Overseas Trading: PBOC Fails to Rescue Sinking China Stocks

The People's Bank of China (PBOC) injected 360 million yuan into money markets, but it couldn't stop the bleeding

Jan 26, 2016 at 8:36 AM

An overnight sell-off in crude took a heavy toll on Asian stocks, exacerbated by uncertainty ahead of the Fed's two-day policy meeting, which kicks off today. By day's end, China's Shanghai Composite had plummeted 6.4% and given back Monday's gains, despite the People's Bank of China (PBoC) injecting 360 million yuan into money markets. This was index's biggest single-day percentage loss since Jan. 7 -- the day before regulators abandoned the "circuit breaker" mechanism.

Elsewhere, a two-day hot streak was halted on Japan's Nikkei, with auto parts makers helping lead the index to a 2.4% loss, while South Korea's Kospi fell 1.2% on downbeat gross domestic product (GDP) data. Rounding things out, Hong Kong's Hang Seng plunged 2.5%.

A rebound in the price of oil is helping European markets come back from heavier losses earlier, with mining stocks muscling into positive territory. At last check, London's FTSE 100 and France's CAC 40 are off 0.4% and 0.1%, respectively, while the German DAX has edged 0.1% higher.

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