China suspends breaker after markets plunge
Thur: China said it will be suspending the stock market circuit breaker rule, much to the relief of traders who hope it may bring some calm after a week of volatility.
The breaker is triggered when shares fall below a certain level. However, traders in London said the underlying issues in China will remain a cause for concern.
London shares plunged again today. At the opening the FTSE 100 fell by more than 180 points or 3%, wiping billions off the value of top companies. By mid-day it was standing at 5,912, down 160pts or 2.6%. At the close it was down 119.3 points down at 5,954.08.
It follows the worst start for Chinese markets in two decades which showed no signs of letting up after the central bank cut its yuan reference rate by the most since August, sparking a selloff in stocks that forced the $6.6 trillion market to shut early.
The country’s governors are said to be admitting that the economy is weaker than previously thought. There are moves to switch the emphasis from manufacturing to services.
China’s CSI 300 Index plunged 7%, triggering a full-day trading halt less than 30 minutes into the session and prompting an unscheduled meeting at the securities regulator to assess the turmoil.
The onshore yuan weakened to a five-year low as the People’s Bank of China cut its reference rate for an eighth straight day and said foreign-exchange reserves shrank by a record $108 billion in December.
Poundland was down 11% or 22p at 170p after saying Christmas trading was quieter. M&S initially rose 1.5% after chief executive Marc Bolland announced he was retiring but then fell back 1.3% to 433p.