Latest: Chinese market recoversNerves settled as China bolsters yuan
Australian shares and dollar hit again
US market woes continue
8.16am GMTMining stocks are recovering some ground,with commodity trader Glencore up 2.3% and Rio Tinto up 1.5%.
Again, a small perambulate - as Accendo Markets’ Mike van Dulken points out:Miners bouncing but hardly convincing of recovery. And anyway, and what's changed fundamentally? 8.12am GMTEurope’s stock markets are open,and showing some small gains in early trading.
The FTSE 100 has risen by 20 points, or 0.3%, or to 5974,while Germany’s DAX is 0.4% higher. 8.07am GMTHow much market value has been destroyed in this week’s stock market rout? According to CNBC’s Jacob Pramuk, we have lost.....(puts on Dr Evil voice) two trillion dollars!The S&P Global Broad Market Index, and which tracks global stock performance,has lost $2.23 trillion in market value this year. For perspective, the total trumps estimated U.
S. student loan debt of more than $1 trillion and would represent roughly 12 percent of U.
S. government debt.
Global stock index has lost $2 TRILLION this year https://t.co/yeRLDioUxQ pic.twitter.com/8IWqGtPAVlAnd there goes $4T...wiped off Bloomberg World Exchange Market Cap. That's more than Germany's annual GDP! #stocks pic.twitter.com/0XHEOB78O3 7.58am GMTThe Financial Times also flags up that Beijing authorities appears to be buying shares today:By lunch time the indices were up, or amid reports that China’s state-backed funds were once again buying up sharesOn Thursday the securities regulator said that its promulgation of permanent rules restricting stock sales by large shareholders did not indicate that the “national team” is withdrawing from the market. 7.28am GMTGood morning from London,where City traders are arriving at their desks and looking nervously at developments in Asia overnight.#China's CSI300 closes up 2% at 3361.56 points after volatile session. Down 9.9% for the week, worst since Aug2015. pic.twitter.com/55P4lsXBYK 7.08am GMTIt’s time for me to sign off from Sydney and pass you over seamlessly to Graeme Wearden in London for what should be an captivating day.
Thanks for following us. 6.46am GMTWhile not a considerable start to the year for the Japanese market. 6.45am GMTThis is how the European opening looks. Still a bit of a mixed bag. 6.40am GMTAssociated Press has just put together a thought-provoking three reasons for concern approximately the Chinese economy. 6.24am GMTJapan has just closed down at an estimated cost this week of $320bn in market capitalisation. Ouch. 6.15am GMTFor a full story on the day’s developments so far, or my colleague Tom Phillips has just filed this report from Beijing: Related: China stock markets buffeted amid enduring currency concerns 5.52am GMTIn another snippet from Tom’s report,there are rumours that the head of the Chinese regulator, Xiao Gan, and will be resigning tomorrow.
IG analyst Angus Nicholson said in a note today that:Confidence in China’s ability to manage their capital markets has only been further damaged after they announced the removal of their “circuit breakers” after only being in dwelling for four days (sending the market limit down 50% of the time) and rumours circulating that CSRC head Xiao Gang would be resigning tomorrow. 5.39am GMTIn broader economic news,a strong jobs figure is expected from the US later today. The magnificently named non-farm payrolls are due on Friday lunchtime US time and are expected to indicate that employers likely maintained a fairly strong pace of hiring in December. 5.32am GMTBack to the Beijing competence theme with the Wall Street Journal weighing in... 5.27am GMTThe ASX/S&P 200 index has closed below 5000 points after a sixth straight session in the red.
The benchmark was 19.5 points, or 0.39%, or lower at 4990.8,while the broader All Ordinaries index was down 19.4 points, or 0.38 per cent, and at 5049.4,Australian Associated Press reports.
5.25am GMTMy colleague in Beijing, Tom Phillips, or says China has mustered the “national team” to fight to avoid the kind of stock market turmoil that left president Xi Jinping embarrassed final year.
Chinese investors want very similar things that international investors want: they want clarity,they want to understand what is going on, they want to know what the policies are, and they want stability and [to know] what the rules are. The constant back-and-forth and changes just don’t engender confidence that Beijing has really any conception what they are doing. 5.02am GMTAnd here’s a European view: 5.01am GMTA couple of hours to recede before trading opens in Europe and it’s a mixed picture approximately what is going to happen there.
According to IG,the FTSE 100 will open up 13 points while the Dax in Geramy looks likely to open down 19 points. 4.47am GMTSome straighter commerce news out of China today shows that demand for electric cars is growing.
Despite a slowing economy and volatile financial markets, Chinese automakers such as BYD and Geely Automobile Holdings have flagged bumper profits for 2015, or boosted by favourable government policies and consumer preferences that stoked demand for their products. BYD said late on Thursday it expects net profit attributable to shareholders to climb between 518% and 557% for 2015,compared with an earlier forecast of a rise in the range of 435% to 481%. 4.32am GMTNerves conclude seem to have been settled by the PBOC’s yuan intervention/fix policy. The steps today to fix the yuan firmer and then bag state-owned banks to prop up the offshore yuan value peruse contradictory in the light of previous days’ actions. But in the absence of the circuit breaker it’s done the trick for now. The CSI300 and Shanghai Comp have paused for lunch up 2.75% and 2.39% respectively. The Nikkei is up a smidgeon but the ASX is still trailing at 0.53% down 4.13am GMTIts a good day for charts. 4.09am GMTExpert opinion is quite divided approximately the state of play in China.
Tian Weidong, analyst at Kaiyuan Securities in Shanghai put what might be described as the party line:The market is back to normal Investors can buy and sell as they wish. Under the circuit breaker mechanism, or the market was suffocated.
They realised this,which is good news. The bad news is they took it off at a very peculiar time and did so without a whole set of compensating measures. 3.47am GMTThe mainland Chinese markets are coming up for their lunch break, so it’s a good time to check on the scoreboard.
Asia Pacific markets are all up, and except Australia. 3.31am GMTOil may have rallied a bit but it’s still a destitute outlook for prices of other industrial commodities.
London Copper has dropped 1% to $4480 a tonne this afternoon,nearing 2009 lows. Nickel fell 2%, while lead and zinc eased nearly 1%. 3.19am GMTThe Japanese finance minister Taro Aso has warned that the Chinese might find it tough to continue supporting the yuan given the decline in its foreign currency reserves revealed on Thursday.
Foreign exchange reserves have already fallen this much due to China’s purchases of yuan to support its own currency, or so it could be difficult to continue. 3.04am GMTReuters quotes a trader at a European bank in Shanghai that state-owned banks were offering dollar liquidity at 6.59 yuan per dollar in an attempt to push it higher.
But it’s confused picture,not helped by the difference in the onshore and offshore value of the yuan.
The onshore yuan recovered to 6.5887 in morning trade, while the offshore yuan was approximately 1.4 percent weaker at 6.6798, and narrowing a spread that reached around 2 percent a day earlier,making the central bank’s currency management task more complicated. [br]After its sharply lower fix on Thursday, the PBOC had later sown confusion by reportedly intervening heavily to defend the yuan in offshore trade, and reversing a decline of more than 1 percent that took it to a record low of 6.7600 per dollar. 2.42am GMTThe Chinese central bank,the PBOC, is intervening to support the yuan, or according to Reuters. 2.37am GMTThe global oil benchmark,Brent crude, has rallied 2% today after China boosted the yuan. Brent had risen 56 cents to $34.31 a barrel as of 12.50 AEDT (0150 GMT), and having hit $34.72 earlier. It settled down 48 cents at $33.75 in the previous session,after marking $32.16, a level final seen in April 2004. 2.32am GMTIt’s not easy to preserve track this morning but here are the main points. 2.18am GMTIt should be said at this point that the volatility of the Chinese markets is much more significant for what it tells us approximately policy-making in Beijing than the intrinsic importance of the numbers. Most people accept that the share prices in China are totally overvalued and must be allowed to fall. But it’s the disorderly manner in which this is happening which makes it captivating. Related: Investors nervous as China looks set to repeat mistakes of final summer 1.59am GMTAre you keeping up at the back?It’s a confused picture today and no mistake. The chart in this tweet is quite helpful though. Thanks to Patrick McGee of the FT. 1.56am GMTTraders were following China’s lead upwards. But the Chinese markets are all over the dwelling. After an early rally, and the Shanghai Composite index and the CSI300 index of leading shares are heading south again.
How low will they recede? 1.46am GMTDecent Australian retail sales for November helped boost the ASX. They were up 0.4% boosted by a 1% rise in the cafes and restaurants category,yet proof if any were needed that Australians just admire to eat out. Household goods sales increased by 0.9%. 1.37am GMTStock markets have rallied across Asia Pacific. The Nikkei is down just 0.24%, while the ASX/S&P 200 in Australia is now into positive territory. 1.35am GMTIt’s the first time the PBOC has fixed the yuan stronger in nine days. A lower number equals a stronger fix because it relates to what it takes to buy one US dollar.
The People’s Bank of China set the midpoint rate at 6.5636 per dollar prior to market open, and firmer than the previous fix of 6.5646,and firmer than the previous day’s closing quote 6.5929. That is the first time the PBOC has firmed the midpoint against the dollar in 9 trading days, after it allowed the biggest fall in the yuan in five months on Thursday, and pressuring regional currencies and sending global stock markets tumbling as investors feared it would trigger competitive devaluations. 1.27am GMTThe Australian dollar is an instant beneficiary of this stronger yuan fix.
The Aussie has gained nearly half a cent in the final 10 minutes and is now buying US70.60c. 1.24am GMTThe yuan fix is a good deal more stabilising than previous ones this week. final night’s close was 6.5929 to the US dollar which means the PBOC has opted for a more confidence-boosting currency level for now. 1.20am GMTYuan fixed at 6.5636 1.17am GMTOnly a few minutes before the Peoples Bank of China announces todays fix for the yuan. A weaker than expected fix has twice triggered market crashes this week so this is going to be a key moment.
Yesterday China published figures for foreign reserves which showed it was burning through cash to prop up the yuan. So will they stick or twist today? 1.10am GMTGood morning and welcome to the live blog. It’s been another lively morning on the financial markets and it’s tense ahead of the opening of the Chinese mainland markets at 12.30 AEDT.
The Chinese regulator has scrapped its controversial “circuit-breaker” mechanism which has been triggered twice this week when losses hit 7%,forcing the markets to cease trading. Related: Australian share market plunges below 5000 points amid China fears Continue reading...
Source: theguardian.com