U.S. Stocks Fluctuate as Commodities Slide After China Efforts

U.S. stocks fluctuated, as oil and raw materials resumed a slump following efforts by China to shore up its currency. Treasuries gained, reversing earlier losses.

 

Oil, copper and corn all fell, as the rout in commodities deepened amid continued worries the expansion of the global economy will falter. China stepped up its defense of the yuan on Tuesday, with the People’s Bank of China repeatedly intervening in the offshore market on Tuesday, according to people familiar with the matter. Concern that turmoil in the nation’s stocks and currency would spread had helped spur declines in financial markets this year, pushing equities worldwide lower.

The S&P 500 rose 0.1 percent at 12:29 p.m. New York time, after jumping as much as 1.2 percent. The main U.S. equity benchmark’s tumble to start 2016 has left it 9.1 percent below its all-time high set in May. It is 3.7 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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