Stock Markets Suspended as Shares Tumble 7 Percent
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An investor reads stock information at a brokerage house in Qingdao, east China’s Shandong province, on January 4, 2016. [Photo: Asianewsphoto]

The first trading day of the New Year on the Chinese mainland stock market closed earlier than expected, after a 7 percent slump triggered the new circuit breaker mechanism bringing dealing to a halt.

At 1:13 in the afternoon, trading was suspended for 15 minutes after the CSI 300 Index, which reflects the performance of the Shanghai and Shenzhen markets, slumped 5 percent.

It was triggered again later, leading to the early suspension of the market.

At the close of trading, the benchmark Shanghai Composite Index had tumbled 6.9 percent.

The smaller Shenzhen index and the ChiNext Index of growth enterprises each plummeted around 8.2 percent.

The circuit-breaker mechanism, used on Monday for the first time, was introduced last year.

While regulators say the mechanism is designed to curb wild swings in the stock market, investors have shown mixed reaction to it.

"If the stocks fall by the 10 percent daily limit, and I may want to sell to prevent further losses, the circuit breaker will prevent me from doing that until the following trading day. If stocks continue to fall the next day, the result will just be more losses. I do not think this is an effective protection for investors," said one.

"The circuit breaker mechanism will protect retail investors in terms of giving us more time to chill and curb potential risk," said another.

Some analysts also question the effectiveness of circuit breakers while the 10 percent daily price movement limit on A-shares remains in place.

For more on Monday's market slump, CRI's Bob Jones earlier spoke with Gao Shang, senior analyst with Guantong Futures.

Author： 　　　Source：xinhua　　　 Editor：Yang Fan