CHINA MARKETS: Yuan Stronger; Rates Down; Stocks Dip

     BEIJING (MNI) - The yuan rose against the U.S. dollar Wednesday morning

after the People's Bank of China set a stronger daily fixing. 

     The yuan was last at 6.5345 against the U.S. unit, compared with the

official closing price of 6.5516 on Tuesday. It has strengthened in three of the

last four trading days.

     The PBOC set the yuan central parity rate against the U.S. dollar at 6.5311

 on Wednesday, stronger than Tuesday's 6.5370. Today's fixing was the highest

since May 18 last year.

     Money market rates fell Wednesday morning after the PBOC drained CNY120

billion in liquidity via open-market operations. The seven-day repo average was

last at 2.7235% on Wednesday, lower than Tuesday's average of 2.7640%. The

overnight repo average was at 2.5834%, lower than Tuesday's 2.6080%.

     The yield on benchmark 10-year China government bonds was last at 3.6124%,

down from the previous close of 3.6298%, according to Wind, a financial data

provider. 

     Stocks were down, led lower by the papermaking and financial sectors. The

benchmark Shanghai Composite Index was last down 0.44% at 3,369.54. Hong Kong's

Hang Seng Index was 0.91% lower at 27,489.38.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com

[TOPICS: M$A$$$,M$Q$$$,M$$FI$,MN$FI$,MN$FX$]