Article by ForexTime
After days of turmoil in equity markets fuelled by China and growth concerns, markets appeared calmer on Friday.
There was a rebound in stocks in Shanghai and Tokyo markets also gained amid a sense of relief about Chinese economic conditions after the People’s Bank of China fixed the yuan higher against the US dollar.
China’s central Bank (PBOC) helped soothe markets by setting a stronger yuan midpoint rate against the dollar. The rate was set at 6.5636 per USD prior to the market open, firmer than both the previous fix and Thursday’s closing quote.
Meanwhile, the suspension of the circuit breaker and the stopping of the devaluation of the Yuan helped return some confidence in the markets. China announced late on Thursday it suspended its new stock market circuit breaker introduced only on Monday as the system failed to reduce market volatility, with some market players even saying it backfired.
The CSI300 index of major Shanghai and Shenzhen stocks was up 2.7 percent and the Shanghai Composite climbed 2.4 percent.
Shares in Asia were still on track for their biggest weekly fall in more than four months, but Friday’s advances seemed to reduce some of the fears that have hit global markets.
Free Reports:
Higher Chinese stocks also supported MSCI’s broadest index of Asia-Pacific shares outside Japan, which erased earlier losses to be up 0.6 percent. That put it on track for a loss this week of about 6 percent, which would be its biggest fall since August.
The U.S. dollar rose back to the 118 yen level Friday morning in Tokyo following its recent selloff as risk aversion helped lift safe havens like the yen.
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