CHINA MARKETS: Yuan Weaker; Rates Lower; Stocks Down

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

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

     The yuan was last at 6.5969 against the U.S. unit, compared with the

official closing price of 6.5887 on Wednesday. 

     The PBOC set the yuan central parity rate against the U.S. dollar at 6.5808

on Thursday, stronger than Wednesday's 6.5841 and the third consecutive day the

PBOC has set a stronger fixing. 

     Money market rates fell Thursday morning after the PBOC drained CNY40

billion in liquidity via open-market operations. It was the first drain after

two straight days of liquidity injections -- CNY20 billion on Wednesday and

CNY40 billion on Tuesday. The seven-day repo average was last at 2.7983% on

Thursday, lower than Wednesday's average of 2.8939%. The overnight repo average

was at 2.5998%, lower than Wednesday's 2.7236%.

     The yield on benchmark 10-year China government bonds was last at 3.6020%,

up from the previous close of 3.5617%, according to Wind, a financial data

provider. 

     Stocks were down, led lower by the property management and coal-mining

sectors. The benchmark Shanghai Composite Index was last down 0.14% at 3,383.58.

Hong Kong's Hang Seng Index was 0.16% higher at 28,435.85. 

--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$]