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Chinese regulator suspends circuit breakers
Chinese regulator suspends circuit breakers
Chinese regulator suspends circuit breakers. China suspended its recently implemented circuit-breaker system Thursday, hours after trading in Chinese stocks was halted minutes into the session because of a plunge in prices. The system also led to a trading halt on Monday amid selling, sparking a global sell-off in stocks. On Thursday, the circuit breaker kicked in after 29 minutes of trading, when the CSI300 plunged more than 7 percent. The China Securities Regulatory Commission has used the halts and other measures to control downward pressure amid volatility. However, some observers felt the system as designed could have increased investor jitters about the health of markets. The Dow Jones industrial average fell more than 300 points in opening trade Thursday but regained some of those losses after China’s announcement. Suspending circuit breakers would effectively cut off one regulatory tool China has used to limit how far stocks can fall. Cutting off the halting mechanism is meant to “keep the markets stable,” the Shanghai Stock Exchange said on its website. Under the system, if an index rose or fell 5 percent, trading was halted for 15 minutes. If it dropped by 7 percent, trading stopped for the rest of the day.
