Asia: Stocks mixed as China fixes yuan firmer
Updated : 10:35
Asian stocks were mixed on Tuesday as China’s central bank fixed the yuan firmer again but concerns about the nation’s flagging economy remained.
The Shanghai composite finished up 0.21% while the Nikkei 225 and the Hang Seng fell 2.71% and 0.89%, respectively.
The People’s Bank of China set the mid-point for the yuan at 6.5628 per dollar, just two pips weaker than the previous strong fix and firmer than its spot levels late on Monday.
The spot yuan weakened from its overnight close to 6.5733 to the dollar, but offshore it strengthened as much as 180 pips to 6.5660.
“This recovery in the offshore yuan could well be enough to help put a floor under stock markets in the short term, as US markets managed to stabilise yesterday despite posting new multi week lows during the day,” said Michael Hewson, chief market analyst at CMC Markets.
However, Hewson warned: “With expectations growing that the Chinese yuan has further to go in terms of declines, due to a weakening Chinese economy, speculation is rising that oil prices could well push below the $30 a barrel level in the coming days, particularly given yesterday’s announcement by the EU that Iranian sanctions could be lifted fairly soon.”
The yuan has depreciated more than 1% since the start of the year, after losing 4.7% against the dollar last year.
Worries about weakening demand in China dragged commodities lower on Tuesday.
Brent crude fell 1.8% to $30.97 per barrel and West Texas Intermediate dropped 2.4% to $30.67 per barrel at 0912 GMT. Copper prices fell 0.33% on the Comex.
In Japan, stocks reopened in negative territory after a public holiday, led by declines in energy explorers as oil prices tumbled. The yen traded at 117.52 per dollar, from 118.29 when Japan’s stock market closed on Friday.
Goldman Sachs said it expects companies will buyback $7.5trn yen of shares in the 12 months starting April which will help send the Topix index up 28% by year-end from Tuesday’s close. The benchmark equity gauge has fallen 9.4% so far this year.