Chinese stocks led declines in Asia, with the yuan falling to a four-month low as traders grappled with weak corporate guidance and signs that Beijing is relaxing its grip on the currency.
The onshore yuan’s drop breached a closely watched technical level after a months-long effort by Chinese authorities to keep the managed currency in a narrow range. The People’s Bank of China lowered the daily reference rate by the most since early February, a sign to some that Beijing is greenlighting more depreciation amid a bumpy economic recovery.
Contracts for US stocks were little changed in Asian trading after the S&P 500 index advanced 0.3% to a fresh high Thursday — its 20th of the year — led by gains in industrials and banks. Societe Generale SA increased its S&P 500 year-end forecast to 5 500 from 4,750 — the highest among strategists tracked by Bloomberg. “US exceptionalism is going from strength to strength,” wrote Manish Kabra, head of US equity strategy for the French bank. “Despite widespread market optimism, we view this as rational rather than excessive.”