Minimal oil quotas and the moves of the Central Bank of Beijing unleash a new tsunami on the Asian stock market. In Shangai and Shentzen the “circuit breakers” have been triggered for the second time in order to limit the losses with the two lists which have put off exchanges till tomorrow, marking a daily decline of 7,3% and over 8%. Tokyo has lost 2,3%, Hong Kong has closed losing 2,7%, Sidney has closed with 2.2% less.
The new devaluation of the Yuan by the Chinese central bank (-0.5%) has knocked out the stock market of the country, which, after only half an hour of bargaining last night, was suspended while losing over 7%, later closed for the whole day. That move drew the criticism of many analysts and investors according to whom Beijing authorities have lost control over the situation. Weaker currency, the Yuan dropped 0.6%, reaching 6,5925, whereas the one quoted in Hong Kong has slightly grown. It may help exports, but it also increases the risk for the companies which have debts in dollars and increases fear due to the state of the economy of the country, which is worse than expected.
The consequences of this collapse are felt also in Europe. In Milan the first FTSE Mib index has marked a loss of 3.21%, and the Ftse It All-Share a drop of 2.98%. The first few minutes of trade confirm a heavy start for Piazza Affari, but with a partial easing of the climate even if at the beginning different watered-down suspensions have been recorded: the FTSE MIB Index has dropped 2%, Eni and MPS – considering the different titles of the main market basket – in the auction of volatility, while Unicredit sold more than 3%. Also the London Stock Market began with large losses: the FTSE 100 recorded a decline of 2.1%, reaching 5,944 points. A very weak departure was registered also in Paris: the CAC 40 index dropped 3%, reaching 4347 points.
The new devaluation of the Yuan by the Chinese central bank and the following collapse of the markets push up the Japanese yen again and the Euro, while pressing down the currencies of Australia and New Zealand, strong commodity exporters to Beijing. The Euro grows against the dollar by 0.3%, reaching 1.0816, but succumbs to the Yen by 0.1, reaching 127.5. The Japanese currency gained 0.3% against the dollar, reaching 117.9.