Yuan slump: Trading on mainland Chinese markets was halted today after shares fell more than 7% for the second time this week. The “circuit-breaker” rule, introduced to stem volatility, was triggered in the first 30 minutes of trading, making it the shortest ever trading day in the 25-year history of China’s stock market. The CSI 300 index, which triggers the trading halt, fell 7.2% to 3,284.74. The index is a collection of blue-chip stocks from Shanghai and Shenzhen, and first sparked a 15-minute trading halt after it fell 5%.
The mainland benchmark Shanghai Composite index also fell 7.3% to 3,115.89, while the tech-heavy Shenzhen Composite lost 8.3% before trading was stopped entirely for the day. After the trading halt, the China Securities Regulatory Commission announced that major shareholders could not sell more than 1% of a company’s shares within three months as of 9 January. It comes as a previous six-month ban of stock sales by major shareholders is set to expire on Friday.Recent moves by Beijing to depreciate the yuan have ignited fears that the world’s second-largest economy is slowing more than expected and could trigger another wave of competitive currency devaluation in the region.
Bernard Aw, market strategist at trading firm IG, said the negative sentiment was because of the perception that China may further weaken the yuan, igniting concerns over what that might mean for other economies.
Yuan slump halts trading as ‘circuit breakers’ kick in
Source: bbc