Hong Kong, June 27 (BNA): Asian stocks pared earlier losses on Tuesday, boosted by assurances that Beijing will prop up weak growth in the world’s second-largest economy.
The Chinese yuan also rose significantly as the central bank’s guidance sent a clear warning to traders that the authorities are becoming less tolerant of recent currency weakness, Reuters reported.
The shift in mood helped MSCI’s measure of Asia-Pacific stocks outside Japan extend its gains to 0.66%, with the Hang Seng and China’s CSI300 up 1.56% and 0.54% respectively by midday.
Li’s assurances come a day after Standard & Poor’s global agency cut its forecast for Chinese economic growth to 5.2% in 2023, down from a previous estimate of 5.5%.
It was the first time the global credit rating agency has lowered China’s outlook this year, tracking lower forecasts by major investment banks including Goldman Sachs.
The People’s Bank of China set the yuan’s midpoint rate at 7.2098 per US dollar before the market opened, weaker than the previous fix of 7.2056, but nearly 100 points stronger than the Reuters consensus estimate.
Dealers said state banks were seen selling dollars on Monday, ahead of an internal domestic shutdown to support the yuan’s closing rate.
ZH
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