Banks hit hard by yuan-linked stock rout

CHINA'S shock decision to devalue the yuan has sparked off turmoil in the currency market, led to fears of a currency war developing and sent stocks reeling.

The Straits Times Index (STI) spent the whole of Wednesday in the red before ending a nett 91.57 points or 2.9 per cent lower at 3,061.49, on a high volume of 1.8 billion units worth S$2.1 billion. Included in this was S$1.7 billion worth of volume done in the 30 STI components, which works out to 81 per cent of the whole market's business.

Banks were particularly badly hit, possibly because of concerns over their earnings from China ventures, while commodity trader Noble Group's shares suffered a S$0.065 or 11.4 per cent blow at S$0.505 on a volume of 165 million, making it the index's worst-performing component. DBS fell 5.5 per cent to S$18.64, UOB 4.2 per cent to S$19.98 and OCBC 5.8 per cent to S$9.50xd.