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NEW YORK. — The New York Stock Exchange halted trading in all securities yesterday morning after a “major technical issue”. The exchange posted the news on its website and said “additional information will follow as soon as possible”. The halt began at 11.32am ET. The Department of Homeland Security said there was no sign of suspicious activity.
The NYSE has been hit by technical difficulties in the past but the scale of the closure was unprecedented. Also known as the Big Board, the NYSE is the world’s largest stock market and home to many of the world’s largest companies including AT&T, Bank of America, Ford and General Electric.
The US’s other large exchanges, including the technology heavy Nasdaq, remained open.
The halt came as China’s stock markets continued their free fall and the Greek debt crisis continued to rattle European investors.
The Dow Jones Industrial Average had fallen 213 points when trading was halted, a fall of 1.2 percent.
An NYSE spokesperson was not immediately available for comment.
In another development, China’s stock exchange regulator has imposed severe limits on stock market selling, having earlier warned of panic in the market as a range of recent government measures failed to prevent stocks plummeting a further 6 percent.
After 10 minutes of morning trading a wave of listed companies’ shares had been suspended across China’s two stock markets after they dropped by the daily limit of 10 percent.
The China Securities Regulatory Commission ruled that controlling shareholders and managers holding more than 5 percent of a company’s shares could not reduce their holdings for six months, in an attempt to maintain stability in the markets.
Earlier, the regulator’s statement saying there had been a surge in “irrational selling” and “panic sentiment” had done little to calm investor nerves.
The Shanghai composite index closed down 5.9 percent, while the SCI 300 index of the biggest listed companies in Shanghai and Shenzhen lost 6.8 percent.
The rout spread to other world stock markets, with Hong Kong’s Hang Seng index closing almost 6% down, its biggest one-day drop for nearly seven years.
About 1 400 companies, or more than half of those listed in Shanghai and Shenzhen — filed for a trading halt on Tuesday in an attempt to prevent further losses.
Chen Jiahe, chief strategic analyst at Cinda Securities, said this suspension was likely to last until the market was stabilised and liquidity was returned to the market.
Christopher Balding, professor of economics at Peking University, said it was not possible to know exactly why so many companies had suspended trading, but that a large number were doing so because they had used their own stock as collateral for loans and wanted to “lock in the value for the collateral”.
Unlike most other stock markets, where most investors are institutional, in China 80 percent are small retail investors. Balding said this was raising concerns of “political risk” in Beijing. With large numbers of private investors losing a lot of money, the government would be worried about “people protesting on the streets”.
As part of the attempt to prevent further losses, China’s state asset regulator had already ordered state-owned enterprises not to sell shares of their listed companies.
The People’s Bank of China said it was assisting the China Securities Finance Corporation (CSFC), the national margin trading service provider — which helps brokers lend money to institutions to buy shares — to help steady the market. — The Guardian.
Online Reporter