Asian equity benchmarks are trading down in the early deals on Thursday after China opted to keep guiding the yuan sharply lower, deepening concerns about the economy and the potential for competitive devaluations by other countries. The overnight fall in crude oil prices to eleven-year lows also increased risk aversion. Shanghai shares tanked more than 7 per cent and trading was halted as the fall triggered a circuit breaker, despite recent supportive measures announced by Chinese authorities. Meanwhile, Japanese stocks fell after China's central bank weakened the yuan - sparking a sharp strengthening of the yen, hurting exporters and tarnishing sentiment in a market already on edge over geopolitical tensions and signs that China's economy is slowing.
Nikkei 225 dipped 318.24 points or 1.75% to 17,873.08, Hang Seng dropped 501.42 points or 2.39% to 20,479.39, Straits Times declined 57.42 points or 2.05% to 2,746.85, Taiwan Weighted decreased 190.66 points or 2.39% to 7,799.73, KOSPI Index slipped 15.06 points or 0.78% to 1,910.37, Shanghai Composite contracted 245.96 points or 7.32% to 3,115.89, Jakarta Composite crumbled 45.01 points or 0.98% to 4,563.97, and FTSE Bursa Malaysia KLCI was down by 5.70 points or 0.34% to 1,662.27.