CHINA MARKETS: Yuan Stronger; Rates Mixed; Stocks Up

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

the People's Bank of China set a stronger daily fixing and the U.S dollar index

continued to fall. 

     The onshore yuan was last at 6.7206 against the U.S. unit, strengthening

0.12% compared with the official closing price of 6.7290 on Monday. The yuan

opened at 6.7170, the first time it has broken the 6.72 level since last Oct.

13. 

     The PBOC set the yuan central parity rate against the U.S. dollar at 6.7148

on Tuesday, compared with Monday's 6.7283. Tuesday's fixing was the highest

since 6.7098 on Oct. 11.

     The offshore yuan strengthened to 6.7211, the strongest interday rate since

Oct. 12, when it rose as high as 6.7178. 

     Money market rates were mixed in the morning session on Tuesday after the

PBOC made a net zero injection/drain for the day via its open-market operations.

     The seven-day repo average was last at 2.8120% Tuesday, higher than

Monday's average of 2.8025%. The overnight repo average was 2.7683%, lower than

the previous 2.8463%.

     The yield on benchmark 10-year China government bonds was last at 3.7602%,

down from the previous close of 3.8734%, according to Wind, a financial data

provider. 

     Stocks rose, led up by the military defense sector as President Xi Jinping

stressed the importance of military technology in a speech for the 90th

anniversary of People's Liberation Army. The benchmark Shanghai Composite Index

was up 0.40% to 3,286.05. Hong Kong's Hang Seng Index was 0.47% higher at

27,748.06

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

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

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