On Tuesday, Alibaba Group Holding Ltd (NYSE:BABA)’s shares declined -3.18% to $61.87 as the yuan declined after the People’s Bank of China lowered its midpoint rate.
The People’s Bank of China lowered the midpoint rate by 0.07% to 6.3721 per dollar from 6.3676 per dollar before the market open, Reuters reports.
As China loosens its monetary policy, the U.S. central bank prepares to tighten its policy, noting that it anticipates raised borrowing costs in 2015, Bloomberg reports.
“A weaker fixing and the Fed members’ comments have pushed the yuan lower recently,” Kenix Lai, a foreign-exchange analyst at Bank of East Asia, told Bloomberg. “China’s economy is still going downhill and fundamentals are quite weak, which will keep pressuring the currency in the medium term.”
The onshore yuan in Shanghai, which can stray from the People Bank of China’s reference rate by 2% at most, fell in its biggest decline since September 9, Bloomberg noted.
Additionally, Chinese manufacturing data is due out on Wednesday and is predictable to show that factory output fell for a seventh successive month in September, according to Bloomberg.
Alibaba, based in Hangzhou, China, is engaged in online and mobile commerce through products, services and technology.
Alibaba Group Holding Limited, through its auxiliaries, operates as an online and mobile commerce company in the People’s Republic of China and internationally. It operates Taobao Marketplace, an online shopping destination; Tmall, a third-party platform for brands and retailers; Juhuasuan, a group buying marketplace; Alibaba.com, an online wholesale marketplace; Alitrip, an online travel booking platform; 1688.com, an online wholesale marketplace; and AliExpress, a consumer marketplace
Vale SA (ADR) (NYSE:VALE)’s shares dropped -5.73% to $4.77 as mining stocks were falling on concerns of weak demand in China and weakness in the Brazilian real.
“Until China demand and emerging-market currencies find a floor, it will remain challenging to put an absolute floor on commodity prices,” Credit Suisse analysts wrote in a note to investors Tuesday morning.
The analyst firm cut its earnings estimates for several mining companies due to weakness in the Chinese economy.
Standard & Poor’s recently cut its rating for Brazil’s debt to junk status due to the government’s inability to control its finance, the Journal said. Moody’s and Fitch still give the country investment-grade ratings, but analysts surveyed by the Journal believe either or both could soon downgrade Brazil.
Vale S.A., together with its auxiliaries, engages in the research, production, and sale of iron ore and pellets, nickel, fertilizer, copper, coal, manganese, ferroalloys, cobalt, platinum group metals, and precious metals in Brazil and internationally. Its Bulk Material segment produces and extracts iron ore and pellet.
At the end of Tuesday’s trade, Groupon Inc (NASDAQ:GRPN)‘s shares dipped -2.16% to $4.08.
Deal shopping website Groupon Inc GRPN declared that it will be cutting 1,100 jobs over the next year as part of a restructuring plan of its struggling international business. The 1,100 jobs amount to nearly 10% of the company’s total workforce, according to the Bloomberg.
While Groupon’s headquarters in Chicago will be safe, other sections of the company will not be so lucky. Most of the cuts will affect Groupon’s international deal-posting and customer service teams.
In addition to the loss of 1,100 jobs, the company also has plans to leave seven countries where business has not reached expectations. Those countries comprise Morocco, Panama, the Philippines, Puerto Rico, Taiwan, Thailand, and Uruguay. This list adds to the already deserted business operations in Turkey and Greece, in addition to the India unit, which Groupon gave up control of. Bloomberg Reports
In a blog post, Groupon sympathized, saying that “Let’s be clear: these are tough actions to take, especially when we believe we’re stronger than ever. We’re doing all we can to make these transitions as easy as possible, but it’s not easy to lose some great members of the Groupon family. Yet just as our business has evolved from a largely hand-managed daily deal site to a true ecommerce technology platform, our operational model has to evolve. Evolution is hard, but it’s a necessary part of our journey. It’s also part of our DNA as a company and is one of the things that will assist us realize our vision of creating the daily habit in local commerce.”
Groupon, Inc. operates online local commerce marketplaces that connect merchants to consumers by offering goods and services at a discount worldwide. It also offers deals on products for which it acts as the merchant of record.
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