Shanghai down 6% on Yuan fears and flight to safety

Shanghai down 6% on Yuan fears and flight to safety

Tue, Aug 18 2015,



FXStreet (Mumbai) - Chinese stock markets extended losses to trade at more than one-week low as CNY fears and the bomb explosion in Thailand triggered a flight to safety.

Equities slide as CNY weakens

The Shanghai Composite index extended losses to trade 6% lower at 3753.55 levels. The positive action on the Wall Street failed to cheer the Chinese and other Asian equity markets. The People's Bank of China (PBOC) set the midpoint rate at 6.3966 per dollar, firmer than the previous fix of 6.3969, however, the Yuan eventually slid 0.2% against the USD to 6.4086.

The Chinese markets have turned risk averse as the CNY move largely reflects the struggling domestic economy. Though the volatility has been curbed, the CNY fall is likely to have triggered capital flight out of the Chinese property market.

Property shares were moderately lower in the afternoon session, while the utilities and industrial sectors were among the hardest-hit during the 6% fall seen on Tuesday.