Global stocks, Asian currencies fall as China devalues yuan

BEIJING — Global stocks and Asian currencies fell Tuesday after China unexpectedly devalued the yuan in response to weakening trade and growth.

KEEPING SCORE: France's CAC-40 fell 1.1 percent to 5,139.56 and Germany's DAX lost 1.6 percent to 11,424.76. Britain's FTSE 100 shed 0.7 percent to 6,687.13. Wall Street looked set to give up some of the previous day's gains. The future for the Dow Jones industrial average fell 0.5 percent while S&P 500 futures eased 0.4 percent.

CHINA'S DEVALUATION: Beijing's devaluation of the yuan allowed it to fall by its biggest one-day margin in a decade. The central bank said the 1.9 percent fall was due to changes aimed at making the way it sets exchange rates more market-oriented. In recent months, the yuan has strengthened along with the U.S. dollar as currencies of other developing countries weakened, hurting Chinese exporters. Exports fell by an unexpectedly large 8.3 percent in July. The People's Bank of China said market forces would be given a bigger role in setting the exchange rate, leaving open the possibility of more declines.

ASIA'S DAY: Tokyo's Nikkei 225 lost 0.4 percent to 20,720.75 and Seoul's Kospi was off 0.8 percent at 1,986.65. The Shanghai Composite Index ended little changed at 3,927.91 and Hong Kong's Hang Seng declined 0.1 percent to 24,498.21. Sydney's S&P/ASX 200 lost 0.7 percent to 5,473.20 and India's Sensex shed 0.7 percent to 27,942.70. Singapore, Bangkok and Jakarta also retreated.

THE QUOTE: China's yuan announcement "looks to be a move to a more open market policy," said Stephen Innes, senior trader at OANDA. "Traders are looking for U.S. dollar strength across the Asia region and pressure on all local currencies," he said. "The market is extremely volatile at moment."

CURRENCIES: The dollar gained to 124.95 yen from Monday's 124.55 yen. The Australian dollar sank 1.3 percent to $0.7321. The U.S. dollar also gained against a raft of Asian currencies including a 0.5 percent rise against the Indian rupee and a 1.8 percent jump against the South Korean won. The euro rose to $1.1037 from $1.1021.

GREECE DEAL: Greece says it has reached an agreement with its international creditors on the broad terms of a new bailout deal. The news pushed up Greek markets, with the stock index up 2 percent and the 2-year bond yield sliding over 4 percentage points — an indication investors are less worried about a default. Officials expect the deal to be finalized Tuesday.

ENERGY: Benchmark U.S. crude fell 80 cents to $44.16 per barrel in electronic trading on the New York Mercantile Exchange. The contract jumped $1.09 to $44.96 on Monday.