China halts trading after 7% shares plunge, triggering ‘circuit breaker’

An investor observes stock market at a stock exchange hall on January 4, 2016 in Fuyang, Anhui Province of China. Chinese shares slumped to a halt on the first trading day of 2016. The Shanghai Composite Index down 242.52 points, or 6.85 percent, to halt

Chinese stock markets dropped 7% in the first opening session of 2016 triggering the ‘circuit breaker’, a new system which halts trading and is intended to curb volatility. Under China's new mechanism, moves of 7% from the previous session's close trigger a trading suspension for the day. In Monday’s trading session, investors dumped stocks ahead of the imminent expiration of a Chinese share sales ban on listed companies' major shareholders, which had been imposed during the market crash last summer. The ‘circuit breaker’ measure was introduced in early December as a result of the market turbulence.

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