News / Economy

    US Markets Mixed, While China Drags Down Asia

    An investor looks at an electronic screen showing stock information at brokerage house in Hangzhou, Zhejiang Province, China, Jan. 11, 2016.
    An investor looks at an electronic screen showing stock information at brokerage house in Hangzhou, Zhejiang Province, China, Jan. 11, 2016.
    Ken Bredemeier

    U.S. stocks were mixed Monday, trading in a narrow range with small gains and losses, while European markets edged lower and Asian markets tumbled as concerns grow about China's economy.

    In Asia, the Shanghai Composite Index plunged 5.3 percent, losing further ground after dropping 10 percent last week.  Trading was halted twice last week after heavy losses.

    Hong Kong lost 2.8 percent, Sydney shed 1.2 percent, Seoul slipped 1.2 percent, and the Philippines dropped 4.4 percent.

    Tokyo was closed for a public holiday, increasing market volatility.

    China's currency

    In a move that added to the market confusion, China set the midpoint for the yuan stronger (at 6.5626 per dollar), an apparent reversal of the midpoint's recent weakening trend.

    A couple walk past a display showing the security features of the new 100 Yuan note in Beijing, Monday, Jan. 11, 2016.
    A couple walk past a display showing the security features of the new 100 Yuan note in Beijing, Monday, Jan. 11, 2016.

    Analysts said the move could have calmed concerns about how ready China is to let the currency depreciate, but perceived missteps by Chinese authorities have led to doubts over Beijing's economic competence.

    "Authorities are reluctant to let market forces rule, which along with their indecisiveness and lack of transparency is exacerbating uncertainty," Tapas Strickland, an economist at National Australia Bank, told the Reuters news agency.  "Understandably, amidst this, global markets are selling Chinese policymaker's ability to control their economy."

    London lost 5.3 percent over the last week, Paris shed 6.5 percent and Frankfurt dropped 8.3 percent.

    Russian markets

    Meanwhile, Russia's national currency fell Monday, dropping nearly 2 percent in the first half hour of trading, to 76.1 rubles per dollar.  The market has been closed since a 10-day holiday break began December 31.

    People gather near a currency exchange office in Moscow, Russia, Jan. 11, 2016.
    People gather near a currency exchange office in Moscow, Russia, Jan. 11, 2016.

    Russia's economy is weighted heavily on oil prices, which fell to a 12-year low last week and dropped further on Monday.

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    by: Marcus Aurelius II from: NJ USA
    January 11, 2016 12:50 PM
    Everything in China is just fine. Just ask the government. 6.5% growth in GDP, right on target. Switching from an export driven economy to a service economy. Big Brother knows all and all is well. Just trust to his wisdom.

    If that were so, how come unless the government freezes the markets or intervenes trying to prop it up it keeps going down every session? Because the ordinary share holders who are inexperienced speculators know the real truth and are running for the exits while their shares are still worth more than the paper they're printed on. If the government buys up the entire market, China will be right back to where it started decades ago, a command economy. It's well on its way. It has made so many blunders already that there is no reason to believe it won't continue to make more of them. The world's largest economy or the world's largest bubble full of hot air that is escaping in a terminal collapse?

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