China stopped trading on its stock market Thursday for the second time this week.
Stock shares fell seven percent in value before trading was halted. The China Securities Regulatory Commission used its "circuit-breaker" system to keep share prices from falling even further.
The value of country's currency, the yuan, fell after the People's Bank of China pushed down its guidance rate one half of one percent. It is now 6.56 yuan for one U.S. dollar, the lowest level in almost five years.
Observers say the situation in both the stock and money markets could worsen in the coming days.
On Thursday, the Chinese stock market fell five percent shortly after opening, and then another two percent in just one minute after the time-out.
Some investors are blaming the commission for developing the circuit-breaker rules. The measures force the stock exchange to halt trading for 15 minutes if share prices fall five percent. The exchange is forced to close for the day if prices drop seven percent or more.
Chinese officials enacted the rule to cool the market, but it ended up causing concern among investors, says Johnny Fang. He works for Z-Ben Advisors, a financial advisory service.
"The effect on the market is opposite of what was expected. Investors regard the circuit breaker as an accelerator for the bear market," he added.
This also affected stock markets around the world. The leading measure of American stocks fell more than two percent Thursday. The Dow Jones Industrial Average closed down nearly 400 points.
Investors are worried about China's economy and falling world oil prices.
Late Thursday, China's regulators met to decide whether they should use the circuit breaker on Friday or not. They decided against using the system.
A spokesman for the regulatory commission said "the negative effect of the mechanism outweighed its positive effect."
The Shanghai and Shenzhen exchanges will not use the circuit breaker on Friday.
I'm Dan Friedell.
1.halt vi. 停止；立定；踌躇，犹豫 n. 停止；立定；休息 vt. 使停止；使立定
Striking workers halted production at the auto plant yesterday.
2.circuit-breaker n. 断路器；断路开关
There is an internal circuit breaker to protect the instrument from overload.
3.time-out n. 休息时间，暂停
After a time-out, Stockton’s three-point attempt hit the rim and bounced away, giving the Bulls their sixth NBA title in 8 years.
4.accelerator n. 油门；催化剂；[机] 加速装置
He eased his foot off the accelerator.
5.outweigh vt. 比…重（在重量上）；比…重要；比…有价值
The advantages of this deal largely outweigh the disadvantages.
1.The value of country's currency, the yuan, fell after the People's Bank of China pushed down its guidance rate one half of one percent.
push down 下推；叠加
The parents are complaining that some unpopular subjects are being pushed down the students'throats.
The grass had been pushed down in places where people had been lying.
2.Chinese officials enacted the rule to cool the market, but it ended up causing concern among investors, says Johnny Fang.
end up 最后来到；到头来
She fled with her children, moving from neighbour to neighbour and ending up in a friend's basement.
Every time they went dancing they ended up in a bad mood.