Chinese Shares Fall 5% as Policy Confusion Remains

Chinese shares fell 5% to a three-month low after confusion about the direction of the Chinese currency caused wild gyrations on Asian stock markets.

A late rush of selling in Shanghai sent the CSI 300 index down 169 points to 3,192 points – its lowest since the aftermath of the summer crisis.

China guided the yuan slightly stronger for a second straight session on Monday in a move that appeared designed to calm concerns about a competitive devaluation, but only added to market confusion as to Beijing’s ultimate policy intent.

Monday’s fall in share prices followed a 10% plunge last week which triggered a global sell-off of riskier assets.

“Authorities are reluctant to let market forces rule, which along with their indecisiveness and lack of transparency is exacerbating uncertainty,” said Tapas Strickland, an economist at National Australia Bank.

“Understandably, amidst this global markets are selling Chinese policymakers’ ability to control their economy.”

via The Guardian

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza