China Stops Trading After Stocks Nosedive
Experts say the 'Great Fall of China' has recommenced
By Newser Editors and Wire Services
Posted Jan 7, 2016 5:04 AM CST
Updated Jan 7, 2016 5:54 AM CST
A woman reacts near a display board showing the plunge in the Shanghai Composite Index at a brokerage in Beijing on Thursday.   (Ng Han Guan)
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(Newser) – Chinese stocks nosedived Thursday, triggering their second daylong trading halt this week and sending share markets, Asian currencies, and oil prices lower as investor jitters rippled across the globe. The benchmark Shanghai Composite Index tumbled 7.3% before "circuit breakers" suspended trading for the day. The Shenzhen Composite Index for China's second, smaller stock exchange slumped 8.3%. Chinese government measures introduced last year to prop up share prices after a meltdown in June are being gradually withdrawn, leading to volatile trading. Investors are also unnerved that Beijing has allowed the yuan to weaken, a possible sign the world's No. 2 economy is in worse shape than previously thought.

"The sell-off in Chinese equities we have seen this week only emphasizes the point that the stock market intervention may have only delayed the sell-off," says a market analyst at IG in Melbourne, Australia. Chinese stock trading was also suspended on Monday after the market plunged. The Shanghai benchmark has dropped 12% so far this year, which is barely a week old. The tempest in China's markets has been felt around the world. Foreign investors have little direct involvement in Chinese financial markets, but the size of China's economy means the wild gyrations are a source of concern internationally. (The market plunged around 9% on "Black Monday" last summer.)
 

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