It was another chaotic session for Asian markets on Friday with equities, commodities and currencies all swingly wildly in line with movements in Chinese stocks.
Up 3%, down 2% and then back higher again. That’s not an exaggeration, it’s the actual description of the first 15 minutes of trade on the benchmark Shanghai Composite index today.
The chart below reveals the percentage change in the benchmark Shanghai Composite index over the session. Eventually it closed with a gain of 1.98%, the largest in percentage terms since December 14 last year.
China’s so-called “national team” – a collective group of state-backed financial firms tasked with supporting Chinese stocks when they come under pressure – were likely active in the market today.
Still, it was another white-knuckled ride for investors, continuing the pattern seen in recent days.
Earlier in the session risk assets across the region were buoyed by a surprise strengthening in the Chinese yuan. The PBOC, China’s central bank, fixed the USD/CNY rate for Friday at 6.5636, below Thursday’s starting level of 6.5646 and the last traded price of 6.5929 seen overnight in Europe.
A lower figure indicates that the yuan has strengthened against the US dollar.
USD/CNH – offshore traded yuan – initially fell heavily on the news, helping to support risk assets as a consequence. Like the stock market, it too endured a wild session of trade, falling to as low as 6.6535 before screeching back to above 6.6800 in the latter parts of trade.
There were rumours that the PBOC, through state-backed banks, were actively intervening to support the yuan through the session.
This was further strengthened by reports that China’s foreign exchange regulator, SAFE, ordered banks in some trading hubs to limit dollar purchases in an attempt to limit capital outflows from the nation.
However, despite the strength seen in Chinese markets, initial gains in currencies, commodities and stocks were slowly whittled away, or reversed, over the course of the session.
Here’s the final Asia market scoreboard as at 6.05pm AEDT.
- ASX 200 4990.84 , -19.50 , -0.39%
- Nikkei 225 17697.96 , -69.38 , -0.39%
- Shanghai Composite 3186.78 , 61.77 , 1.98%
- Hang Seng 20509.31 , 175.97 , 0.87%
- KOSPI 1917.62 , 13.29 , 0.70%
- Straits Times 2752.15 , 22.24 , 0.81%
- S&P 500 Futures 1952.75 , 19.75 , 1.02%
- USD/JPY 118.46 , 0.80 , 0.68%
- USD/CNY 6.5875 , -0.0051 , -0.08%
- AUD/USD 0.7056 , 0.0047 , 0.67%
- NZD/USD 0.6658 , 0.0033 , 0.50%
- AUD/JPY 83.59 , 1.12 , 1.36%
- EUR/USD 1.0858 , -0.0076 , -0.70%
- GBP/USD 1.4603 , -0.0012 , -0.08%
- USD INDEX 98.768 , 0.5490 , 0.56%
- Gold $1,101.80 , -$7.30 , -0.66%
- Silver $14.17 , -$0.14 , -0.94%
- WTI Futures $33.98 , $0.71 , 2.13%
- Copper Futures ¥35,990 , -¥390 -1.07%
- Iron Ore Futures ¥312.50 , -¥7.50 , -2.34%
10-Year Bond Yields
- Australia 2.785%
- New Zealand 3.420%
- Japan 0.231%
- Germany 0.538%
- UK 1.796%
- US 2.175%
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