Shares mixed as deal­ers mull yuan de­val­u­a­tion

The China Post - - BUSINESS INDEX & -

Asian shares were mixed on Tues­day, with Shang­hai and Hong Kong end­ing roller­coaster ses­sions flat as in­vestors weighed news China’s cen­tral bank is de­valu­ing its cur­rency while other re­gional mar­kets fell.

Tokyo closed down 0.42 per­cent, or 87.94 points, at 20,720.75 while Syd­ney fell 0.65 per­cent, or 35.96 points, to close at 5,473.2.

South Korean shares fell 0.82 per­cent af­ter dis­ap­point­ing earn­ings, with the bench­mark KOSPI in­dex end­ing down 16.52 points at 1,986.65.

But Hong Kong and Shang­hai both ended see-saw ses­sions around the flat­line, af­ter China an­nounced a sharply lower daily ref- er­ence rate for the yuan against the U.S. dol­lar.

The 1.86 per­cent cut — the largest since the yuan was un­pegged from the green­back in 2005 — comes as spec­u­la­tion mounts China is pre­par­ing to widen its cur­rency trad­ing band for the first time since March 2014.

Weak trade and in­fla­tion data re­leased last week­end re­in­forced con­cerns that growth is slow­ing in the world’s sec­ond-largest econ­omy.

In Hong Kong, the bench­mark Hang Seng In­dex edged down 22.91 points to end the day at 24,498.21 on turnover of HK$96.1 bil­lion (US$12.4 bil­lion).

On the main­land, the bench­mark Shang­hai Com­pos­ite In­dex dipped 0.51 points to close at 3,927.91 on turnover of 712.3 bil­lion yuan (US$114.3 bil­lion).

The Shen­zhen Com­pos­ite In­dex, which tracks stocks on China’s sec­ond ex­change, added 0.41 per­cent, or 9.43 points, to 2,284.27 on turnover of 623.1 bil­lion yuan.

Chi­nese avi­a­tion shares were hit hard by the yuan move on fears the weaker cur­rency could hurt prof­its and make ser­vic­ing their dol­lar­de­nom­i­nated debt more ex­pen­sive.

In Hong Kong, China South­ern Air­lines led the slump to end down 18 per­cent at HK$6.76, while China Eastern Air­lines lost 16.5 per­cent to close at HK$5.45 and Air China sank 13 per­cent to HK$7.40.

On the main­land Shang­hai Juneyao Air­lines dropped 2.47 per­cent to 61.67 yuan and Hainan Air­lines lost 3.52 per­cent to 5.48 yuan.

Shang­hai stocks surged Mon­day on news Bei­jing is mak­ing fresh moves to sup­port eq­ui­ties, and on hopes of an over­haul of the coun­try’s in­ef­fi­cient gov­ern­ment-backed com­pa­nies.

Bei­jing has un­leashed an un­prece­dented wave of mea­sures to stop a rout in its share mar­kets, moves which cen­tral bank data showed Tues­day had driven up bank lend­ing some 17 per­cent to 1.48 tril­lion yuan be­tween June and July.

China Weighs on Euro­pean Stocks De­spite Greek Deal

Euro­pean

stocks

fell Tues­day af­ter a sur­prise de­val­u­a­tion of the yuan af­fected key ex­porters to China such as auto and lux­ury goods groups, off­set­ting news of a tech­ni­cal agree­ment to Greece’s bailout deal.

A sur­vey in­di­cat­ing that in­vestor sen­ti­ment in Ger­many fell sharply in Au­gust also weighed.

Lon­don’s bench­mark FTSE 100 in­dex dropped 0.67 per­cent to stand at 6,691.33 points in late morn­ing deals.

Frank­furt’s DAX 30 slid 1.23 per­cent to 11,462.88 points and the CAC-40 in Paris lost 1.11 per­cent to 5,137.71 com­pared with Mon­day’s close.

Athens’ main in­dex grew 1.79 per­cent to 702.62 points.

The de­val­u­a­tion weighed on sev­eral sec­tors, no­tably the auto and lux­ury goods mar­kets that rely heav­ily on Chi­nese de­mand.

In Paris, shares in LVMH Moet Vuit­ton shed 3.87 per­cent to 167.45 eu­ros, Peu­geot slid 3.59 per­cent to 17.70 eu­ros and Re­nault gave up 3.15 per­cent to 85.40 eu­ros.

In Frank­furt, Daim­ler shed 3.83 per­cent to 81.04 eu­ros and BMW re­treated by 3.78 per­cent to 89.87 eu­ros.

Burberry mean­while slumped 2.74 per­cent to 1,563 pence in Lon­don, where min­ers con­tin­ued to fall un­der the pres­sure of weaker Chi­nese growth, with Glen­core down 2.14 per­cent at 201.80 pence and BHP Bil­li­ton los­ing 1.74 per­cent to 1,188 pence.

Safe- haven gold f etched US$ 1,110.35 com­pared to US$1,094.78 late Mon­day. In other mar­kets: — Bangkok fell 0.83 per­cent, or 11.81 points, to 1,408.32.

— Malaysia’s main in­dex lost 1.07 per­cent, or 17.66 points, to close at 1,636.71.

— Sin­ga­pore closed down 1.36 per­cent, or 43.60 points, to 3,153.06.

— Jakarta ended down 2.66 per­cent, or 126.36 points, at 4,622.59.

— Mum­bai fell 0.84 per­cent, or 235.63 points, to 27,866.09.

— Welling­ton ended down 0.73 per­cent or 42.67 points at 5,822.35.

— Manila added 0.48 per­cent, or 36.10 points, to 7,570.45.

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