China Securities Regulatory Commission scraps stock circuit breaker rule as FTSE 100 and global markets tumble
We learned yesterday morning that Chinese market circuit-breakers are like buses: you wait ages for one and then two come along at once.
But clearly two of the country's largest stock exchanges have had enough: China Securities Regulatory Commission stock exchanges issued a statement saying it is scrapping the circuit-breaker, which has halted trading on the country's stock markets twice this week. In other words, it's suspending its suspensions.
The rule, introduced in response to volatile trading over the summer, kicks in when the stock market loses more than five per cent. However, a number of critics argued it was increasing market panic.
Read more: Is China the greatest risk to the world economy in 2016?
Yesterday, it was triggered after just 870 seconds (that's just under 15 minutes) of trading, following the People's Bank of China's shock decision to set the official midpoint rate of the renminbi at 6.5646 per dollar, its lowest level since March 2011.
China's blue-chip CSI 300 index had fallen 7.21 per cent at 3,284.74 points. Meanwhile, the Shanghai Composite Index shed 7.32 per cent at 3,115.89 points, while the Shenzhen Composite Index was 8.24 per cent lower at 1,958.09 points.