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Having been outperformed by their larger peers earlier in the session, small-cap stocks roared higher in afternoon trade, with the CSI 500, Shenzhen Composite, and tech-heavy ChiNext indices all finishing with gains in excess of 2%.

Discussions of economic issues in policy circles often suffer from a “which way is up?” dilemma; it’s not clear what the problem is that needs to be solved.

Some participants also discussed the risk that a possible divergence in interest rates in the United States and overseas might lead to further appreciation of the dollar, extending the downward pressure on commodity prices and the weakness in net exports.

A cheaper yuan is expected to aid exports for the world’s second-largest economy but also underlined concerns about the current status of the Chinese economy.

“Only the “national team”… would be able to turn the tide like this”, said Yingda Securities analyst Li Daxiao, referring to entities acting for the government.

On its part, China has increased its presence on the continent funding major infrastructure projects in a number of Sub-Saharan Africa countries as it sort to gain a upper hand in deals that involve raw material for its fast growing industries back home.

U.S. gold for December delivery rose 0.4 percent to $1,117.30 an ounce.

In an effort to calm volatile markets, the PBOC said late last week it sees no reason for the yuan to fall further. Commonwealth Bank currency strategist Richard Grace said the Australian dollar will come under pressure from the lower yuan, as well as from factors such as lower...

What does it mean for those companies dependent on China?

With foreign exchange reserves of around $3.65 trillion, China has plenty of scope to sell dollars and shore up its own currency.

After China’s surprise devaluation of the yuan, U.S. financial markets have slightly pushed rate hike expectations to December. Neither of these has reached a satisfactory level by Fed measures.

The most active gold contract for December delivery gained $10 (0.91 percent) to settle at $1,104.10 per ounce, Xinhua reported.

The Federal Reserve is expected to raise its key interest rate next month for the first time in nearly a decade.

Gold steadied not far above a 5-1/2-year low on Monday, with a firm dollar after solid US job gains in July suggesting that the Federal Reserve could raise interest rates as early as next month. On Friday, the dollar rose as high as US$0.9885, its loftiest peaks since late March....

Oil prices remained under pressure on worries about oversupply and weak global demand, but gold bucked the trend although by not enough to see the precious metal avoid its longest weekly losing streak since 1999.