Chinese stocks dive seven percent, trading halted

Beijing, Jan 7 (IANS) Trading on the Shanghai and Shenzhen bourses was halted on Thursday after shares tumbled 7 percent within the first 30 minutes of trading, triggering the circuit breaker mechanism.

It was the shortest trading time in China’s capital market history, Xinhua news agency reported.

This is the second time the circuit breaker has halted trading this week, after a similar plunge on Monday triggered the circuit breaker, the first day the mechanism took into effect.

The mechanism follows the Hushen 300 Index, which reflects the performance of bluechips listed in Shanghai and Shenzhen. When the index rises or falls by 5 percent, the circuit breaker imposes a 15-minute suspension in trading.

If the Hushen 300 declines by over 7 percent, trading is halted for the day.

At 9.42 a.m., trading was suspended for 15 minutes after the Hushen 300 dropped by over 5 percent. The index dived a further 2 percent in just two minutes after reopening at 9.57 a.m., and trading was ceased.

In the end, the Hushen 300 Index plunged 7.21 percent to close at 3,284.74 points.

The benchmark Shanghai Composite Index was down 7.32 percent to close at 3,115.89 points.

The smaller Shenzhen index lost 8.35 percent to close at 10745.47 points. The ChiNext Index, China’s NASDAQ-style board of growth enterprises, dropped 8.66 percent to close at 2,254.52 points.

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