BEIJING: Chinese stocks trading in Hong Kong fell after the central bank devalued the yuan by the most in two decades and a broad gauge of credit slumped.
China lowered the yuan’s daily reference rate by 1.9 percent amid a recent slew of data showing decelerating growth for the world’s second-biggest economy. The nation’s broadest measure of new credit missed economists’ forecasts last month, according to data released on Tuesday, while weekend reports showed exports dropped more than expected and producer prices fell to the lowest level since 2009.
“The market is spooked by concern that the yuan may enter a devaluation trend and there’s some pressure for capital outflows given the fact that the U.S. may raise interest rates soon,” said Wei Wei, an analyst at Huaxi Securities Co. in Shanghai. “The credit data show the economy is still in the doldrums.”
The Shanghai Composite Index slipped less than 0.1 percent at the close, halting a two-day, 7.3 percent rally. The CSI 300 Index slid 0.4 percent. The Hang Seng Index in Hong Kong fell 0.1 percent.
The Chinese currency dropped 1.8 percent to 6.3210 per dollar as of 3:35 p.m. in Shanghai, the biggest one-day loss since the government unified official and market exchange rates in 1994. It slid 2.2 percent in Hong Kong’s offshore trading.
