China: Stocks fall as central bank allows yuan to fall further

[SHANGHAI] 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.

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

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

The Hang Seng index in Hong Kong was down 1.5 per cent 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 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.

REUTERS