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Asian markets open with investors on edge after Dow extends losses – live Asian markets open with investors on edge after Dow extends losses – live
(35 minutes later)
3.34am BST03:34
This snapshot via Google Finance gives an indication of the volatility of the Shanghai Composite in its first hour this morning:
3.29am BST03:29
Meanwhile, Fergus Ryan reports from Beijing, a new survey out today indicates the recent stock market volatility may not be affecting Chinese consumer sentiment.
The Westpac MNI China Consumer Sentiment Indicator rose in August, the third straight month it has done so.
The indicator rose 1.8% for the month – the highest it has been since May 2014.
Westpac economist Huw McKay said that while global investors were increasingly anxious about China’s growth prospects, Chinese consumers are more sanguine.
“The Chinese economy remains a major source of concern for global investors. This anxiety is shared to some degree by Chinese households, but where foreign scepticism vis-à-vis growth prospects appears to be deepening, consumers are tentatively marking up growth prospects, albeit from a very low level” he said.
However, it’s important to note the survey was conducted before China’s surprise currency devaluation move and before blasts ripped through a chemical warehouse in Tianjin this month.
3.20am BST03:20
China’s response on Tuesday to the previous day’s precipitous falls had a marked effect on markets yesterday and will no doubt continue to do so today.
The key moves by the People’s Bank of China were:
Interest rates in the country are now at an all-time low after having averaged 6.36% since a high of 10.98% in June 1996.
Larry Elliott, the Guardian’s economics editor, called it a “measured response”:
Beijing had the scope to do more to boost confidence after the turmoil of recent days, but has opted for a more measured approach at this stage.
There are reasons for this. Capital has been leaving China at a rapid rate in recent weeks, and a big reduction in interest rates would have provided extra encouragement for investors to take their money elsewhere.
The official line up until now has been that the Chinese economy is slowing in line with expectations rather than in the early stages of a full-blown recession. Slashing interest rates would have been seen as evidence that the economy was indeed suffering a hard landing and might have further damaged confidence.
China wants to keep some of its powder dry. The statement issued by the PBoC, which talked about the downward pressure on the economy and the need to have more flexible policy tools to cope with the stock market blowout, reflects how concerned policymakers are about recent events.
3.11am BST03:11
More on the yuan, set today at its weakest level for four years:
China’s yuan weakened early on Wednesday after aggressive monetary easing by the central bank on Tuesday evening.
The People’s Bank of China set the midpoint rate at 6.4043 per dollar prior to the market open, its weakest level since August 2011, and firmer than the previous day’s closing quote of 6.4124.
The spot market opened at 6.4181 per dollar and was changing hands at 6.4181 in early trade, 57 pips away from the previous close and 0.22% away from the midpoint.
The spot rate is allowed to trade with a range 2% above or below the official fixing on any given day.
The offshore yuan was trading -1.18% away from the onshore spot at 6.495 per dollar.
In a long-awaited move which some economists said was overdue, the People’s Bank of China (PBOC) said it was cutting the one-year benchmark bank lending rate by 25 basis points to 4.6% and reducing reserve requirements (RRR) by 50 basis points to 18% for most big banks.
Premier Li Keqiang was quoted by state television as saying that there is no basis for continued depreciation of the yuan on Tuesday.
The central bank stunned global markets by devaluing the currency by nearly 2% on 11 August and then scrambled to stabilise it. However, many investors fear there is strong political pressure to allow it to slowly weaken further lower to boost weak exports and the cooling economy.
That report via Reuters in Shanghai.
3.01am BST03:01
My colleague Fergus Ryan sends this latest from an edgy morning in China:
The central bank’s move to ease monetary policy buoyed stocks at the opening of trade on Wednesday, but experts are questioning whether the rally will be durable.
The Shanghai Composite has swung wildly in morning trade but appears to be flirting with the 3000-point mark.
2.54am BST02:542.54am BST02:54
Taiwan stocks have fallen this morning.Taiwan stocks have fallen this morning.
As of 1:40 GMT (that’s about 10 minutes ago), the main TAIEX index was off 0.8%, to 7,613.24 points, with the electronics subindex giving up 0.5% and the financials subindex dropping 0.6%, Reuters reports from Taipei.As of 1:40 GMT (that’s about 10 minutes ago), the main TAIEX index was off 0.8%, to 7,613.24 points, with the electronics subindex giving up 0.5% and the financials subindex dropping 0.6%, Reuters reports from Taipei.
On Tuesday, the main ended up 3.6% after the government said a large state-supported fund will step in “any time” to shore up the sagging market.On Tuesday, the main ended up 3.6% after the government said a large state-supported fund will step in “any time” to shore up the sagging market.
TSMC, the world’s top contract chip maker, was off 1.6%. Mediatek, Taiwan’s biggest chip design house, lost 2%.TSMC, the world’s top contract chip maker, was off 1.6%. Mediatek, Taiwan’s biggest chip design house, lost 2%.
The Taiwan dollar firmed T$0.311 to T$32.568 per US dollar.The Taiwan dollar firmed T$0.311 to T$32.568 per US dollar.
2.48am BST02:482.48am BST02:48
Australia opens down 1%Australia opens down 1%
Australian prime minister Tony Abbott has said the global economy is not a “one-way escalator”, adding that the instability in world stock markets was a correction after “over-exuberance” in the Chinese market earlier in the year, the AAP news agency reports.Australian prime minister Tony Abbott has said the global economy is not a “one-way escalator”, adding that the instability in world stock markets was a correction after “over-exuberance” in the Chinese market earlier in the year, the AAP news agency reports.
“Australians have every reason to face the future with confidence not withstanding the headwinds overseas,” Abbott said.“Australians have every reason to face the future with confidence not withstanding the headwinds overseas,” Abbott said.
The Australian share market opened 1% lower on Wednesday.The Australian share market opened 1% lower on Wednesday.
At 1010 AEST (0010 GMT) on Wednesday, the benchmark S&P/ASX200 index was down 51.4 points, or 1.00%, at 5,085.9, while the broader All Ordinaries index was down 49.4 points, or 0.96%, at 5,094.4.At 1010 AEST (0010 GMT) on Wednesday, the benchmark S&P/ASX200 index was down 51.4 points, or 1.00%, at 5,085.9, while the broader All Ordinaries index was down 49.4 points, or 0.96%, at 5,094.4.
On the ASX 24, the September share price index futures contract was down 69 points at 5,058, with 25,730 contracts traded.On the ASX 24, the September share price index futures contract was down 69 points at 5,058, with 25,730 contracts traded.
Treasurer Joe Hockey, speaking on the sidelines of a summit in Sydney on economic reform, warned:Treasurer Joe Hockey, speaking on the sidelines of a summit in Sydney on economic reform, warned:
There will be volatility in the markets. There are extraordinary capital flows around the world at the moment, in part linked to speculation about the US federal reserve increasing rates.There will be volatility in the markets. There are extraordinary capital flows around the world at the moment, in part linked to speculation about the US federal reserve increasing rates.
Frankly, you’ve got to see through the volatility and look at the fundamentals and the fundamentals are Australian companies are profitable, they’re well run and Australia is in a very good position for the future.Frankly, you’ve got to see through the volatility and look at the fundamentals and the fundamentals are Australian companies are profitable, they’re well run and Australia is in a very good position for the future.
Updated at 2.52am BSTUpdated at 2.52am BST
2.42am BST02:422.42am BST02:42
And then, six minutes into trading:And then, six minutes into trading:
Shanghai Composite turns negative.Shanghai Composite turns negative.
China shares: Shanghai Composite up 0.53% at the open after rate cut, but back in negative territory after 6 mins trade. Long day ahead.China shares: Shanghai Composite up 0.53% at the open after rate cut, but back in negative territory after 6 mins trade. Long day ahead.
2.39am BST02:392.39am BST02:39
China's major stock indexes open upChina's major stock indexes open up
Reuters files this snap summary from China openings:Reuters files this snap summary from China openings:
China’s major stock indexes opened up on Wednesday after aggressive monetary easings announced by the central bank on Tuesday evening following a massive market slide.China’s major stock indexes opened up on Wednesday after aggressive monetary easings announced by the central bank on Tuesday evening following a massive market slide.
The CSI300 index rose 0.7% to 3,062.57 points, while the Shanghai Composite Index gained 0.5% to 2,980.79 points.The CSI300 index rose 0.7% to 3,062.57 points, while the Shanghai Composite Index gained 0.5% to 2,980.79 points.
The benchmark indexes had tumbled 19% in the previous three sessions.The benchmark indexes had tumbled 19% in the previous three sessions.
China CSI300 stock index futures for September rose 0.4%, to 2,842, -220.57 points below the current value of the underlying index.China CSI300 stock index futures for September rose 0.4%, to 2,842, -220.57 points below the current value of the underlying index.
The People’s Bank of China cut interest rates and lowered the amount of reserves banks must hold for the second time in two months on Tuesday, ratcheting up support for a stumbling economy and a plunging stock market.The People’s Bank of China cut interest rates and lowered the amount of reserves banks must hold for the second time in two months on Tuesday, ratcheting up support for a stumbling economy and a plunging stock market.
China’s Financial Futures Exchanges announced on Wednesday morning that they will raise transaction fees and margin requirements for index futures to curb speculation.China’s Financial Futures Exchanges announced on Wednesday morning that they will raise transaction fees and margin requirements for index futures to curb speculation.
Benchmark mainland indexes gave up all the gains made from Beijing’s unprecedented stock market rescue in July, in which hundreds of billions of dollars were directed into the market, and this week entered negative territory for the year-to-date.Benchmark mainland indexes gave up all the gains made from Beijing’s unprecedented stock market rescue in July, in which hundreds of billions of dollars were directed into the market, and this week entered negative territory for the year-to-date.
The Hang Seng index in Hong Kong was up 0.1%, to 21,434.25 points.The Hang Seng index in Hong Kong was up 0.1%, to 21,434.25 points.
2.31am BST02:312.31am BST02:31
Yuan fixed at lowest level since August 2011Yuan fixed at lowest level since August 2011
Shanghai composite is up by 0.98% in its first 15 minutes.Shanghai composite is up by 0.98% in its first 15 minutes.
2.25am BST02:252.25am BST02:25
Justin McCurryJustin McCurry
The US dollar has so far avoided any significant drops against the yen, bringing some cheer to Japanese policymakers, who had voiced concern about the Japanese currency’s surges earlier in the week.The US dollar has so far avoided any significant drops against the yen, bringing some cheer to Japanese policymakers, who had voiced concern about the Japanese currency’s surges earlier in the week.
A weaker yen is a central part of Japanese prime minister Shinzo Abe’s quest to boost profits for his country’s auto and consumer electronics manufacturers. A strong yen, however, eats into exporters’ profits once they are repatriated from overseas.A weaker yen is a central part of Japanese prime minister Shinzo Abe’s quest to boost profits for his country’s auto and consumer electronics manufacturers. A strong yen, however, eats into exporters’ profits once they are repatriated from overseas.
The dollar was trading in the upper 118 yen range on Wednesday morning in Tokyo after suffering another drop on Wall Street overnight.The dollar was trading in the upper 118 yen range on Wednesday morning in Tokyo after suffering another drop on Wall Street overnight.
The US currency fetched 118.67-69 yen compared with 118.81-91 yen in New York and 119.72-75 yen in Tokyo late on Tuesday.The US currency fetched 118.67-69 yen compared with 118.81-91 yen in New York and 119.72-75 yen in Tokyo late on Tuesday.
On Monday, the dollar had dipped to as low as 116.15 yen in New York, prompting Japan’s finance minister, Taro Aso, to warn investors not to push the yen up too far.On Monday, the dollar had dipped to as low as 116.15 yen in New York, prompting Japan’s finance minister, Taro Aso, to warn investors not to push the yen up too far.
Investors regard the yen as a “safe haven” currency when global markets are hit by the kind of turmoil witnessed in recent days.Investors regard the yen as a “safe haven” currency when global markets are hit by the kind of turmoil witnessed in recent days.
2.20am BST02:202.20am BST02:20
Will no one think of the billionaires?Will no one think of the billionaires?
Bloomberg says 24 billionaires saw their wealth fall by more than $1bn on China’s Black Monday.Bloomberg says 24 billionaires saw their wealth fall by more than $1bn on China’s Black Monday.
The biggest loser was the richest man in Asia, Chinese tycoon Wang Jianlin, who lost US$3.6bn, the Bloomberg Billionaires Index says. He still has US$31.2bn left.The biggest loser was the richest man in Asia, Chinese tycoon Wang Jianlin, who lost US$3.6bn, the Bloomberg Billionaires Index says. He still has US$31.2bn left.
Microsoft founder Bill Gates was the second biggest loser of the day, with US$3.2bn wiped from his fortunes.Microsoft founder Bill Gates was the second biggest loser of the day, with US$3.2bn wiped from his fortunes.
Hong Kong resident Li Ka-shing came in third, with a loss of US$1.5bn, followed by Jack Ma, founder of ecommerce group Alibaba and the third richest man in Asia, who waved goodbye to US$546m.Hong Kong resident Li Ka-shing came in third, with a loss of US$1.5bn, followed by Jack Ma, founder of ecommerce group Alibaba and the third richest man in Asia, who waved goodbye to US$546m.
Updated at 2.25am BSTUpdated at 2.25am BST
2.11am BST02:112.11am BST02:11
Reuters reports from Manila that gold has edged up this morning following its biggest drop in five weeks, as global equities were revived after China cut interest rates and bank reserve requirements to support a flagging economy.Reuters reports from Manila that gold has edged up this morning following its biggest drop in five weeks, as global equities were revived after China cut interest rates and bank reserve requirements to support a flagging economy.
But China’s move appears to have only boosted equities temporarily, with US stock futures resuming their descent and Asian shares slightly lower. Further losses in equities could switch appetite back to safe-haven assets such as gold.But China’s move appears to have only boosted equities temporarily, with US stock futures resuming their descent and Asian shares slightly lower. Further losses in equities could switch appetite back to safe-haven assets such as gold.
2.05am BST02:052.05am BST02:05
Meanwhile, back to China, where all is rosy, according to Xinhua, the state’s official news agency:Meanwhile, back to China, where all is rosy, according to Xinhua, the state’s official news agency:
Despite the tumbling of stock markets, investors should forgo their unnecessary anxiety over China because the long-term prediction for China’s economy still remains rosy and Beijing has the will and means to avert a financial crisis.Despite the tumbling of stock markets, investors should forgo their unnecessary anxiety over China because the long-term prediction for China’s economy still remains rosy and Beijing has the will and means to avert a financial crisis.
The plunge of stocks, the depreciation of China’s currency and its slowing growth pace after years of high-speed development have all put a question mark on the health of the world’s second largest economy.The plunge of stocks, the depreciation of China’s currency and its slowing growth pace after years of high-speed development have all put a question mark on the health of the world’s second largest economy.
However, such a worry is completely unnecessary. China’s economy will remain robust and the positive prediction on its future should not be affected by the current fluctuation of stock markets.However, such a worry is completely unnecessary. China’s economy will remain robust and the positive prediction on its future should not be affected by the current fluctuation of stock markets.
International investors should calm themselves down and drop their unfounded anxiety over China’s economic future.International investors should calm themselves down and drop their unfounded anxiety over China’s economic future.
That’s all OK, then.That’s all OK, then.
2.00am BST02:002.00am BST02:00
Here’s a reminder of how things looked from the US at the close of Tuesday, with the Nasdaq, the Dow and the S&P 500 all down at the closing bell:Here’s a reminder of how things looked from the US at the close of Tuesday, with the Nasdaq, the Dow and the S&P 500 all down at the closing bell:
1.54am BST01:541.54am BST01:54
Nikkei falls 0.22% in first 15 minutes of tradingNikkei falls 0.22% in first 15 minutes of trading
Justin McCurryJustin McCurry
And the Guardian’s Justin McCurry sends this from Tokyo:And the Guardian’s Justin McCurry sends this from Tokyo:
More volatility has hit Japanese stocks this morning, after further losses on Wall Street, a rate cut by China’s central bank and a rebound in European stocks.More volatility has hit Japanese stocks this morning, after further losses on Wall Street, a rate cut by China’s central bank and a rebound in European stocks.
In the first 15 minutes of trading in Tokyo, the Nikkei fell 39.6 points, or 0.22%, following a drop of nearly 4% on Tuesday.In the first 15 minutes of trading in Tokyo, the Nikkei fell 39.6 points, or 0.22%, following a drop of nearly 4% on Tuesday.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 2.83 points, or 0.20%, with insurance firms, banks and the retail sector among those starting the day on an upward curve.The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 2.83 points, or 0.20%, with insurance firms, banks and the retail sector among those starting the day on an upward curve.
1.51am BST01:511.51am BST01:51
Tom PhillipsTom Phillips
My colleague Tom Phillips sends this update from Beijing:My colleague Tom Phillips sends this update from Beijing:
This what China’s Global Times newspaper has to say this morning about the country’s week of stock market chaos and what it tells us about the wider economy.This what China’s Global Times newspaper has to say this morning about the country’s week of stock market chaos and what it tells us about the wider economy.
The Communist party-controlled paper dismissed foreign doomsayers who are warning of a major financial slowdown here:The Communist party-controlled paper dismissed foreign doomsayers who are warning of a major financial slowdown here:
The Asian stock market followed the fall of the Chinese stock market on Monday, but surged yesterday. This shows that the outside came to realise that the Chinese stock market and the economy are not closely related.The Asian stock market followed the fall of the Chinese stock market on Monday, but surged yesterday. This shows that the outside came to realise that the Chinese stock market and the economy are not closely related.
The crash has made many people lose heart, but a severe financial or social impact may not come soon.The crash has made many people lose heart, but a severe financial or social impact may not come soon.
The economy won’t come to a halt. The driving forces for medium- and high-speed growth still exist, and new impetus for the economic boom has been injected into the economy through reforms.The economy won’t come to a halt. The driving forces for medium- and high-speed growth still exist, and new impetus for the economic boom has been injected into the economy through reforms.
1.44am BST01:441.44am BST01:44
Markets in Seoul are open, with the Korea Composite Stock Price Index (Kospi) dropping a little in the first 15 minutes of trading: down 0.45 points (0.02%) to 1,846.18.Markets in Seoul are open, with the Korea Composite Stock Price Index (Kospi) dropping a little in the first 15 minutes of trading: down 0.45 points (0.02%) to 1,846.18.
Samsung Electronics fell 1.48% and Shinhan Financial Group slid by 2.11%, the Yonhap news agency reports.Samsung Electronics fell 1.48% and Shinhan Financial Group slid by 2.11%, the Yonhap news agency reports.
But Hyundai Motor (+1.69%) and Kia Motors (+2.73%) were up.But Hyundai Motor (+1.69%) and Kia Motors (+2.73%) were up.
1.36am BST01:361.36am BST01:36
Opening summaryOpening summary
Claire PhippsClaire Phipps
With the Asian markets set to open shortly following days of turmoil, we will have live coverage here of the latest twists and turns.With the Asian markets set to open shortly following days of turmoil, we will have live coverage here of the latest twists and turns.
Tuesday saw world markets continue to seesaw after China’s Black Monday. As my colleague Dominic Rushe reports from New York:Tuesday saw world markets continue to seesaw after China’s Black Monday. As my colleague Dominic Rushe reports from New York:
The Dow Jones industrial average initially appeared to be bouncing back from “Black Monday” – a day when it crashed more than 1,000 points before ending the day down 586 points.The Dow Jones industrial average initially appeared to be bouncing back from “Black Monday” – a day when it crashed more than 1,000 points before ending the day down 586 points.
By noon the Dow was up over 300 points as European markets closed up and investors reacted positively to China’s decision to cut interest rates. But the Dow closed 205 points down, or 1.29%. The S&P 500 ended the day down 25 points, 1.34%, and the Nasdaq closed 0.39% down.By noon the Dow was up over 300 points as European markets closed up and investors reacted positively to China’s decision to cut interest rates. But the Dow closed 205 points down, or 1.29%. The S&P 500 ended the day down 25 points, 1.34%, and the Nasdaq closed 0.39% down.
The second day of drama came after investors continued to sell in China. The benchmark Shanghai composite index closed 7.6% lower on Tuesday following an 8.5% drop on Monday. Over three days the index has fallen 22%.The second day of drama came after investors continued to sell in China. The benchmark Shanghai composite index closed 7.6% lower on Tuesday following an 8.5% drop on Monday. Over three days the index has fallen 22%.
European markets reversed Monday’s losses but will be closely watched on Wednesday for reaction to the US news. In the UK, the FTSE 100 ended a 10-day losing streak to end up 3%, Germany’s Dax was up 5% and in France the CAC rose 4%.European markets reversed Monday’s losses but will be closely watched on Wednesday for reaction to the US news. In the UK, the FTSE 100 ended a 10-day losing streak to end up 3%, Germany’s Dax was up 5% and in France the CAC rose 4%.
Stay stuck to your screens for the latest news here; I’ll also tweet key developments @Claire_Phipps.Stay stuck to your screens for the latest news here; I’ll also tweet key developments @Claire_Phipps.
Related: US stock market gains wiped out to close second volatile day on Wall StreetRelated: US stock market gains wiped out to close second volatile day on Wall Street