In the wake of China stocks plummeting to a six-month low, China-related ETFs in the U.S. saw a decline in pre-market trading on Tuesday.
What Happened: Despite an overall regional relief rally, China stocks suffered a blow on Tuesday, causing the yuan to ease from Monday’s seven-month high against the dollar, Reuters reported. This shift challenges the view of Chinese assets as a haven amid global market turmoil.
ETFs such as KraneShares CSI China Internet ETF KWEB and iShares MSCI China ETF MCHI saw a decrease of 0.27% and 0.81% respectively in trading. The iShares China Large-Cap ETF FXI also experienced a 1.16% decline.
China’s long-term yields surged due to concerns of government-led bond selling to cool down a heated rally, rather than a positive economic outlook. The blue-chip CSI 300 Index ended the session flat, hitting its lowest since February. The Shanghai Composite Index closed up 0.2%, while Hong Kong’s Hang Seng closed down 0.3%.
Why It Matters: On Monday, U.S. stock markets closed significantly lower, with the Nasdaq and S&P 500 each falling over 3%. This was a continuation of the previous week’s sell-off, driven by fears of weak economic data and a soft U.S. payrolls report.
However, the U.S. stocks look to bounce back on Tuesday. In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust SPY gained 0.78% to $521.40, and the Invesco QQQ ETF QQQ rose 0.82% to $438.95, according to Benzinga Pro data. The Japanese market, which was the epicenter of Monday's sell-off, rebounded strongly, with the Nikkei 225 average climbing over 10%. The Taiwanese and South Korean markets also rose notably.
Read Next:
Image via Shutterstock
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
