Circuit-breaker planned for stock market
China’s securities watchdog said that it is drafting a plan to implement a circuit-breaker mechanism in the country’s stock market to guard against extreme market volatility.
The regulator’s statement came after China’s A-share market has suffered a dramatic fall of 38 percent since its peak in mid- June. The plunge has erased $5 trillion in market value, triggering widespread fears that China’s stock market rout could cause a ripple effect to global markets.
The circuit-breaker mechanism refers to the measure adopted by stock exchanges to temporarily halt trading to avert panic selling after the stock index has fallen a certain percentage.