China stocks slump 7 percent on opening day of 2016

Jan 06, 2016 The Chinese stock markets recently tumbled by seven percent in the opening session of 2016, forcing exchanges to suspend trade for the first time.

The Shanghai Composite Index fell 6.9%, its biggest decline on record for the first trading day of the year, before trading was halted.

On its launch day, a new circuit-breaker system for Chinese stocks kicked in after steep declines on a benchmark of blue-chip shares.

Commenting on the slump, Mr. Ou, a stock market trader said:

“I’m in favour of ‘circuit breaker’ mechanism. But the government implemented it on the first day (of the mechanism is supposed to be in effect), which is a pilot experiment. Pilot experiment is fine, but (the government) can do mock trading, it’s not necessary to operate in the real (stock) markets, right? (The government) can operate in the real markets when foreign capital does short China’s stock markets, right? I think it’s inappropriate to do real trading when no short selling by foreign capital,”