Trading halted in China once again; Asian markets tumble

The Chinese stocks reacted negatively after the People's Bank of China (PBOC) set the yuan’s reference rate at 6.5646, the lowest levels since April 2011.

This perhaps is the worst start of the year for Chinese stock markets in last two decades with the authorities had to halt the trading twice in a week - after two major falls of over 7%. The Chinese stocks reacted negatively after the People's Bank of China (PBOC) set the yuan’s reference rate at 6.5646, the lowest levels since April 2011.

The Shanghai Composite Index(CSI 300) was last quoted at 3,115.89 points, down by 7.89% after the trades were suspended. The index opened lower at 3,309.66 points as against its previous close of 3,361.84 points.

Analysts are of the view that mounting concerns over tepid economic growth is prompting the Chinese authorities to lower yuan. In early trades, yuan was quoted 0.6% lower at 6.592 against the US dollar.

The bearish trend in Chinese stock markets proved contagious which affected other leading Asian stock indices, which fell between 1-2.5%. The weak sentiment in Chinese stock markets triggered heavy sell-off at other Asian stocks markets. Japan’s Nikkei 225 index is currently trading 1.53% down at 17,917.71 points, Singapore’s Straits Times at 2,748.48 points (-2.03%), Hong Kong’s Heng Seng at 20,479.39 points (-2.45%), Taiwan’s Taiex at 7,815.40 points (-2.24%), South Korea’s Kospi index at 1,905.51 points (-1.05%), Singapore Nifty (SGX Nifty) at 7,653 (-1.06%).

Meanwhile, India’s S&P BSE Sensex and Nifty 50 are currently trading 0.71% and 0.76% lower at 2,5224.70 points and 7,682.25 points respectively.

European markets closed lower yesterday. UK’s FTSE 100 closed 1.05% lower at 6,073.38 points, France’s CAC 40 index at 4,480.47 (-1.28%) and Germany’s DAX at 10,214.02 points (-0.94%).

Dow Jones Futures and S&P 500 Futures closed 1.34% and 1.10% at 16,750 points and 1,972.50 points respectively.