SHANGHAI, China — Trading on the Shanghai and Shenzhen stock markets was halted for the day on Monday after shares fell seven percent.
The drop in the CSI300 index, which covers both bourses, triggered an automatic early closure for the first time under a new system to curb volatility, after an earlier 15-minute trading halt failed to stem the declines.
Trading was initially suspended after shares fell more than five percent under the new system.
BACKSTORY: Chinese stocks fall for 4th day, dropping 7.6 percent
The falls followed poor data from official and private surveys of manufacturing in the world’s second-largest economy, and with the expiry looming of measures brought in to curb China’s mid-2015 share slump.
“The market is worried about the upcoming lifting of the rule that bans shareholders from selling,” Central China Securities analyst Zhang Gang, told AFP.
“The pressure will continue to weigh on the market in the following days.”
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As trading was suspended the benchmark Shanghai Composite Index had tumbled 4.96 percent, or 175.66 points, to 3,363.52.
The Shenzhen Composite Index, which tracks stocks on China’s second exchange, slumped 6.66 percent, or 153.76 points, to 2,155.15.