Update | Black debut as China markets suspend business after 7 per cent fall triggers circuit breaker on first trading day of 2016
Expiry of ban on share sales by major shareholders this Friday spooks investors; regional markets down on poor China data
A newly launched circuit breaker cut short the year’s first trading day in the Shanghai and Shenzhen A-share markets on Monday, with analysts warning the new policy and expiry of a ban on selling shares by major stock owners of Chinese companies will usher in a volatile week.
Poor Chinese economic data dragged down Asian regional stock markets in what shaped up to be the worst first trading to start a year, with Hong Kong brokers labelling it a “black” debut which they believe could be an omen for a poor performance in equities in 2016.
Under the circuit breaker for Chinese markets launched on Monday, the trading of stocks, index futures and options will be suspended for 15 minutes when the CSI 300 Index, which tracks large-cap stocks in Shanghai and Shenzhen, falls or rises by 5 per cent, with trading halted for the rest of the session when the index moves by 7 per cent.
Trading on the Shanghai and Shenzhen stock markets were suspended for the rest of the day at 1:33 pm after the CSI 300 Index fell 7 per cent to close prematurely on Monday at 3,469.07.
The Shanghai Composite Index closed down 6.86 per cent at 3,296.26. Trading was suspended for 15 minutes at 1:12 pm after the index fell 5 per cent, triggering the first circuit breaker.
The Shenzhen Composite Index tumbled 8.19 per cent, or 189.01 points to close at 2,119.90, while the Nasdaq-style ChiNext dropped 8.21per cent, or 222.78 points to 2,491.27.
