Asia Stocks Little Changed as Yuan Drop Eases After PBOC CommentJonathan Burgos and Kana Nishizawa
Asian stocks were little changed near a seven-month low, as China’s currency slowed its decline after the central bank signaled support.
Inpex Corp., Japan’s biggest oil explorer, rose 1.1 percent as crude futures advanced. Foxconn Technology Co., whose products include Apple Inc.’s iPhone, jumped 8.1 percent in Taipei after earnings beat analyst estimates. SoftBank Group Corp. slid 2.6 percent in Tokyo after its biggest investment, Alibaba Group Holdings Ltd., tumbled in U.S. trading.
The MSCI Asia Pacific Index lost less than 0.1 percent to 138.18 as of 1:55 p.m. in London. The People’s Bank of China said it supports a strong, stable yuan in the long term after its Tuesday decision to devalue the currency roiled global markets. The move stalled the dollar’s advance and boosted the appeal of sovereign bonds amid speculation the Federal Reserve may hold off on raising U.S. rates for the first time since 2006.
“It’s been an overreaction,” said Sean Darby, Jefferies Group Inc.’s chief global equity strategist. “This has been on the agenda for some time. The move is probably a very good adjustment for China in the longer term.”
The Shanghai Composite Index climbed 1.8 percent at the close, erasing earlier losses of as much as 1.2 percent. The Hang Seng China Enterprises Index of mainland companies in Hong Kong and the city’s benchmark Hang Seng Index both gained 0.4 percent.
The onshore yuan pared declines to close 0.2 percent lower, while the freely traded offshore yuan rebounded 1.1 percent.
The Shanghai Composite has fallen 23 percent from its June peak amid concern the nation’s economic slowdown is deepening. Data this month showed producer prices slid in July to the lowest level since 2009 and overseas shipments dropped more than expected. Industrial production and retail sales also missed forecasts last month, according to a report on Wednesday.
“I won’t be surprised to see slightly more devaluation in the yuan,” Kirk Hartman, who helps oversee about $351 billion as Los Angeles-based chief investment officer of Wells Capital Management, said on Bloomberg TV. “I would stay a bit away from the market. Long-term, I think China is fine but you have be prepared for more volatility.”
South Korea’s Kospi index advanced 0.4 percent. The nation’s central bank held its key interest rate at a record low as it gauges the health of the economy and the impact of China’s devaluation.
Japan’s Topix index gained 0.1 percent, erasing earlier losses of as much as 0.9 percent. Taiwan’s Taiex index added 0.3 percent. Singapore’s Straits Times Index climbed 1 percent. Australia’s S&P/ASX 200 Index rose 0.1 percent. New Zealand’s NZX 50 Index slid 0.3 percent.
Futures on the Standard & Poor’s 500 Index were little changed. The underlying index rose 0.1 percent on Wednesday after erasing losses of as much as 1.5 percent.
(A previous version of this story was corrected to show the S&P 500 rose in the last paragraph.)
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