U.S. Equities Advance for Third Day as Angst Over China Abates

U.S. stocks rose for a third day, continuing to rebound after a turbulent start to the year erased as much as $ 1.7 trillion from equities.

The Standard & Poor’s 500 Index added 0.4 percent to 1,946.66 at 9:32 a.m. in New York, after climbing 0.8 percent on Tuesday.

In a volatile session yesterday, the S&P 500 capped its first back-to-back advance in three weeks, as traders assessed China’s efforts to tame the financial-market turmoil that sent equities to the steepest weekly drop since 2011.

Concern that turbulence in China’s stocks and currency will spread to the global economy just as the Federal Reserve is increasing borrowing costs has spurred declines in markets in 2016. The S&P 500 posted its worst-ever start to a year, sliding 6 percent last week. The benchmark has slipped 9 percent through Tuesday from its record set in May, and was 3.8 percent above the bottom of an August swoon, which was also sparked by anxiety over the impact of China’s weakness on worldwide growth.

 

Source : Bloomberg

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China Stock Selloff Abates on State Efforts to Stabilize Yuan

China stocks rose in volatile trading after the benchmark index briefly fell below the 3,000 level as policy makers intensified efforts to stabilize the yuan.

The Shanghai Composite Index added 0.2 percent to 3,022.86 at the close, after losing as much as 1.3 percent. Technology and health-care shares led gains. The Chinese currency rose to a one-week high in offshore trading, almost erasing its discount to the onshore rate, after the central bank steadied the currency’s daily fixings and intervened to support the exchange rate.

After three daily declines of at least 5 percent for the Shanghai index since the start of the year, its relative strength index has fallen to 27 as of Monday, the lowest level since August, and below the 30 threshold signifying oversold conditions. The stocks gauge has slumped 15 percent in 2016, the world’s worst-performing global index, amid speculation policy makers will allow the yuan to weaken and the economic slowdown is deepening.

Source : Bloomberg

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