Charting the Markets: China Respite Over

ASTANA. KAZINFORM China is back. Local markets re-opened after holidays on Thursday and Friday to commemorate the end of World War II. The rout in Chinese equities is close to ending. At least that's the view of People's Bank of China Governor Zhou Xiaochuan, who issued a statement at the G-20 summit in Ankara over the weekend. He also said that state intervention prevented systemic risk and stopped a free-fall. His words had a mixed effect on markets. Asian stocks dropped. European equities bounced back from the third weekly decline in four. Appetite for risk lifted the Norwegian krone, as well as the Australian and Canadian dollars.

Chinese stocks slid as the world's gaze returned to the world's second-largest economy. Comments from the PBOC governor failed to produce a gain in the Shanghai Composite Index. The benchmark is close to entering a death cross, when the 50-day moving average crosses below the 200-day moving average. That is a bearish sign and could signal further declines. The index has already slumped 22 percent since China devalued the yuan. It's trading 40 percent below the record set on June 12th. Attention now turns to Tuesday's trade data, which may show another weakening in exports.

Losses in Asian stocks show no signs of abating. The MSCI Asia Pacific Index fell as much as 1 percent, dropping to its lowest since November 2012. The equity gauge is on track for its eighth weekly decline, the longest stretch of losses in 23 years. Along with fears about the Chinese economy, investors are no wiser on when the Federal Reserve will raise interest rates after a mixed U.S. jobs report on Friday. The U.S. central bank meets on Sept. 16- 17 and could result in the first rate hike since 2006. The industry that's been hit the hardest by China's currency devaluation is mining, as investors fret about reduced appetite for commodities. The Stoxx Europe 600 Basic Resource Index has slumped 17 percent in a little over three weeks. The worst performer has been Glencore, which has sunk 40 percent since Aug. 11. Today it jumped as much as 13 percent after announcing plans to sell assets and shares to cut its $30 billion debt pile. The commodity producer and trader will also suspend dividend payments as it plans to slash net debt by about $10.2 billion. Last week, Glencore shares had their biggest weekly drop since the company listed in 2011. Today's advance was the biggest ever, Kazinform refers to Bloomberg.