As North American markets nosedived this morning, the plunge tripped circuit breakers across the market. Circuit breakers are set by regulators to control market volatility. A single-stock circuit breaker will halt a trading of an equity for five minutes if it experiences a price increase or decrease of 10% with a five-minute period.
Within the first 30-minutes of trading several major Canadian companies tripped their breakers, including WestJet and Linamar as well as BCE on the NYSE.
The broader market is also subject to circuit breakers. In Canada, regulators take queues form the U.S. to determine if when these circuit breakers are triggers. On days when both the Canadian and U.S. markets are open trading on the S&P/TSX will be halted if the value of the Dow declines 10% or more below its previous trading day’s value.
North American markets dropped, following the lead of equity markets around the globe. The S&P/TSX, Dow Jones Industrial Average, the S&P 500 and the Nasdaq all stated the day off more than 5%. The selloff is being fuelled by a more than 8% drop in Chinese shares and a selloff in oil and other commodities today.
In North American markets the tech heavy Nasdaq took the brunt of panic driven selloff. It was down as much as 8% before recovering. Similarly, the Canadian info tech and telecom sectors are under similar pressure this morning. Both are down more than 3%, led lower by Avigilon and BCE.
This article originally appeared on Canadian Business.