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Shanghai stocks plunged just over three percent at the open on Tuesday in what dealers described as panic selling, extending a near seven percent rout a day earlier that triggered an unprecedented early close.

The benchmark Shanghai Composite Index slid 3.02 percent, while the Shenzhen Composite Index, which tracks stocks on China's second exchange  Kelly Olynyk Jersey , tumbled 5.03 percent at the opening.

The Shanghai index slumped on Monday over concerns about the health of the world's second-largest economy after the release of weak manufacturing data, with the 6.86 percent fall sparking a wave of selling through global markets.

Regulators halted trading early on Monday, the first day a new "circuit breaker" mechanism was in place.

Under the system, a five percent drop in the CSI300 index, which covers both bourses  Justise Winslow Jersey , triggers an automatic 15-minute trading halt. A fall of seven percent means the two exchanges are closed for the rest of the day.

"The market is worried that about the new circuit breaker and investors tend to avoid risk when they see uncertainties. There was excessive panic selling after the circuit breaker was triggered yesterday," Haitong Securities analyst Zhang Qi told AFP after Tuesday's drop.

"The sharp falls should only be short term and the market will recover after it calms," he added.

Later on Tuesday morning the Shanghai market had moved into positive territory with the key index up 0.21 percent, or 6.77 points, to 3  Josh Richardson Jersey ,303.03 but the Shenzhen index was still down 0.94 percent, or 19.93 points, to 2,099.23.

- 'Reduce rushed decisions' -

The market watchdog, the China Securities Regulatory Commission (CSRC)  James Johnson Jersey , sought to calm the panic by defending the circuit breaker.

"The circuit breaker has a big impact in stabilising the market and its main function is to provide a 'cooling off period' for the market to avoid or reduce rushed decisions made during wide swings," it said in a statement on its verified microblog.

The CSRC said Tuesday that it was formulating regulations on major shareholders' selling, but said the rules will be announced "soon", leaving open whether the ban will be lifted in line with the original deadline.

"Monday was the first day that the circuit breaker became effective and people didn?t understand it so well, so it led to panic in the market  Hassan Whiteside Jersey ," Li Daxiao, an analyst at Yingda Securities, told AFP.

"The market will stabilise after it gets used to it," he said.

KIEV, June 12 (Xinhua) -- Ukraine had increased its defense spending for 2014 by 22 percent in response to the tensions in the eastern part of the country  Goran Dragic Jersey , a senior military official said here Thursday.

"Today, the overall budget of the Defense Ministry totals 20.1 billion hryvnyas (around 1.72 billion U.S. dollars)," Deputy Director of the Defence Ministry's Finance Department Sergei Vinnik told a media briefing.

Defense spending as a percentage of the gross domestic product (GDP) stood at 1.25 percent, Vinnik said.

He said the extra funds would be used to service military equipment, purchase fuel and ammunition for Ukrainian troops and fund the government's military operation in the east.

The unrest in the mostly Russian-speaking eastern part of Ukraine started shortly after the ouster of former President Viktor Yanukovych in February and the Crimean peninsula's affiliation with Russia in March.

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