Asia markets were largely positive in afternoon trade on Monday, with Greater China markets gaining following a move by China’s central bank to guide the management of the yuan, which analysts saw as a way to slow the yuan’s slide.
Hong Kong’s Hang Seng index rose by 2.18 percent as of 3:10 p.m. HK/SIN as all its major sectors rose, with services up by 3.21 percent.
Over on the mainland, the Shanghai composite was 1.89 percent up to close at 2,780.89 while the Shenzhen composite ended the trading day higher by 2.491 percent at 1,496.71.
The onshore Chinese yuan traded down against the dollar at 6.8163 at 3:24 p.m. HK/SIN after touching a high of 6.8052 earlier in the day. It’s offshore counterpart, which had also seen a prior high of 6.7806, traded largely flat against the greenback at 6.8080.
The gains come as the People’s Bank of China announced that it was tweaking its methodology for the fixing of the yuan’s daily midpoint in an effort to stabilize the currency market.
“China has been deliberately loosening its exchange rate over the last few months to deflect some of the trade issues” the country currently faces with the U.S., said Jim McCafferty, head of Asia ex-Japan research at Nomura Securities.
McCafferty added that he saw the latest move by the Chinese central bank as “a bit of appeasement” to the U.S., by letting the Chinese yuan “perhaps strengthen a little bit.”
In Australia, the ASX 200 was up by 0.35 percent to close at 6,268.9 after trading in negative territory earlier, as the heavily weighted financials sector ended the trading day up by 0.15 percent.
The moves Down Under came after a week of political turmoil which culminated in former Treasurer Scott Morrison emerging as the country’s sixth prime minister in the last decade.
Chief economist at the Australian Chamber of Commerce, said last week was “an absolute disaster as far as policy certainty is concerned.” “We crave certainty, our members crave certainty,” he added.