Business / Markets

Stocks rally on back of coal and steel sectors

( Updated: 2016-01-08 15:55

Stocks rally on back of coal and steel sectors

An investor looks at stock prices in a brokerage house in Beijing, Jan 8, 2016. [Photo/IC]

Chinese stocks rallied on Friday after the securities watchdog suspended the circuit breaker mechanism, which had been blamed for aggravating market uncertainty.

The benchmark Shanghai Composite Index closed at 3,186.41, up 2 percent, while the Shenzhen Component Index climbed 1.2 percent to 10,888.91 on Friday.

Coal and steel sectors led the gain, as China National Coal Group, Yanzhou Coal Mining Co, Datong Coal Mine, Shougang Group and Ansteel Co all surged by the daily limit of 10 percent.

The Shanghai gauge opened sharply higher and surged as much as 3.5 percent before closing up 61.41 points, as the regulator announced overnight the suspension of the circuit breaker mechanism that was only effective for four days.

The A-share market went through a roller-coaster slide this week, with the Shanghai index tumbling 10 percent and the market halting to end earlier twice.

Under the mechanism, trading of stocks, index futures and options would be suspended for 15 minutes when the CSI 300 fluctuates by 5 percent. Trading would be halted for the remainder of the day when the index moves by 5 percent after 2:45 pm or 7 percent at any time during the trading session.

The fall came as renminbi slumped to a five-year low.

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