Chinese Stocks Drop , Dollar Bounce Drags Down Asia – Asia Market Wrap
Asia’s stock market saw losses led by Chinese companies, and the yuan plummeted to a four-month low as investors struggled with a subpar corporate outlook and indications that Beijing is loosening its control over the currency.
The Hang Seng Tech Index dropped over 4%, while China’s CSI 300 Index dropped as much as 1.6%, on track for its biggest daily decline since January. Shares from Korea and Australia fell as well. Japanese stocks increased. In the previous session, a measure of the region’s shares reached its highest point in over two years.
The unexpected rate cut by the Swiss National Bank on Thursday sparked anticipation that other major central banks might lower their policy rates more quickly than the Federal Reserve, which caused the dollar to rise against practically all of its counterparts in the Group of Ten and soar versus certain emerging-Asian currencies. Out of all the G-10 currencies, the Australian dollar lost the greatest strength.
The onshore yuan’s decline broke through a tightly monitored technical level following Chinese officials’ months-long attempt to keep the controlled currency within a restricted range. The daily reference rate was cut by the People’s Bank of China to the lowest level since early February, which some have read as a signal from Beijing to allow more devaluation in the midst of an uneven economic recovery.
