Chinese shares slumped five per cent yesterday, hit by regulatory and industrial sector worries, but the declines did not carry through to other major equity markets.
The Shanghai Composite index and the CSI300 both saw their biggest one-day drops in more than three months on signs that the country’s securities regulator was clamping down anew on leveraged buying. China also reported a 4.6-per cent drop in profit among large industrial firms.
Wall Street was slightly weaker in what will be an abbreviated post-Thanksgiving session, with markets slated to close at 1 pm ET (1800 GMT).
Walt Disney Co led media stocks lower after the company said late Wednesday its ESPN subscriber base fell three per cent.
The Dow Jones industrial average fell 27.86 points, or 0.16 per cent, to 17,785.53, the S&P 500 lost 0.32 points, or 0.02 per cent, to 2,088.55 and the Nasdaq Composite added 4.85 points, or 0.09 per cent, to 5,120.99.
Europe was slightly weaker. Britain’s FTSE 100 was down 0.3 per cent, and France’s CAC40 and Germany’s DAX were both down 0.2 per cent.
The pan-regional FTSEurofirst 300 dipped 0.1 per cent.
The dollar hit a new eight-month high against a basket of currencies yesterday as speculation that both the Swiss National Bank and the European Central Bank will further cut deposit rates next week.
The Swiss franc fell to its lowest against the dollar since August 2010 and dropped more than half a per cent against the euro on speculation the Swiss National Bank will cut its rates even deeper into negative territory if the ECB moves.
China’s offshore yuan, or renminbi, fell to a two-month low of 6.4510.
The onshore yuan was lower as well on concerns about growth and a lack of clarity to its expected weighting in the IMF’s benchmark currency basket.
The slump in Shanghai stocks brought a 25-per cent rebound rally since late August to a halt and contributed the lion’s share of a 1.1 per cent weekly drop in MSCI’s broadest index of Asia-Pacific shares outside of Japan.
Spot yuan was changing hands at 6.3952, 56 pips weaker than the previous close and about 0.04 per cent away from People’s Bank of China’s midpoint rate of 6.3915.
Gold was near a six-year low and oil edged lower, though both US crude futures which were at $42.30 a barrel and Brent at $45.43 a barrel, were up roughly four per cent and one per cent respectively for the week.