Chinese stocks fell on Monday as trading resumed after a week-long holiday, with investors'anxiety over the A-share market being weighted by volatile global markets over the past week.
The benchmark Shanghai Composite Index fell sharply, by 2.84 percent, in early morning trading before it managed to recoup some of the loss. The index was down by 1.57 percent to close at 2720.03 points for the noon break.
The fall of the A-share market came with the release of weak trade data for January. China's exports fell for the seventh consecutive month, by 6.6 percent year-on-year, in January, while imports contracted by 14.4 percent, according to official data.
On Monday, the People's Bank of China, the Chinese central bank, fixed the yuan's reference rate higher, at 6.5118 per dollar, highlighting the monetary authorities'desire to stabilize the currency and to better anchor market anticipation for the value of the yuan.
Tim Condon, chief Asia economist at ING Bank, said that China may tighten capital controls and adopt macro-prudential measures to free it to cut interest rates without having to worry about the yuan's depreciation pressure.
