% from the previous session’s close trigger a trading suspension for the day.

The measures were introduced in early December after the stock market’s turbulent sell-off over the summer. They came into effect for the first time on Monday.

One factor behind the stock market falls was a manufacturing survey that pointed to more bad news for the Chinese economy.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza