Stocks open higher, led by gains in technology, energy

Shanghai stocks sank again Wednesday after early gains fuelled by an upbeat Chinese trade report were overshadowed by ongoing concerns about the world’s number two economy.

KEEPING SCORE: Germany’s DAX gained 1.2 percent and France’s CAC 40 rose 1.4 percent to 4,438.48 in early trading. However, interbank rates spiked for the offshore yuan, which is freely traded in Hong Kong, leading many to believe China’s central bank is intervening in the market in order to foil speculators trying to drive it lower.

That followed an extraordinary 24 hours in Hong Kong money markets, which saw the return for depositing the yuan soar, first to around 40 percent on Monday, and then 94 percent on Tuesday – although some dealers said there had been trades between banks at even higher rates.

On Wall Street, stocks ended Tuesday’s session with solid gains after China stepped up efforts to bolster its currency and oil prices recovered from day’s lows.

ASIA’S DAY: Though Chinese stocks steadied, other Asian markets suffered as Japanese traders returned from holiday and responded to the recent downtrend.

The Philippine Stock Exchange Index rallied 0.7 per cent after slumping 4.4 per cent yesterday and entering a bear market. Another slide in crude oil prices pulled down energy stocks. The Standard & Poor’s 500 index rose 13 points, or 0.7 percent, to 1,937.

The Hang Seng China Enterprises Index of mainland equities listed in Hong Kong declined 0.8 per cent after falling to the lowest level since 2011 yesterday.

In US dollar terms, exports fell by 1.4% from a year earlier, beating expectations for a contraction of 8.0%.

Dubai’s DFM General Index shed 2.3 per cent to lead Persian Gulf equities lower and Russia’s Micex Index headed towards a three-month low as Brent crude fell for a seventh day to the cheapest since 2004.

The rise in overseas shipments, from a fall in November, indicated authorities’ weakening of the yuan currency against the dollar was beginning to filter through. The country’s benchmark Nikkei 225 fell 2.7 percent to close at 17,218.96.

“Pan’s appointment shouldn’t have too much of an impact because SAFE is more a management body rather than a decision-making body”, said Zhou Hao, senior emerging markets economist for Asia at Commerzbank AG, adding SAFE’s purview is focused on managing capital inflows and outflows, selling and buying FX, bank regulation and management of FX reserves.

Domestic equity markets started positively in the morning, clocking up gains of around 1.2 percent, but went sharply into reverse in the afternoon.

Soon after opening Wednesday London rose 1.1 percent, Frankfurt gained 1.3 percent and Paris jumped 1.1 percent. South Korea’s Kospi added 1.3 percent to 1,916.28.

With the sharp losses, US crude futures fell below $30 a barrel for the first time since December, 2003.

CURRENCIES: Trading in currency markets was fairly tepid with the euro down 0.1 percent at $1.0852 while the dollar was unchanged at 117.77 yen.