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China: Stocks rise, central bank weakens expectations of further yuan slide
[SHANGHAI] China stocks reversed early losses and rose more than 1 per cent on Thursday, after the central bank said that there was no basis for further depreciation in the yuan given strong economic fundamentals.
Following a volatile session, the CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 1.5 per cent, to 4,075.46, while the Shanghai Composite Index gained 1.8 per cent, to 3,954.56 points.
The People's Bank of China, which sharply devalued the yuan earlier in the week, said on Thursday that China's strong economic environment, sustained trade surplus, sound fiscal position and deep foreign exchange reserves provided "strong support" to the exchange rate.
Airline operators rebounded, after tumbling over the past two days amid fears that a weaker currency would hurt the bottom lines of Chinese carriers, which typically have heavy debt denominated in hard currencies.
China Eastern, China Southern and Air China all rose.
But shares of companies with businesses concentrated in Tianjin's Binhai economic development zone fell, after massive explosions caused by flammable goods ripped through an industrial area in the northeast Chinese port city Tianjin Port Holdings Co and Tianjin Economic-technological Development Area Ltd ended Thursday lower, despite gains in the broader market.