World stocks rebound as China soothes yuan weakness fears
Source: AP
By KELVIN CHAN
HONG KONG (AP) — World stock markets rebounded Thursday as the fall in the Chinese yuan slowed and the country's central bank tried to dampen speculation of further devaluation.
KEEPING SCORE: European stocks jumped in early trading, with France's CAC 40 rising 1.8 percent to 5,013.59. Germany's DAX gained 1.4 percent to 11,078.39 and Britain's FTSE 100 added 0.8 percent to 6,620.92. U.S. stocks were poised to open higher. Dow futures were up 0.2 percent to 17,049.00 and broader S&P 500 futures rose 0.2 percent to 2,089.30.
YUAN SLIDE: The Chinese currency fell for a third day but by late afternoon its decline was only 0.2 percent compared with drops of up to 1.9 percent on the previous days. It has dropped a total of 2.9 percent since Tuesday. The surprise move earlier this week to loosen the mechanism that controls the yuan and send the currency lower reverberated through global markets but the turmoil is now abating. Sentiment was soothed further by comments from the central bank. The official reason for letting the tightly controlled yuan fall is to make it more responsive to market forces but a weaker yuan also gives a competitive boost to exports from China, where the economy is slowing.
ANALYST VIEW: The Chinese central bank's "opaque communications policy may well have led to panic over-selling earlier in the week," market analyst Angus Nicholson of IG said in a commentary. "The markets have now digested the prospects of a CNY devaluation and are judging it as not as big of a risk as earlier."
FULL story at link.
An employee is seated as screens showing foreign exchange rates are displayed at a bank in Seoul, South Korea, Thursday, Aug. 13, 2015. Asian stock markets stabilized Thursday after a two-day sell-off sparked by China's currency devaluation. China's yuan fell again but the decline was smaller than before. (AP Photo/Lee Jin-man)
Read more: http://bigstory.ap.org/article/75d5222903964ab997690642ad416d1a/asian-stocks-stabilize-china-yuan-turmoil-subsides
