Feb 15, 2016 (LBO) – China’s stocks opened 1.9 percent lower after a week-long holiday during which global equities entered a bear market.
The yuan gained 0.9 percent in Shanghai after the central bank strengthened the currency’s reference rate by the most in three months. The Nikkei was up 4.8 percent on Monday and Hang Seng up 2.3 percent, bucking the equities trend, on chances the equities decline last week was excessive.
China’s stocks have plunged 22 percent this year on fears of an economic slowdown. China is targeting economy growth of 6.5 percent to 7 percent for this year, after recording 6.9 percent growth in 2015 that was the slowest in 25 years.
Governor of the People’s Bank of China Zhou Xiaochuan broke his long silence over the weekend to say there’s no basis for continued yuan depreciation.
The MSCI world index entered bear-market territory for the first time in more than four years on Thursday last week.
The index slipped 1.3 percent, pushing its decline since May to 20 percent and marking the biggest retreat since Europe’s sovereign debt crisis in 2011. Every industry has fallen with decreases exceeding 25 percent in financial stocks and 30 percent in energy and commodities.
The MSCI gauge fell more than 24 percent between May and October of 2011 as Europe sovereign crisis raged and S&P stripped the U.S. of its AAA credit rating.