China shares slid Monday, and losses in other regional markets deepened, as a rout that knocked trillions of dollars off global stocks last week ricocheted back to Asia. The Shanghai Composite Index fell 2.4% to 3109.95 and the smaller Shenzhen Composite Index was last down 3.5%.
Shares in Hong Kong sank to their lowest in roughly 2½ years. The Hang Seng Index was off 2.5% at 19952.63, on track to close below 20000 for the first time since June 2013. A gauge of Chinese firms listed in the city fell 3.5%.
Australia’s benchmark S&P/ASX 200 was down 1.3%, and South Korea’s Kospi fell 0.7%. Japan’s market was closed for a national holiday.
Worries about weakness in the Chinese yuan and how authorities convey their market expectations continue to unnerve investors.
Earlier the PBOC, to quote a story on Reuters, "guided the yuan" to a new midpoint fix of 6.5626 to the buck, a bit higher from Friday's midpoint of 6.5636. Monday morning it traded against the U.S. dollar at 6.5805.
Meanwhile Goldman Sachs put out a report saying :
China shares slid Monday, and losses in other regional markets deepened, as a rout that knocked trillions of dollars off global stocks last week ricocheted back to Asia.
The Shanghai Composite Index fell 2.4% to 3109.95 and the smaller Shenzhen Composite Index was last down 3.5%.
Shares in Hong Kong sank to their lowest in roughly 2½ years. The Hang Seng Index was off 2.5% at 19952.63, on track to close below 20000 for the first time since June 2013. A gauge of Chinese firms listed in the city fell 3.5%.
China's currency has already dropped quite a bit in the new year, but the yuan is still headed "meaningfully" lower this year, Goldman Sachs said.
The dollar will be fetching 7.0 yuan by year-end, up from 6.5807 currently, Goldman Sachs forecast in a note Monday.
That "reflects the combination of a view that Chinese policymakers are likely to be comfortable with modest (our forecast implies about 2.5 percent) depreciation against the CFETS (China Foreign Exchange Trade System) basket, and that the U.S. dollar is likely to appreciate further against other currencies in 2016."
China's central bank lets the yuan spot rate rise or fall a maximum of 2 percent against the dollar, relative to the official fixing rate.
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