German Market Notably Lower Amid Yuan Impact
August 11, 2015 at 12:54
BERLIN (dpa-AFX) - The German market came under pressure on Tuesday, after China devalued yuan by the most in two decades to cushion its exports as the economy shows no solid signs of revival after the volatility in the stock market.
The bank set the value of yuan at 6.2298 a dollar, 1.9 percent lower than Monday's official fixing rate. This was the biggest one-day loss since 1994, when it unified official rate with market rates. Export stocks with exposure to China, mainly auto stocks and luxury goods, retreated in response to the move.
That said, investors also felt some relief after Greece early Tuesday reached an agreement with its creditors over the terms of the third bailout. There are minor details yet to be resolved.
The deal will likely unlock around 86 billion euros loans for Greece. The agreement has to be passed by parliament this week.
On the data front, German economic confidence deteriorated sharply to a nine-month low in August, survey data from the Mannheim-based Centre for European Economic Research or ZEW revealed.
The economic confidence index dropped unexpectedly by 4.7 points to 25 in August, the lowest score since November 2014. It was expected to rise to 31.9.
The Euro Stoxx 50 index of eurozone bluechip stocks lost around 1 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, was losing 0.78 percent.
The DAX index declined 1.7 percent.
Daimler and BMW declined 4 percent, while Volkswagen dropped 3.4 percent. Tire maker Continental lost 3.4 percent.
Manz declined more than 5 percent after reporting first-half results.
Deutsche Bank and Commerzbank were in negative territory.
Bucking the trend, Lufthansa and Lanxess made moderate gains.
Other markets in the region also fell.
The Asian stocks fell broadly as investors mulled the impact of China's abrupt devaluation of its currency on the global currency markets and the major economies, including the U.S., Europe and Japan.
In the U.S., futures point to a lower open on Wall Street. In the previous session, the Dow climbed 1.4 percent to end a seven-day losing streak, the tech-heavy Nasdaq gained 1.2 percent and the S&P 500 advanced 1.3 percent.
Crude for September delivery fell $0.36 to $44.60 per barrel, while December gold rose $8.9 to $1113.0 a troy ounce.
Copyright RTT News/dpa-AFX
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