China Stock Markets Shut Down For The Day On 7% Decline

Lifted in toto from the Wall Street Journal:

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 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.

Pessimism spread fast in the stock market after China’s central bank earlier set the daily yuan reference exchange rate against the U.S. dollar 0.5% weaker from Wednesday’s level, marking the largest adjustment toward yuan weakness since Aug. 13.