China’s stocks were suspended from all trade on Thursday after the CSI300 tumbled more than 7 percent in early trade, triggering the market’s circuit breaker for a second time this week.
That drop-kicked stock markets across Asia, which were already wallowing after a weaker open amid concerns over China’s swooning currency and economic slowdown as well as falling oil prices.
On the mainland, the Shanghai Composite had tumbled 7.32 percent by at the time of the halt, while the Shenzhen Composite plummeted 8.34 percent. The CSI300, the benchmark index against which China’s new circuit breakers are set, plunged 7.21 percent. If that index rises or falls 5 percent, the market halts all trade for 15 minutes. If it subsequently falls by 7 percent, trading is suspended for the rest of the day.
In total Thursday, China shares only traded around 15 minutes.
Jackson Wong, associate director at Huarong International Securities said he was not surprised by how quickly the first trade halt came. He attributed it to the mentality of Chinese investors. If the index is down “close to 4 percent, the selling price will be heavier,” he told CNBC’s “Asia Squawk Box”. “It hit 5 percent in no time.”
Wong added that officials in China do not appear to have a good grasp of the market, even with the introduction of the circuit breakers, which is waning investor confidence.
“They are not very good at this,” he said, “the 5 and 7 percent