On the first trading day of 2016, which was also the day a circuit breaker came into effect in China's A-share market, trading in Chinese stocks was halted after the CSI300 index, which reflects the performance of both Shanghai and Shenzhen traded shares, plunged by more than 7 percent, triggering the circuit breaker.

The circuit breaker in the Chinese stock market is an emergency break mechanism introduced by the Chinese securities regulator to temporarily calm the stock market when it experiences abnormal price swings.

When the CSI300 index rises or falls by 5 percent, stock trading will be suspended for 15 minutes, and when the index rises or falls by more than 7 percent, that day's trading will be terminated.

That the emergency break mechanism was triggered on the day it came into effect was unexpected.

As to the first trigger of circuit breaker mechanism, China's securities regulator said on Monday that it played a positive role in protecting individual investors, and China will constantly improve the mechanism according to the actual outcomes from its implementation.

Market analysts generally attributed Monday's 7-percent fall to expectations for sales of stocks by major shareholders, the weaker than expected manufacturing activities in December and a steep decline in the yuan's exchange rate recently.

(China Daily 01/06/2016 page8)