The US Labor Department also reported Friday that job creation for the previous two months was also significantly stronger than originally reported, and more people were in the jobs market.
Advertisement
The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 2.0 per cent, to 3,361.56, while the Shanghai Composite Index also gained 2.0 per cent, to 3,186.41 points. Analysts said the market was likely being supported by buying from Chinese government entities that have been dubbed the “National Team”. It was the second time this week that a mechanism installed on January 1 to limit volatility was triggered, and led Chinese authorities late Thursday local time to suspend the tool, saying the design had not worked as expected and instead was exacerbating stock market losses.
In Europe, Germany’s DAX advanced 0.7 percent to 10,050.46 and Britain’s FTSE 100 gained 0.8 percent to 5,998.47.
After an initial steep fall of almost 300 points, the Dow Jones Industrial Average benchmark is now at 16,702 – a drop of 203 points, or about 1.2 percent.
The S&P 500 slid 1.1 percent at 4 p.m.in NY, after earlier climbing as much as 0.9 percent.
China’s stock market closed the first week of 2016 trading Friday up 2 percent after regulators enacted a circuit breaker mechanism to calm panicky investors.
Peter Boockvar, chief market analyst at The Lindsey Group, said removing the circuit breakers could take some short-term pressure off Chinese stocks – but won’t be a cure-all.
It appeared the “National Team” responded Friday by “intervening heavily”, said Nicholson.
Volatility in Chinese markets spurred a global selloff in riskier assets as concern deepened over the ruling Communist Party’s ability to manage an economic slowdown.
But South Korean and Australian shares bucked the regional uptrend with the Kospi index down 0.1 percent to 1,901.92, and the S&P/ASX 200 index losing 0.4 percent to 4,992.10.
The offshore yuan was last at 6.6727 to one US dollar, strengthening from a five-year low of 6.7511 Thursday.
China’s yuan firmed in early trade on Friday after the central bank strengthened its official rate for the first time in nine trading days. The American currency has risen over the past year, leaving the yuan overvalued compared with other developing countries and hurting Chinese exporters.
On Thursday, authorities lowered the yuan’s central rate against the United States dollar by 0.51 percent to 6.5646, the lowest since March 2011.
“We suspect this is poor communication by the People’s Bank rather than a deliberate devaluation”, said David Rees of Capital Economics.
Oil markets also pulled back after striking 12-year lows on Thursday. US West Texas Intermediate (WTI) was up 40 cents at $33.63 a barrel.
Advertisement
Brent crude cut a loss of more than six per cent to trade down 0.4 per cent, with traders citing short-covering.
