August 12, 2015 / 1:55 AM / in 2 years

China stocks fall as central bank allows yuan to fall further

SHANGHAI (Reuters) - China’s major stock indexes fell on Wednesday after the central bank allowed the yuan to fall for a second day, fueling concerns that a currency devaluation would make Chinese equities less attractive.

A clerk counts Chinese 100 yuan banknotes at a branch of China Construction Bank in Hai'an, Jiangsu province June 10, 2014. REUTERS/China Daily

The CSI300 index .CSI300 fell 0.9 percent to 4,030.72 points by 0131 GMT, while the Shanghai Composite Index .SSEC lost 1.1 percent to 3,886.01.

China CSI300 stock index futures CIFc1 for August fell 0.8 percent, to 3,983.4, 47.32 points below the current value of the underlying index.

The Hang Seng index .HSI in Hong Kong was down 1.5 percent to 24,129.18.

China shocked global markets on Tuesday by devaluing its currency after a run of poor economic data, a move it billed as a free-market reform but which some experts suspect could be the beginning of a longer-term slide in the exchange rate.

Some analysts say the move decreases the attractiveness of China’s stock market and would potentially trigger capital outflows.

The People's Bank of China set the midpoint rate CNY=SAEC at 6.3306 per dollar prior to the market open on Wednesday, 75 points weaker than previous day's market close of 6.3231.

That marks the weakest guidance rate for the currency since October 2012.

Reporting by Samuel Shen and Pete Sweeney; Editing by Kim Coghill

Our Standards:The Thomson Reuters Trust Principles.
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