NZX opens down 1.3% after US hit by falling yuan

Tuesday, 6 August 2019, 11:06 am
Article: RNZ

The New Zealand share market has opened down 1.3 percent in the wake of Wall Street's worst day of the year.

Photo: Supplied / NZX

The NZX 50 index fell 130 points on opening with the top 50 board a sea of red in what is the worst single-session fall since early June.

The US had its worst day of trading for the year yesterday, with the Dow Jones index plunging 950 points at one point during the session.

It recovered some of its losses to finish down more than 760 points, close to 3 percent lower.

The broader S&P 500 was also down nearly 3 percent and the tech-heavy Nasdaq, down almost 3.5 percent.

The major sell-off came after China escalated its trade war with the US, allowing its currency, the yuan, to fall to its lowest level against the US dollar in a decade, making its exports more competitive.

China denies the move was intentional, but nevertheless it was viewed as retaliation against US President Donald Trump's threat to impose tariffs of 10 percent on and additional US$300bn of Chinese goods from 1 September.

Meanwhile, Beijing has fired a salvo on another front, putting a stop to companies buying US agricultural products, and it also warned it may impose further tariffs on recently-purchased US farm products.

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