China stock trading halted early after 7% plunge

[Lucky Luciano]

Source: MarketWatch (WSJ)


Home Markets Asia The Wall Street Journal
THE WALL STREET JOURNAL

By Shen Hong
Published: Jan 6, 2016

Newly installed ‘circuit breaker’ kicks in after 30 minutes

SHANGHAI — China’s stock market tumbled and scored its shortest trading day in its 25-year history on Thursday, as Beijing’s growing tolerance of a weaker currency intensified concerns about capital flight and the health of the world’s No. 2 economy.

The stock market stopped trading about 30 minutes after opening, as a newly-installed mechanism to limit volatility kicked in for the second time this week.


The benchmark Shanghai Composite Index SHCOMP, -7.32% ended the dramatically brief trading day down 7.2% at 3115.89.


The selloff was reminiscent of the similar but more drawn-out episode on Monday, the first day the so-called “circuit breaker” trading curb was in effect. The circuit breaker system is triggered by sharp moves in an index that tracks that largest 300 stocks listed in Shanghai and Shenzhen, the CSI 300. When the index moves 5%, trading is automatically halted for 15 minutes, while a 7% move stops trading for the remainder of the session.

Read more: http://www.marketwatch.com/story/china-stock-trading-halted-early-after-7-plunge-2016-01-06

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Ruh-roh

[Waiting for Someone]

1. That thing is going to basically collapse China.

It's going to trigger all the time. Everything in China is overinflated.

[JonLeibowitz]

3. The NYSE has circuit breakers too.

[Warpy]

10. Meanwhile, their biggest marketplace is dead. That means us and our economy

because the 0.1% are too stingy to pay the help properly, cutting off demand for goods and services.

China won't collapse. It will contract and its billionaires might be hundred millionaires, poor things, waiting for a few people in Congress to catch a fucking clue about wages.

[elmac]

2. Again??? after pumping billions in and keeping largest shareholders from selling

and who ever said this stock market thing is a rigged game. Al Capone.

and what will happen on what will be known as Black Thursday.

to be continued!

[elmac]

4. Thom Hartmans book The Crash of 2016

is coming true. That guy is a genius.

[Person 2713]

5. What were his details besides a crash in 16? Did it start with Asia? Never got around to reading

it but I know he wrote it a few years ago
Do I want to know how bad he predicts it will be?

[elmac]

12. Its basically the perfect storm of economic & market events world wide

could trigger a great depression. A broken system, low interest rates causing an explosion in corp debt, hoarding of cash overseas by some corps, income inequality, slowing consumer spending, student debt, no real banking reform, ect... It points out ways to fix it back then through regulation but me thinks its too late now.

Don't go by my poor description, get the book or ebook, its a good read.

[Feeling the Bern]

6. I predicted this two years ago when i lived in Shanghai.

No one that was Chinese believed me because (and I quote) "This is China. Those things only happen in other countries."

Apparently, economic laws apply there too and people are going to lose their shirts and take baths hard.

[davidpdx]

14. I know when I lived in Wuxi there was a lot of new construction and recently completed

constructed buildings that were empty. Honestly I think there will be a huge housing bubble in China in addition to what is going on now. Ordinary families in China can't afford the nice new houses that are being build because they don't make enough money.

If the worst case scenario comes true, I wonder how badly it will effect the US especially given the amount of our debt they hold.

[Javaman]

15. the funny thing about china's gdp...

part of it's based on construction of projects, not sale of finished houses or buildings like here.

as a result, china is dotted with dozens of ghost cities.

[Spitfire of ATJ]

7. They've been getting the government to artificially prop them up for a while now.

[GliderGuider]

8. Ruh roh!

[AnnieBW]

9. Thanks, North Korea!

I'm sure that the crash has a lot to do with their good friends, the North Koreans, claiming to blow up a nuke yesterday. So yeah, with friends like these, who needs enemies?

[flamingdem]

11. Futures on the Dow only down 177

not blood bath territory, yet.

[Art_from_Ark]

13. Japan's Nikkei index is about to lose 2% today.

https://www.google.co.jp/search?q=nikkei+index&ie=utf-8&oe=utf-8&gws_rd=cr&ei=9-GNVvnOJsPamAWymZToDg

[Odin2005]

16. China is fucked.

[The2ndWheel]

17. If it went up 7%, would they stop trading?

It's a good example of the increasingly abstract reality human beings live in. We want all upside, no downside. Yet we can't escape the downside, because physical reality still exists. Our imagination may be unlimited, but the planet isn't. We're not really good at accepting that. We think that if we think it, we can do it. Human beings can fly, but it's obviously not us actually flying. We're not physically adapted to flight, but the technology we've built that in theory decouples us from limitations does it for us.

Stock markets are probably the current pinnacle of that abstract world. Finance in general. If we can, I'm sure we'll find something even deeper in our minds at some point.

[Lucky Luciano]

18. Moot point - about 45 minutes ago they announced they are scrapping the circuit breakers altogether.

[OilemFirchen]

23. Yes.

The circuit breakers work identically - up or down.

A "circuit breaker" mechanism began test run on Jan 1st, 2016. If the CSI 300 Index rises or falls by 5% before 14:45 (15 minutes before normal closing), stock trading will halt for 15 minutes. If it happens after 14:45 or the Index change reaches further to 7% at any time, trading will close immediately for the day. "Full breaking" has been triggered on Jan 4th and 7th.On 7th china already stopped using the circuit breaker.

https://en.wikipedia.org/wiki/Trading_curb#China

[Sunlei]

19. what are the "largest 300 stocks" on the chinese wall street ?

[Lucky Luciano]

20. Here are the top weightings according to Bloomberg.

https://www.anony.ws/image/JR8L

[Sunlei]

21. Thanks, mostly banks/finance. I bet the chinese gov. will not bail their banks out.

also bet whoever 'propped up' Chinas banks already ran off with their profits.

Wonder if Chinas 'little people' have any kind of bank account protections.

[Lucky Luciano]

22. China has been vigorously defending their markets through intervention. nt

Last edited Thu Jan 7, 2016, 02:49 PM - Edit history (2)