China’s exports grow for the 1st time since June

“Another large trade surplus provides a cushion for the People’s Bank of China in the face of soaring capital outflows”, Capital Economics’ Martin said.

The August low might have been lower still, had regulators not wheeled out a raft of measures to support the market, and some think Beijing would do the same again to stop the indexes breaching those levels.

The Hong Kong China Enterprises Index lost 1.9 percent to 8,331.41.

All of this was good news for the Australian dollar, often used as proxy for China because of Australia’s reliance on Chinese demand for raw materials. The Chinese bank regulator didn’t immediately return a call for comment. The currency has gained 2.5% this year, as investor rush to haven assets amid uncertainty about China.

If banks have stopped accepting loans as collateral “it will further tighten liquidity in the market and create panic selling”, said Steven Leung, director at UOB Kay Hian in Hong Kong.

Core orders, a leading indicator of business investment, fell 14.4% on month after seasonal adjustment. Worries over the future of the world’s number 2 economy have lain behind the big falls registered in stock markets around the world at the start of 2016. Meanwhile, Chinese banks remain wary of boosting lending to businesses. Shenzhen’s start-up board rose 0.7 percent, bucking the broader trend.

“This suggests that China may be less inclined to import USA dairy products, but the declining yuan should not hamper China’s appetite for dairy products from Europe and New Zealand”, she adds. Oil prices, which rose overnight, turned lower.

Yesterday US benchmark West Texas Intermediate and Brent crude both clambered back above $31 per barrel.

The energy sector in Australia gave up most of its early morning gains, with the S&P/ASX 200 roughly flat.

China’s central bank fixed the midpoint rate for the yuan at levels close to the fix of the previous two days, easing concerns over the rapid depreciation of the currency seen at the start of the year.

At 10am, offshore yuan (CNH) was trading at 6.5951, weaker by 0.46 per cent from Wednesday.

The rise in Chinese overseas shipments, from a fall in November, indicated authorities’ weakening of the yuan currency against the dollar was beginning to filter through. Currency traders shrugged off the central bank’s decision to hold monetary policy unchanged, signalling it would stand pat for some time although it cut this year’s economic growth forecast. The rupiah touched a one-week low after several explosions went off and gunfire broke out in Indonesia’s capital.