China stocks start new week with another drop

A stock market plunge last summer and a messy currency devaluation that followed, had faded from global view.

Chinese shares have risen and European markets have opened slightly higher at the end of what has been a torrid first week of the year.

But regulators ditched the new measure, which halted trading for the day when stocks dropped 7% after only four days because of concerns it was fueling trading losses rather than reining them in.

Earlier on Thursday, the CSRC also introduced fresh restrictions on stock sales.

The benchmark Shanghai Composite Index more than doubled between late 2014 and June, then dived 30%.

A native New Yorker, he spent the first part of his career as a Payroll Manager but later turned his attention to his true passion, internet marketing and writing. CSI 300 index has shed 169 points to close down 5.03%.

“This is a downbeat headline, but not unexpected given the atrocious start to the year for equities”, said Pantheon Macroeconomics.

Asian stocks and currencies rallied on Friday. “Most investors also doubt China’s financial markets will stabilize anytime soon”.

“The market’s message was loud and clear that more clarity was needed on China’s transition towards a more market-determined exchange rate and an economy led by domestic demand”, it added.

Even after the latest declines, the Shanghai index is up 36% from October 2014.

South Korea’s won fell double the amount of the yuan last week, down more than 3 percent of the year.

Twice this week, plunging prices on the Shanghai Stock Exchange tripped a circuit breaker that switched the market off.

The remarks suggest the PBOC is trying to correct the impression that China intentionally weakened the yuan by setting the fixing lower last week. It reached a five-year low of 6.5956 last Thursday. The yuan has “limited” room for further depreciation as slumping energy prices will help boost the current-account surplus in China, the world’s second-largest importer of oil, and offset capital outflows, according to a Goldman Sachs Group Inc. report this week. Obama sought to lay the groundwork Friday for his a year ago in office by vowing not to fade in the background but instead use his remaining months to push longstanding goals to fruition.

Further, holders of yuan – companies and investors made up of China’s rising middle and wealthier classes – see the cost of foreign investments such as houses, land, companies, rising nearly daily in yuan terms.

Amplified volatility. On Monday, investors were concerned that major shareholders would sell with the expiration of the ban on Friday. Over the course of the week, the Dow lost 1,079 points, over six percent of its value.

“A weaker inflation outlook and heightened market volatility has also swung the pendulum back to more policy support”. “China’s stock market reform will remain a messy affair”. It seems as if Chinese investors are still nervous over last week’s selloff. They wanted to raise money for state companies to pay down heavy debt loads and become profit-oriented and competitive. The problem for investors is working out just how Beijing is now going about it.

Those plans went wrong when markets soared faster than Beijing wanted.

Asian stocks extended last week’s sell-off on Monday as muted inflation data out of China and sagging commodity prices continued to keep investors’ appetite in check.

The IMF has noted the widening of the spread between the onshore and offshore yuan rates, a spokesperson said in an e- mail reply to questions.