China stocks bounce back after day of global selloffs

Its stock was de-listed only two years after it made its debut on the Australian stock exchange.

Investors anxious about new signs of a slowdown in China and a flare-up in tensions between Saudi Arabia and Iran.

Analysts said the heightened geopolitical tensions in the Middle East sent traders scurrying from stocks to safe haven assets.

The Shenzhen Composite Index was down 0.53 per cent, or 11.23 points to 2,107.93, and the ChiNext Index was down 1.40 per cent, or 34.91 points to 2,455.33. The Shanghai Composite reversed into the red in the afternoon session, ending down 0.3 per cent at 3,287.71 points.

Overnight, China’s main index plunged almost 7 percent, triggering an emergency trading suspension.

As Chinese policymakers go all out to address the problem of inefficient and unprofitable “zombie enterprises”, it is expected that the world’s second-largest economy will make some real progress this year on the painful but necessary transition from investment-and export-led growth to more self-sustaining growth driven by consumption and innovation.

The sell orders piled up fast on Monday at Shenwan Hongyuan Group, China’s fifth-biggest brokerage by market value.

Before trading started, the People’s Bank of China set Tuesday’s yuan fix at 6.5169 against the dollar, compared with Monday’s fix of 6.5032, representing a 0.21 percent increase.

Shortly prior to market open, the China Securities Regulatory Commission published a statement saying it would continue to work to improve the circuit breaker mechanism that caused Chinese markets to halt trade on Tuesday.

A slump in whole milk powder prices in 2015 eroded New Zealand’s terms of trade, prompting interest rate cuts by the Reserve Bank.

China’s response to the summer market crash was seen by many inside the industry as heavy handed, as it included suppression of futures and derivatives markets and instilled fear as regulators pulled in brokerage executives for questioning about insider trading and “malicious short-selling”. South Korea’s Kospi rose 0.7 per cent and Hong Kong’s Hang Seng index gained 0.1 per cent, while Japan’s Nikkei Stock Average was up 0.3 per cent. Australia’s S & P/ASX 200 remained down 1 per cent. If the market then drops 7 percent, the market closes for the day. “If we’re being totally fair, the market is simply giving back some of the contrived Santa Claus gains we saw towards the end of previous year”. Brent crude, which is used to price Global oils, was little changed at $37.27 a barrel in London.

The euro EUR= fell 0.26 percent to $1.0830, while against the yen JPY=, the dollar fell 0.73 percent to 119.42.

In metals trading, gold rose $15 to $1,075.20 an ounce, silver lost 4 cents to $13.84 an ounce and copper fell six cents to $2.08 a pound.

The run from risk boosted US Treasuries where yields on 10-year notes dropped 3 basis points to 2.24 per cent.