Asian markets failed to start the new year on a positive note, with Chinese shares falling more than 3 per cent as the country’s central bank allowed the currency to weaken again and data underscored weakness in its manufacturing sector.
The People’s Bank of China set the reference rate around which the renminbi is allowed to trade weaker for a fifth straight session. The rate was “fixed” 0.2 per cent weaker at Rmb6.5032 per dollar this morning, the first time it has been allowed to depreciate beyond Rmb6.50 since May 24, 2011.
There was more disappointing data out on China’s manufacturing sector, with the privately-produced Caixin/Markit survey showing activity contracted in December. The index slipped to 48.2 last month, from 48.6 in November, and was weaker than economists expected.