Wintry mix spreads across Minnesota

MPR News helps you turn down the noise and build shared understanding. Turn up your support for this public resource and keep trusted journalism accessible to all. 

Turn Up Your Support

China's stock markets stumbled badly on the first day of trading in 2016, with a 7 percent plunge forcing a market shutdown. The trigger mechanism that cut the day short in Shanghai and Shenzhen was created in response to last year's market crash, which brought trillions in losses.

Ripple effects from the Chinese plunge were felt around the world. Major markets in Europe dropped, with Germany's DAX down more than 4 percent at one point Monday. In the U.S., the Dow Jones industrial average closed the day down by 276 points, or 1.6 percent. The S&P 500 and the Nasdaq also finished lower.

NPR's Frank Langfitt reports on the situation in China:

After Monday's fall, the Shanghai Composite Index, which had soared to 5,178 points last June, now stands at 3,296. Compare that with the first day of trading in 2015, when it closed at 3,350.

Trading was halted before 2 p.m. local time. In addition to poor economic indicators, some analysts cite a rush to sell off stock after an initial drop, as investors feared the market might close early.

Also blamed for the volatility: the expiration this Friday of a six-month trading ban instituted after last summer's free fall. That ban forbade large investors and insiders to sell their stakes in companies in an attempt to prop up the market. The ban applies to investors holding 5 percent or more of a company's shares.


But the ban's looming lapse is creating new worries. Hong Kong lawmaker Christopher Cheung Wah-fung, who represents brokers, tells the 

, "Investors are worried about major shareholders selling when the ban expires this Friday, so they opted to sell in advance on Monday or over the next few days."  Copyright 2019 NPR. To see more, visit https://www.npr.org.

Business and Economic News

Among the factors blamed for China's drop: poor economic data and a looming rules change for large investors. Markets in Europe and the U.S. also were down.

7 percent drop closes Chinese stock markets early

Go Deeper.

Like this?

News you can use in your inbox