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Economy

China Stocks Steady, Stabilize Markets

 

 

LONDON (AP) — Chinese stock markets eked out a last-minute gain Tuesday, a development that’s helped European shares recoup further recent losses and Wall Street futures point to solid gains at the open. A modest pick-up from overnight lows in oil prices also helped to shore up the mood.

KEEPING SCORE: In Europe, the FTSE 100 index of leading British shares was up 1.6 percent at 5,967 while Germany’s DAX rose 2.2 percent to 10,045. The CAC-40 in France was 2.1 percent higher at 4,405. Wall Street was poised for a solid open too, with Dow futures and the broader S&P 500 futures up 0.7 percent.

CHINA VOLATILITY: Worries about the Beijing’s ability to manage financial markets coupled with deepening fears about a protracted slowdown in the world’s No. 2 economy have kept investors on edge after sharp losses over the past week. After losing 5 percent the day before, the latest in a string of dramatic declines, stocks in Shanghai zigzagged throughout the day before ending 0.2 percent higher at 3,022.86. .

YUAN MOVES: China’s tightly controlled onshore yuan, which was the source of last week’s market turmoil after authorities guided it sharply lower, was little changed. However, interbank rates spiked for the offshore yuan, which is freely traded in Hong Kong, leading many to believe China’s central bank is intervening in the market in order to foil speculators trying to drive it lower.

QUOTABLE: “There have been strong signs … that markets are starting to find a bit of stability and risk appetite is starting to increase somewhat,” said James Hughes, chief market analyst at GKFX. However, Hughes cautioned that oil prices could prove a drag and that any test of the $30 a barrel level could leave oil, mining and any other commodity stock exposed to downside risk.

OIL THREATENS $30: Having nearly fallen below $30 a barrel, oil prices recovered somewhat but remained lower on the day. A barrel of benchmark New York crude was down 0.5 percent at $31.27 while the Brent international standard fell 0.1 percent at $31.53. On Monday, the benchmark rate slid 5.3 percent, to settle at $31.41 a barrel on Monday. The last time it finished lower was Dec. 5, 2003, when it closed at $30.73 a barrel.

ASIA’S DAY: Though Chinese stocks steadied, other Asian markets suffered as Japanese traders returned from holiday and responded to the recent downtrend. The country’s benchmark Nikkei 225 fell 2.7 percent to close at 17,218.96. Other regional indexes were dragged down by the Nikkei. Hong Kong’s Hang Seng shed 0.9 percent to 19,711.76 while South Korea’s Kospi dropped 0.2 percent lower to 1,890.86.

CURRENCIES: Trading in currency markets was fairly tepid with the euro down 0.1 percent at $1.0852 while the dollar was unchanged at 117.77 yen.

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