Sunday, 10 January, 2016

Chinese Stock Market Tanks, Trading Halted

UK-CHINA-STOCKS:China stocks rise at market open after repo Most Asian stocks fall on North Korea nuke fears, China data
Dillon Hess | 11 January, 2016, 01:43

A woman reacts near a display board showing the plunge in the Shanghai Composite Index at a brokerage in Beijing, China, Thursday, Jan. 7, 2016.

Trading at the Chinese bourses was suspended at 9.42 a.m. today after the Hushen 300 dropped by over 5 per cent. Trading had to be halted for the day when the index witnessed a further 2 per cent dip in just two minutes after reopening at 9.57 a.m. Stocks also plunged Monday on signs of weakness in China's manufacturing sector, with the Shanghai Composite skidding nearly 7 percent.

(AP Photo/Mark Schiefelbein). Chinese investors monitor stock prices in a brokerage house in Beijing, Friday, Jan. 8, 2016.

The yuan's weakness, renewed Chinese stock market volatility and a slowing economy have put China's policymaking at the forefront of global market risks at the start of 2016, along with the pace of expected U.S. interest rate rises.

China has halted stock market trading for the second time this week after prices plunged again amid continued investor panic on its volatile markets.

Overnight, the United States markets plunged with oil prices sinking to their lowest level in 11 years on concerns over rising geopolitical tensions and a persistent glut in the energy market.

The Dow sank 392.41 points, or 2.3 percent, to 16,514.10.

The CSI300 index rose 1.75 percent to 3539.81, while the Shanghai Composite Index gained 2.3 percent to 3,362.29 points.

The drop was the biggest since August when the value was cut by five percent over a week - a move that sparked weeks of turmoil across global markets over worries Beijing was did not have a handle on its economic crisis.

But reports have said regulators will delay lifting the measure, which was also brought in during the summer.

After the two-hour morning trading session, the Shanghai index closed 2.39 percent higher at 3,199.56 points.

"They are changing the rules all the time now", Maarten-Jan Bakkum, a senior emerging-markets strategist at NN Investment Partners in The Hague with about $206 billion under management. On Thursday, the contract lost 70 cents to $33.27.

Hong Kong's Hang Seng shed 3.1 percent to 20,333.34 and Australia's S&P;/ASX 200 retreated 2.2 percent to 5,010.30. Mainland stocks are still expensive when compared to corporate profits, and while a sharp decline in equity prices would be painful, Beijing's efforts to prop up the market are only delaying the inevitable.

"This is insane. Chinese regulators set off on this path in July and they can not get out of it. They have ruined whatever hope investors still had in the market", said Alberto Forchielli, founder of Mandarin Capital Partners.

Investors are nervous after the Chinese central bank moved to weaken the the country's currency, the yuan, for the eighth day running, sparking fears of a currency war.

Analysts said Beijing's introduction of the circuit breaker mechanism had proved counter-productive as the suspension in trade unnerved investors who were anxious that they would not be able to sell shares they do not want.

The Shenzhen index advanced 1.98 percent, or 212.84 points, to close at 10,973.12 points.

Brent crude oil fell to $33.09 a barrel, its lowest since June 2004. Copper slid 0.8 cents to $2.088 a pound.

Homebuilder KB Home slumped after its fourth-quarter results fell short of Wall Street estimates.

CURRENCIES: The dollar slipped to 118.66 yen from 119.13 yen in the previous day's trading.

In currency markets, the euro fell to $1.0872 from $1.0917 on Thursday.