Global Stocks Fall After Yuan Move -- 2nd Update

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 [e-mail]