Asian stocks stabilize as China yuan turmoil subsides

AP News
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Posted: Aug 13, 2015 12:03 AM
Asian stocks stabilize as China yuan turmoil subsides

HONG KONG (AP) — Asian stock markets stabilized Thursday after a two-day sell-off sparked by China's currency devaluation. China's yuan fell again but the decline was smaller than before.

KEEPING SCORE: Japan's Nikkei 225 rose 0.8 percent to 20,533.61 and South Korea's Kospi gained 0.4 percent to 1,983.50. Hong Kong's Hang Seng was little changed at 23,904.29 while the Shanghai Composite Index in mainland China slipped 0.9 percent to 3,852.32. Australia's S&P/ASX 200 advanced 0.6 percent to 5,411.80.

YUAN SLIDE: The Chinese currency fell for a third day on Thursday but by midday its decline was subdued compared with drops of up to 2 percent on the previous days. The surprise move earlier this week to loosen the mechanism that controls the yuan and send the currency lower reverberated through global markets but the turmoil is now abating. The official reason for letting the tightly controlled yuan fall is to make it more responsive to market forecasts but a weaker yuan also gives a competitive boost to exports from China, where the economy is slowing.

ANALYST VIEW: U.S. shares and some commodities such as oil and copper steadied overnight, which may support sentiment, "but all eyes will turn to the yuan rate set this morning to set the tone," CMC Markets chief strategist Michael McCarthy said in a commentary.

WALL STREET: Major U.S. benchmarks finished flat with the Dow Jones industrial average down less than a point to close at 17,402.51. The Standard & Poor's 500 rose less than 0.1 percent to 2,086.05. The Nasdaq composite inched up 0.2 percent, to 5,044.39.

CURRENCIES: The dollar rose to 124.42 yen from 124.26 yen in late trading Wednesday. The euro slipped to $1.1136 from $1.1156.

ENERGY: Benchmark U.S. crude slipped 2 cents to $43.28 in electronic trading on the New York Mercantile Exchange. The contract rose 22 cents to close at $43.30 a barrel on Wednesday. Brent crude, an international benchmark, added 3 cents to $50.21 in London.