China Stocks Head for Longest Weekly Losing Streak Since October

The currency was traded at around 6.57 to the dollar here Wednesday, on a par with Tuesday’s rate as well as that in the onshore Shanghai yuan market. U.S. West Texas Intermediate crude (WTI) rose $0.26 to $30.70 a barrel at 0108 ET.

Zhou Lin, analyst at Huaitai Securities, said it was just a matter of time before the indexes fell below that milestone.

The Shanghai Composite Index .SSEC ended down 2.4 percent, dipping below the 3,000 mark, while the CSI300 index .CSI300 shed 1.9 percent.

Australia’s S&P/ASX 200 and South Korea’s Kospi both gained 1.3%.

As for stocks, the Shanghai benchmark rebounded 2 percent as some investors bet that the lows hit during last summer’s rout would not be so easily breached.

Global markets enjoyed a relief rally on Wednesday, after Chinese trade data signalled that the wheels were not falling off the world’s second largest economy.

The People’s Bank of China (PBOC) set a slightly weaker mid-point rate for the yuan on Friday, but the fix has been broadly steady for more than a week, signalling a determination to hold the line against expectations of sustained depreciation.

CHINA DATA: China’s exports rose 2.3 per cent in December from a year earlier in yuan terms, reversing a 3.7 per cent drop in November, the Finance Ministry reported Wednesday.

The General Administration of Customs reported that exports fell 1.4% year over year, a much smaller decline that the 8% drop expected by Reuters’ consensus estimate and the 6.8% plunge in November.

This sharp contraction of trade of the Asian giant, to 24,590 billion yuan (3.740 billion dollars), contrasts sharply with the ambitious 6% increase that Beijing was aiming for, thus missing its target for the fourth consecutive year.

The data indicated that the Chinese economy may be stabilizing, easing fears over a China-led slowdown in global growth.

The central bank has also used aggressive intervention to engineer a huge leap in yuan borrowing rates in Hong Kong, essentially making it prohibitively expensive to short the currency.

The Yuan has long shadowed the US Dollar which rose significantly against other major currencies previous year, taking the Chinese currency with it. The hike in the relative value of the Yuan was enough to persuade the International Monetary Fund that it was no longer (so) undervalued, but this analysis overlooked the Yuan-Dollar pair.

China shares hovered near bear-market territory in Friday morning trading, extending an early-year selloff.