China’s onshore yuan weakened against the dollar on Wednesday to its lowest level since March 2011 after the central bank set its official midpoint rate for the currency.
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In other energy trading in NY, wholesale gasoline rose 2 cents to $1.291 a gallon, heating oil rose a quarter of a cent to $1.126 a gallon and natural gas edged down 0.3 cent to $2.334 per 1,000 cubic feet.
Regulators had closed trading early Monday because a seven percent fall triggered a new circuit breaker put in place during the summer to prevent sharp losses or gains.
Huang Cengdong, an analyst for Sinolink Securities in Shanghai, said he expects more turmoil in the Chinese stock market ahead of corporate earnings reports.
“Indeed, ample global stocks of crude and higher production elsewhere mean that geopolitical risks from the Middle East are not as great as they once were”, it said in a market commentary.
On Monday, the units received a battering after a weak round of manufacturing data out of China and a disappointing factory reading in the United States fuelled a sell-off in global financial markets.
Japan’s Nikkei 225 tumbled 3.1 per cent to close at 18,450.98 and Hong Kong’s Hang Seng retreated 2.4 per cent to 21,387.07.
CHINA DATA: An index of China’s manufacturing activity ticked up to 49.7 in December from 49.6 in November but it still remained below the 50-mark indicating contraction.
Renewed fears of a slowdown in China combined with Middle East tensions to spur a flight to safe haven currencies on Monday, with the yen and Swiss franc the main beneficiaries. The S&P 500 index lost 0.9 percent to 2,043.94. Shanghai shares slid 7 percent on the Chinese data, which sparked worries about the path of the global economy and made further USA interest rate hikes less likely.
It was the latest sign of the headwinds facing China’s economy that add to a downbeat outlook for Asian exporters. The world’s largest oil supplier executed a prominent Shiite cleric that prompted protesters to set fire to the Saudi Embassy in Tehran and Iran’s top leader to criticize Saudi Arabia.
LONDON, Jan 5 (Reuters) – Investors once again flocked to the safety of the yen on Tuesday as a modest pick-up in risk appetite gave way to jitters over Chinese market turbulence and stalling growth and the breakdown in relations between Saudi Arabia and Iran.
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The Japanese currency also strengthened against the euro, which briefly hit fresh nine-month low of Y127.32 before regaining ground to Y127.61 midday compared with Y127.99 late Tuesday.
