Asian shares open calmer after China circuit breaker axed
Jan 12, 2016 Asia’s major stock indexes recently opened higher after China ditched a circuit breaker mechanism that halted trading twice in one week following tumbling share prices. The circuit breaker mechanism had been blamed for exacerbating the market sell-offs.
The People’s Bank of China also raised its guidance rate for the Yuan for the first time in nine trading days, having allowed the currency’s biggest fall in five months.
After suffering a turbulent start to 2016, Chinese markets saw some improvement. In Hong Kong, Hang Send Index opened up 0.8 percent at 20,491.88 points in the morning session.
Managing Director at Parry International Trading Limited, Gavin Parry, welcomed the news of the deactivation of circuit breaker said:
“The fact that they’ve removed these circuit breakers is going to, again, obviously free up the aspect of people to manage their risk profile, and hopefully effectively flush things out of the system. Again, for other markets in the region it’s not a new thing, but these markets are a lot more institutionally inclined, they’re a lot more established, and there’s a lot more education in the markets as well, we’re talking in relation to how they work, and a lot more tools for them to manage risks,”