China Halts Trading After Stocks Plunge 7 Percent

China suspended stock trading on Monday after weak manufacturing data spooked investors and sent shares plummeting.

The benchmark Shanghai Composite shed 6.9%, while the Shenzhen Composite lost more than 8%.

The trading halt was China's first-ever use of circuit breakers -- a kind of emergency brake -- on main exchanges.

Investors were reacting to disappointing manufacturing data, which suggested the country's all-important factory sector is in for more pain. After improving for two months, Caixin's manufacturing PMI fell to 48.2 in December. Any number below 50 represents a deceleration.

Regulators announced plans for the circuit breakers in December in a bid to avoid a repeat of last summer's crash that sent markets around the world tumbling deep into the red.

Starting Monday, a 5% rise or fall on the CSI 300 Index, which tracks stocks in Shanghai and Shenzhen, triggers a 15 minute trading halt. A move of 7% at any time, or 5% in the last 15 minutes before markets close, stops trading for the rest of the day.

Circuit breakers are already used on major markets in the U.S. and elsewhere, and are designed to give investors a chance to calm down.

(CNN)