Chinese Stocks Set to Rally After Circuit Breakers Scrapped

Chinese stocks were set to open higher after the government abandoned new circuit breakers blamed for exacerbating the worst-ever start to the nation’s equities.

The Shanghai Composite Index was set to open 2.2 percent higher at 9:25 a.m. local time. Regulators announced the mechanism would be suspended late on Thursday night after plunges this week repeatedly triggered the circuit breakers, which were implemented on Monday. A falling yuan has also raised concern the economic slowdown is deepening. The central bank set the currency’s reference rate little changed Friday.

Source: Bloomberg

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Asian Stocks Rout Deepens as China Abandons New Circuit Breakers

Asian stocks fell for a fifth day, extending the worst start to a year since 2000, as concern about Chinese economic growth wiped more than $ 2.5 trillion from global shares this week.

The MSCI Asia Pacific Index declined 0.2 percent to 123.81 as of 9:08 a.m. in Tokyo, taking this year’s slide to 6.1 percent. The focus again will be the opening of mainland China’s market, after authorities backtracked on a new circuit breaker system that lasted all of four days. Officials suspended the rule after it triggered trading halts Monday and Thursday, saying it was only exacerbating declines.

The flip-flop on circuit breaker is adding to investor sentiment that authorities are improvising as they try to stabilize markets and shore up the economy. Policy makers have weakened the yuan for eight days straight and the authorities repeatedly intervened in the local equity market. Less than one month after the U.S. raised interest rates, investors are questioning the strength of global growth and corporate profit expansion.

Source: Bloomberg

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