By Christopher Whittall
China's devaluation of its currency sent global stocks lower
Tuesday, hitting the shares of some exporting companies
particularly hard.
A weaker yuan could hurt the competitiveness of firms outside
China by making their goods and services relatively more
expensive.
Luxury goods firms and car makers, which are highly sensitive to
Chinese demand, came under the most intense pressure.
In Europe, shares in LVMH Moët Hennessy Louis Vuitton SE and
Gucci-owner Kering SA fell more than 3%. Porsche Automobil Holding
SE and BMW AG both lost more than 4%, dragging Germany's
export-heavy DAX index to a 1.7% decline.
The pan-European Stoxx Europe 600 index was down 1.0% late
morning.
U.S. stock futures indicated a 0.6% opening decline for the
S&P 500. Changes in futures aren't necessarily reflected in
market moves after the opening bell.
Chris Jefferies, an asset-allocation strategist at Legal &
General Investment Management, said the selloff is being driven by
worries about what China's devaluation of the yuan "means for the
competitiveness of the West versus the East."
Most Asian bourses fell and currencies sank in response to the
People's Bank of China's move as the world's second-largest economy
sags.
Japan's Nikkei 225 index fell 0.4%. The Shanghai Composite Index
was flat.
The devaluation of the yuan "represents a long overdue, albeit
partial, fightback in the global currency wars that have sapped
China's competitiveness," said Richard Iley, an economist at BNP
Paribas SA.
Athens stocks bucked the trend after apparent progress toward a
third bailout for Greece.
The Athex Composite index was 1.8% higher. Greek stocks saw some
of the largest gains in Europe, with National Bank of Greece SA up
7.9% and Hellenic Telecommunications Organization SA up 3.1%.
Greece and its international creditors reached an agreement to
provide the country with a bailout worth as much as EUR86 billion
($94.4 billion), but some details remained unresolved, a Greek
government official said. However, it wasn't immediately clear
whether the creditors agreed the deal was complete.
In currency markets, the euro was steady against the U.S. dollar
at $1.1023. The Japanese yen fell 0.2% against the buck.
Brent crude oil fell 1.1% to $49.84 a barrel. Gold rose 0.7% to
$1,112.10 a troy ounce.
Tommy Stubbington contributed to this article.
Write to Christopher Whittall at
christopher.whittall@wsj.com