China halts shares trade after 7% plunge

Trading on China's mainland benchmark index - the Shanghai Composite - was suspended after the market dramatically plunged 7%, according to BBC News.

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Trading was initially halted for 15 minutes after the stock market fell by 5%, triggering an automatic 15-minute trading suspension under a new system created to curb volatility, BBC News reported.

But shares continued to fall, leading regulators to end trading early.

A manufacturing survey earlier pointed to more bad news for the economy.

The Caixin/Markit purchasing managers' index (PMI) slipped to 48.2 in December, marking tenth consecutive month of shrinking factory activity in the sector.

A reading below 50 suggests a contraction in the sector, while anything above 50 suggests growth.

Read alsoChinese yuan weakens to 6.4814 against dollar FridayThe private PMI survey, which focuses more on small and medium-sized businesses, came after an official survey on Friday, which looked at larger companies, that suggested a fifth month of shrinking factory activity.

The Shanghai Composite fell 6.9% to 3,296.66 points before trading was halted for the day.

Read alsoChinese yuan falls to four-year lowUnder the new circuit breaker mechanism, moves of 7% from the previous session's close would trigger a trading suspension for the day.

Hong Kong's Hang Seng index was down by 2.8% to 21,293.13.

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