Steel makers tumble after yuan devaluation

Shares of five steel makers fell by 0.45% to 4.06% at 13:33 IST on BSE after China's central bank moved to devalue its tightly controlled currency, stoking fears of Chinese exports becoming cheaper.

Steel Authority of India (down 4.06%), Tata Steel (down 3.41%), JSW Steel (down 2.22%), Bhushan Steel (down 2.18%) and Hindustan Zinc (down 0.45%), edged lower. Jindal Steel & Power was up 1.71%.

The S&P BSE Sensex was down 150.64 points, or 0.54% at 27,951.08.

A devalued currency will make Chinese exports cheaper. Dumping of cheaper steel products by China will hurt the Indian steel industry. The devaluation will also impact India's exports to China as a weaker yuan makes resources more expensive to Chinese buyers.

China's central bank today, 11 August 2015, lowered the value of the yuan by changing the way in which it calculates the yuan's daily midpoint against the US dollar. The latest move from the Chinese central bank resulted in the yuan weakening by 1.9% at 6.2298. The devaluation of the currency comes after trade data at the weekend showed Chinese exports sank 8.3% in July.

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