China stocks hover in bear-market territory

The Shanghai Stock Exchange Composite Index lost 2.4% to 2,950 and the Shenzhen Stock Exchange Composite Index tumbled 3.5% to 1,791. Imports dropped an annual 4 percent in yuan terms, an improvement over the previous month’s 5.6-percent fall.

Crude oil imports in 2015 rose 8.8 percent to 334 million tonnes while that of iron ore climbed 2.2 percent to 953 million tonnes, GAC reported.

Traders said the offshore yuan weakened probably because of strong dollar demand, and expectations that the yuan would weaken going forward.

The Nasdaq rose 1.0 percent, the S&P 500 was up 0.8 percent and the Dow put on 0.7 percent, while London, Paris and Frankfurt all climbed one percent or more.

China’s total trade fell in December but far less than expected, with exports outperforming many of its regional peers after the country let the yuan depreciate sharply, highlighting fears of a currency war among Asia’s trade-reliant economies.

In economic data, the People’s Bank of China revealed that Chinese banks issued 597.8bn yuan ($90.7 billion) of new yuan loans in December, down from 708.9bn yuan in November and below the 700 billion yuan that was forecast. Both are down more than 16 percent for the year so far.

There is speculation in the options market that the city’s 32-year-old currency peg will end as investors lose confidence in Chinese assets.

China’s two stock exchanges said late on Wednesday that they have stepped up monitoring share selling activities by listed companies’ major shareholders, while the securities regulator reiterated that the transition toward a U.S.-style registration system for initial public offerings will not lead to a surge in IPOs. Overnight interest rates in Hong Kong, jacked up to 94 percent on Tuesday, were back near 4 percent.

Mr Ma Jun, chief economist at the PBOC’s research bureau, said this week downward pressure on the yuan will ease after investors absorb a shift to valuing it versus a basket of currencies and away from linking it to the dollar.

The Shanghai Composite Index sank as much as 2.8 per cent, falling more than 20 per cent from its December high and sinking below its closing low during the depths of a $US5 trillion rout in August.

USA figures for all of 2015 will not be published until February, but the volume of goods traded by the United States on the first eleven months of the year accounted for 3,480 billion dollars, according to figures from the U.S. government.