China’s weekend announcement that it would make its currency more flexible sent Asian stocks soaring yesterday Monday June 21, as the yuan hit a five-year high against the dollar.
SHANGHAI jumped 2.90 percent, or 72.99 points, to close at 2,586.21.
TOKYO: The Nikkei rose 2.43 percent, or 242.99 points, to 10,238.01.
SYDNEY added 1.33 percent, or 60.7 points, to close at 4,612.6.
The move also sent the gold price soaring to a record high here as the weaker dollar made the precious metal more attractive.
China’s central bank said at the weekend that it would “strengthen the flexibility” of the yuan exchange rate, boosting hopes that Beijing is ready to adjust a two-year dollar peg and allow the currency to rise. However, it also insisted there would be no “large swings” in the currency and no one-off adjustment.
Markets welcomed the announcement as it has been a constant irritant between China and other nations, particularly the US.
Dealers are hopeful that the move will strengthen world trade, increase domestic demand and lead to bigger revenues for exporters selling goods to China.
“It looks like China is going to slowly appreciate the yuan and offshore equity markets will probably like that very much,” Macquarie Private Wealth Division director Martin Lakos told Dow Jones Newswires.
Markets were also buoyed by easing fears about Europe’s debt crisis after Spain’s successful bond sales.
HONG KONG: Shares jumped around 3 percent yesterday as China scrapped its currency peg and allowed the yuan to rise, boosting confidence in the global economic recovery.
The Hang Seng Index rose 3.1 percent to 20,912.18 points.
Analysts say the next strong technical resistance for the Hang Seng Index lies at its 200-day moving average, currently at 21,115.90.
SINGAPORE: Stocks climbed yesterday after China moved to allow the yuan more flexibility, which boosted confidence in global markets.
Fund flows to the region sent Singapore shares to their highest in almost six weeks. The benchmark Straits Times Index gained 1.84 percent, or 52.24 points, to 2,885.64.
DBS Group rose 40 cents to S$13.98 and Wilmar International gained 19 cents to S$6.02.
KUALA LAMPUR: Share prices on Bursa Malaysia staged their follow-through rebounds yesterday. Overall advancing counters outpaced declining counters by 591 to 161.
The Kuala Lumpur Composite Index (KLCI) rebounded from its intra-day low of 1,320.78 to its intra-day high of 1,335.31 yesterday. It closed at 1,335.29 points, posting a day-on-day gain of 17.60 points, or 1.34 percent.
In other markets:
SEOUL rose 1.62 percent, or 27.73 points, to 1,739.68.
TAIPEI jumped 1.90 percent, or 142.45 points, to close at 7,635.56.
JAKARTA rose 0.42, or 12.32 points, to 2,941.90.
MANILA closed 0.67 percent, or 22.40 points, higher at 3,357.88.
BANGKOK rose 1.80 percent, or 14.22 points, to close at 806.07.
MUMBAI rose 1.74 percent, or 305.73 points, to 17,876.55.
VIETNAM: The VN Index marked the forth consecutive hike when ended up at 514.75 points, increasing by 3.57 points or 0.7 percent. The market liquidity declined slightly with total matching order trade of 46.37 million shares valued at 1.382 trillion dong.
The HNX index climbed up 0.66 point or 0.4 percent to end at 164.01 points with total market trade of 43.2 million shares worth 1.381 trillion dong.
EUROPE: European shares rose for a ninth straight session yesterday to a seven-week closing high as China’s move to allow a flexible yuan raised hopes for a recovery in the global economy and boosted demand outlook for commodities.
Mining and energy shares were among the top gainers, taking strength from firmer metal and oil prices which climbed on expectations a stronger Chinese currency would lift purchasing power for foreign goods in the world’s third-biggest economy.
The FTSEurofirst 300 index of top European shares ended 1 percent firmer at 1,055.38 points, the highest close since early May. It is up more than 7 percent in nine sessions, but is up just 0.8 percent for the year as worries about debt levels in the eurozone hurt sentiment in April and May.
The London FTSE 100 rose 0.92 percent to 5,299.11 points.
In Frankfurt DAX index of leading German shares added 1.22 percent to 6,292.97 points and in Paris the CAC 40 index gained 1.33 percent to 3,736.15 points.
AMERICA: Stocks erased big gains Monday after investors lost some of their enthusiasm about China’s decision to let its currency appreciate against the dollar.
The Dow fell 8.23, or 0.1 percent, to 10,442.41. The index had risen 5.2 percent in the past two weeks, its biggest two-week gain since mid-November 2009.
The S&P 500 index fell 4.31, or 0.4 percent, to 1,113.20, and the Nasdaq fell 20.71, or 0.9 percent, to 2,289.09.
Treasury prices fell but were off their lows, while interest rates moved higher. Falling stocks sent more traders searching for the safety of government debt. The yield on the 10-year Treasury note rose to 3.25 percent from 3.23 percent late Friday.
The dollar rose against other major currencies and the euro fell.
Prices for many commodities climbed but ended off their highs. Crude oil rose 64 cents to $77.82 per barrel on the New York Mercantile Exchange. Gold hit a record $1,266.50 an ounce before settling down $17.60 at $1,240.70 an ounce. Copper jumped.
Three stocks fell for every two that rose on the New York Stock Exchange, where consolidated volume came to 4.5 billion shares, compared with 4.9 billion Friday.
The Russell 2000 index of smaller companies fell 6.89, or 1 percent, to 660.03.
Benchmark Currency Rates USD EUR JPY GBP CHF CAD AUD HKD HKD 7.7724 9.5762 0.0855 11.472 7.0039 7.5943 6.8187 AUD 1.1399 1.4044 0.0125 1.6824 1.0272 1.1137 0.1467 CAD 1.0234 1.261 0.0113 1.5106 0.9223 0.8979 0.1317 CHF 1.1097 1.3673 0.0122 1.6379 1.0843 0.9736 0.1428 GBP 0.6775 0.8347 0.0075 0.6105 0.662 0.5944 0.0872 JPY 90.94 112.045 134.227 81.948 88.8563 79.7817 11.7005 EUR 0.8116 0.0089 1.198 0.7314 0.793 0.712 0.1044 USD 1.2321 0.011 1.476 0.9011 0.9771 0.8773 0.1287 Bloomberg