CHINA MARKETS: Yuan Stronger; Rates Fall; Stocks Down

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

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

foreign-exchange sales in the market continued to increase as yuan appreciation

expectations climbed.

     The yuan was last at 6.6631 against the U.S. unit, 0.22% stronger than the

official closing price of 6.6776 on Wednesday. In the morning session, the yuan

jumped to as strong as 6.6520, the highest interday rate since Aug. 26, when it

rose to 6.5612. 

     The People's Bank of China set the yuan central parity rate against the

U.S. dollar much stronger at 6.6770 Thursday, 0.45% higher than Wednesday's

6.7075. Today's fixing was the highest since Sept. 29.

     Money market rates were down after the PBOC made a net injection of CNY30

billion for the day, the first net injection during open-market operations since

July 28. 

     The seven-day repo average was last at 2.8569%, lower than Wednesday's

average of 2.9242%. The overnight repo average was at 2.7713%, lower than

Wednesday's 2.8086%.

     The yield on benchmark 10-year China government bonds was last at 3.6353%,

down from the previous close of 3.6541%, according to Wind, a financial data

provider. 

     Stocks fell, led lower by the cement sector and shares of securities

companies. The benchmark Shanghai Composite Index was down 0.70% at 3,252.78.

Hong Kong's Hang Seng Index was 1.53% lower at 27,331.24.

--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@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$]