U.S. Equities Rise as China’s Currency Moves Bolster Optimism

U.S. stocks climbed after China stepped up efforts to shore up its currency, bolstering optimism that officials in the Asian nation can tame the turmoil that has rattled global financial markets this year.

The Standard & Poor’s 500 Index rose 0.7 percent to 1,936.52 at 9:32 a.m. in New York, after yesterday erasing a drop of more than 1 percent to snap a three-day losing streak.

Worries that turbulence in China’s stocks and currency will spread to the global economy has spurred declines in markets in 2016 — the S&P 500 posted its worst-ever start to a year, sliding 6 percent last week. China’s measures today to defend the yuan helped ease investor concerns about a hard landing in the nation’s economy, sparking a record surge in Hong Kong’s money-market rates and deterring bearish speculators.

The main U.S. equity benchmark’s tumble to start 2016 has left it more than 9 percent below its all-time high set in May after coming within 1 percent of the record as recently as November. It was 3 percent above the bottom of an August swoon through Monday, which was also sparked by anxiety over the impact of China’s weakness on worldwide growth.


Source : Bloomberg


Japanese Shares Fall for Third Day After China Weakens Currency

Stocks fell in Tokyo for a third day as China again weakened its currency, undermining the competitiveness of Japanese exporters and raising concerns about the world’s second-largest economy. Apple Inc. suppliers tumbled on a report it may cut production.

The Topix sank 1.1 percent to 1,488.84 at the close in Tokyo, with all but three of its 33 industry groups falling. The Nikkei 225 Stock Average dropped 1 percent to 18,191.32, the lowest close since October. Shares erased early gains after China’s central bank lowered the reference rate on the yuan for a seventh day. The yen rose against the yuan in offshore trading to the strongest level since 2014.

Japanese companies that rely on China for a large part of their businesses declined. Air-conditioner maker Daikin Industries Ltd., which gets a fifth of sales from China, lost 2.5 percent. Rohm Co., an electronic components maker that relies on the country for a third of its revenue, sank 4 percent. Rohm counts Apple as one of its biggest customers.

Source: Bloomberg