MNI CHINA MARKETS: Yuan Strengthens; Rates Down; Stocks Down

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

even though the People's Bank of China set a weaker fixing for the day.

     The yuan was last at 6.6129 against the U.S. unit, stronger than the

official closing price of 6.6187 on Monday. The yuan opened at 6.6150 on Tuesday

morning. 

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

U.S. dollar weaker at 6.6113 on Tuesday, compared with Monday's 6.6105. The PBOC

has set the fixing weaker for seven consecutive trading days, with today's

fixing the weakest since Nov. 22.

     Money market rates fell even though the People's Bank of China drained a

net CNY170 billion by skipping its open market operations for the day. The

seven-day repo average was last at 2.7373%, lower than Monday's average of

2.7743%. The overnight repo average was at 2.5426%, also lower than Monday's

2.5616%.

     The yield on benchmark 10-year China government bonds was last at 3.8750%,

down from the previous close of 3.8950%, according to Wind, a financial data

provider. 

     Stocks fell, dragged down by the steel sector in the morning session, with

the benchmark Shanghai Composite Index 0.02% lower at 3,309.05. Hong Kong's Hang

Seng Index was 0.45% lower at 29,007.39.

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

--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com

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