The move has prompted falls across Asian stockmarkets, with the Shanghai Composite index down 1.06 per cent at 3886.32 and the Hong Kong Hang Seng index down 2.59 per cent at 23,863.20 as at 8.30 this morning.
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On Wednesday, the Chinese yuan dropped to its four year low set off a rush in export-related stocks.
As markets surged, the Bloomberg Billionaires Index uncovered 50 new billionaires in the first half of 2015.
“If there are distortions, such as a very large gap between the onshore and offshore rates, the central bank will come in and stabilise the market“.
– The yuan devaluation could force Hong Kong’s retail landlords to cut rents as it threatens to erode shopping in the city by tourists from China, say analysts.
The reductions came after China on Tuesday adopted a more market-oriented method of calculating the currency rate, widely seen as a devaluation, which sent ripples through global financial markets. Critics call this a brazen attempt on China’s part to make its products artificially cheap on world markets while making imported goods unduly expensive in China. People also queried if the United States can raise interest rates when the yuan is devaluing as a US rate hike will further support the greenback.
The yen was at ¥ 124.56 the dollar.
Energy shares also took a hit as oil prices slid close to their low point for 2015 on signs a global glut of supplies will last into next year.
US benchmark West Texas Intermediate (WTI) for September delivery dropped 20 cents to US$42.03 in afternoon trade, the lowest price since March 2009. Brent crude for September gained 15 cents to $49.81.
Dutch insurer Aegon slumped 7.5 per cent after it missed earnings forecasts. Sinopec Shanghai Petrochemical Co (上海石油化工) jumped 7.7 percent yesterday, extending a five-day gain to 22 percent, after the Economic Information Daily reported that the government has drafted a five-year plan on oil and chemical industry development.
South Korea’s Kospi index trimmed gains by midday, after rising as much as 1 percent following the news from China.
Precision machinery maker Screen Holdings advanced almost 2 percent after announcing a 47.3 percent rise in April-June operating profit.
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– Kuala Lumpur fell 1.53 percent, or 24.80 points, to close at 1,596.82. DBS Bank rose 2.04 percent to Sg$19.02. France’s CAC 40 shed 2.2 percent to 4,985.63. Taiwan’s TAIEX went up 28.36 points or 0.34 percent to end at 8,311.74.
