Asian stocks head for nearly seven-month low as yuan tumbles

Monday’s close still has the index in bear market territory, 24.1% below the June 12 multiyear intraday high of 5,178.19. The move follows the People’s Bank of China’s (PBOC) recognition the yuan had strengthened excessively against the euro and the yen, says Natixis.


Chinese aviation shares were hit hard by the yuan move on fears the weaker currency could hurt profits and make servicing their dollar-denominated debt more expensive. The Company operates domestic airlines, airlines among Hong Kong, Macau and Taiwan, as well as worldwide airlines.

Close to 300 China funds that oversee more than 1 trillion yuan (Dh591 billion or $161 billion) are sitting on the sidelines with “ammunition” to enter the stock markets at any time, the Shanghai Securities News reported on Friday, citing its own calculations.

Airlines led declines in Hong Kong.

Shares of China Southern Airlines Co (NYSE:ZNH) traded down 16.58% during midday trading on Tuesday, reaching $44.23.

The CSRC was pursuing an excessively narrow objective, focusing only on getting the bull market going by delivering policies and speeches aimed at boosting investor confidence and spurring participation.

Zacks lowered shares of China Southern Airlines Co (NYSE:ZNH) from a buy rating to a hold ratingin a resaerch note published onFriday morning, Analyst Ratings.Net reports.

While our existing Chinese airlines’ financial models have not reflected any FX impact for FY15-16E, and admit that RMB depreciation could post downside risks to our forecast, we remain bullish on the Chinese airlines’ core operation considering the strong tourism, especially outbound demand, discipline capacity expansion and low fuel price environment.

– Bangkok fell 0.83 percent, or 11.81 points, to 1,408.32.


– Singapore closed down 1.36 percent, or 43.60 points, to 3,153.06. Oil and gas exploration firm Sugih Energy gained 1.55 percent to 394 rupiah, while lender Bank Mandiri fell 3.94 percent to 9,150 rupiah. Software giant Infosys rose 2.07 percent to 1104.35 rupees but Tata Steel slumped 5.46 percent to 246.90 rupees. This represents a dividend yield of 0.67%. New Zealand’s NZX 50 Index slid 0.5%.

China shares jump on sector restructuring hopes