China’s Monday morning shocking halt to trading sent shock waves through America’s financial sector, as Wall Street’s Dow tumbled 300 points – and that was before markets officially opened for business.
Shortly after opening, the Dow fell 383 points.
The first trading day of 2016 began halfway across the world with a volatile start to China’s markets, prompting a global sell-off, USA Today reported.
Following the initial halt in CSI-300 Futures at the 5 percent limit down level, the afternoon session opened to more carnage and amid the worst ‘first day of the year’ in at least 15 years, Chinese stocks collapsed further to a 7 percent crash. At 1334 local time, stock trading was halted for the rest of the day across all exchanges (at least two hours early). (HT Jewish News Update)
Bloomberg called it the “worst start to the year for China stocks ever,” and blamed the weaker-than-expected manufacturing sector. The poor showing prompted a “massive stock market sell-off in mainland China, where shares tumbled more than 7 percent, forcing authorities to halt trading for the day before the normal closing time,” USA Today said.
As Bloomberg reports:
Trading was halted at about 1:34 p.m. local time on Monday after the CSI 300 Index dropped 7 percent, according to data compiled by Bloomberg. An earlier 15-minute halt at the 5 percent level failed to stop the retreat, with shares extending losses as soon as the market re-opened. The selloff, the worst-ever start to a year for Chinese shares, came on the first day the circuit breakers took effect.
The ripple effect of the world’s second largest economy was felt in America, where the Dow Jones industrial average spiraled 300 points in pre-market trading. Before Wall Street opened, the Standard & Poor’s index was 2 percent lower and the Nasdaq, down 2.2 percent. (HT WND)