MARKETS-ASIA/OPEN Asia stock markets mostly higher following China's currency move

Record ID: 144052

  • Title: MARKETS-ASIA/OPEN Asia stock markets mostly higher following China's currency move
  • Date: 13th August 2015
  • Summary: SHANGHAI, CHINA (AUGUST 13, 2015) (REUTERS) INVESTORS INSIDE A SECURITIES FIRM STOCK INFORMATION ON SCREEN SCREEN SHOWING STOCK INFORMATION STOCK INFORMATION ON SCREEN INVESTOR LOOKING AT COMPUTER SCREEN INVESTOR LOOKING STOCK INFORMATION ON SCREEN (SOUNDBITE) (Mandarin) A 70-YEAR-OLD INVESTOR, SURNAMED GAO, SAYING: "There must be good influence and also bad influence. It
  • Embargoed: 28th August 2015 13:00
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  • Topics: General
  • Reuters ID: LVAEEV3CLALM4YUGXLYMHCROMOMD
  • Aspect Ratio: 16:9
  • Story Text: Asian shares were mostly higher at midday on Thursday (August 13), spurred by a late recovery on Wall Street and from efforts by China's central bank to slow the sharp descent of the yuan.
    China's central bank said on Thursday that there is no basis for further depreciation in the yuan currency given strong economic fundamentals, in a bid to reassure jittery global financial markets after it devalued the currency earlier in the week.
    The People's Bank of China (PBOC) said that the country's strong economic environment, sustained trade surplus, sound fiscal position and deep foreign exchange reserves provide "strong support" to the exchange rate The PBOC also said that it will monitor "abnormal" cross border flows.
    China's yuan fell for a third day on Thursday, after the PBOC shocked markets by pushing its official guidance rate down 2 percent on Tuesday (August 11), the sharpest adjustment in the history of China's foreign exchange market.
    The PBOC said at the time that the move was a one-off depreciation, but sources involved in the Chinese policy-making process told Reuters that powerful voices within government were pushing for the yuan to go still lower, suggesting pressure for an overall devaluation of almost 10 percent.
    The Shanghai Composite index opened higher but gave back the early gains and was down 0.62 percent to 3,862.06 at midday.
    Investors monitoring market movements at a securities firm were not sure what the long-term impact of the yuan devaluation would be.
    "There must be good influence and also bad influence. It (the devaluation) will be good to export enterprises. It will be good to natural resources stocks. It will do bad to real estate stocks. Devaluation of the renminbi is a trend. Devaluation is happening all around the world so China also needs to devaluate its currency. You can't change it," said a 70-year-old investor surnamed Gao.
    "I have no idea whether the increase of exports will boost the market. There must be some good impact. No one knows how much the market will be raised," said an 85-year-old investor surnamed Shi.
    Hong Kong's Hang Seng was up 0.30 percent at 23,986.76.
    The Nikkei was up 0.4 percent to 20,478 thanks to gains in some of its heavyweights but the Topix fell 0.4 percent to 1,659.53 as investors booked profits in large cap shares, such as banks and telecom companies.
    Seoul shares gained with the Korea Composite Stock Price Index (KOSPI) up 0.71 percent at 1,989.58.
    South Korea's central bank kept interest rates unchanged at 1.50 percent on Thursday, as expected, as it assesses the effect of previous policy easing on the struggling economy and waits for the U.S. Federal Reserve to start raising rates.
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