China stocks slumped
as trading resumed after a week-long holiday which saw global equities
enter a bear market on concern over the strength of the world economy.
The Shanghai Composite
Index dropped 2.4 percent to 2,698.16 as of 9:47 a.m. local time, led
by financial and industrial companies. The MSCI All-Country World Index
retreated 2.6 percent since the city’s markets closed on Feb. 5, while
the Hang Seng China Enterprises Index tumbled 6.8 percent. The yuan
gained 0.9 percent in Shanghai, the biggest advance since at least 2007,
after the central bank strengthened the currency’s reference rate by
the most in three months.
China’s benchmark
stock index has plunged 22 percent this year on concern that the
economic slowdown and weakening yuan will exacerbate capital outflows.
The nation’s foreign-exchange reserves shrank in January to the smallest
since 2012, data released on Feb. 7 showed. Margin traders have also
been unwinding bullish bets on stocks amid speculation valuations are
still too high.
Trade data as well as
new loan figures for January are due Monday. Exports probably declined
for the seventh straight month, according to the median estimate in a
Bloomberg survey. China is targeting its economy to expand in the range
of 6.5 percent to 7 percent for this year, after recording 6.9 percent
growth in 2015 that was the slowest in 25 years.
The Hang Seng China gauge rallied 2.8 percent after slumping to a six-year low last week. The Hang Seng Index added 2.1 percent.
Source : Bloomberg
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