August 1, 2018
Yuan trades near weakest on record against currency basket
Developers lead declines in Hong Kong as new curbs announced
“The policies released from the Politburo meeting overnight weren’t anything surprising,” said Steven Leung, executive director at Uob Kay Hian (Hong Kong) Ltd.
“The selling is mainly because of a lack of investor confidence. We need something more drastic to change the view of investors.”
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Chinese equities and the yuan extended losses Wednesday afternoon, gaining downward momentum as concern over possible higher U.S. tariffs overwhelmed optimism about Beijing’s pledge to support economic growth.
The CSI 300 Index of large mainland-listed companies slid 2 percent, its biggest loss in a month. The offshore-traded yuan fell 0.17 percent to 6.8170 per dollar as of 4:59 p.m., while the yuan neared the weakest on record against a trade-weighted basket of currencies. The Hang Seng Index dropped 0.9 percent, erasing a gain of 0.7 percent, and the yield on 10-year government bonds slid 1 basis point.
“The policies released from the Politburo meeting overnight weren’t anything surprising,” said Steven Leung, executive director at Uob Kay Hian (Hong Kong) Ltd. “The selling is mainly because of a lack of investor confidence. We need something more drastic to change the view of investors.”
A communique issued after a Tuesday evening meeting of China’s 25 most senior leaders said the campaign to reduce leverage would continue at a measured pace, while noting that the external environment had “significantly changed.”
Property developers continued to slide Wednesday, after the Politburo vowed to clamp down on home-price gains. The local government in Shenzhen also revealed new tightening measures.
“Don’t expect any aggressive liquidity easing and property loosening. The policy tuning is for China to solve challenges more flexibly, and the policy orientation has always been the same.”
Materials and industrial companies were among the best performing stocks earlier in the day, boosted by a Politburo call for more infrastructure investment.
Source: Bloomberg News
https://www.bloomberg.com/news/articles ... yptr=yahoo