Markets tumble, China's forex reserves see record fall

The renminbi devaluation and Chinese stock market trading halt on Thursday sent global markets tumbling again.

The S&P 500 fell 2.4 percent, the STOXX Europe 600 fell 2.2 percent and the MSCI Asia Pacific Index fell 2.1 percent.

The MSCI All-Country World Index fell for a fourth day, bringing its slide so far this year to 5.2 percent, its worst start to a year in records back to 1998.

Yields on US 10-year Treasury notes fell two basis points to 2.15 percent, crude oil settled at a 12-year low and copper dipped below $2 for the first time since 2009.

However, Chinese stocks managed to rally in early Friday trading after the People’s Bank of China set the renminbi's midpoint rate at 6.5636 yuan per dollar, slightly firmer than the previous fix of 6.5646, the first time in nine trading days that the central bank had strengthened its official rate.

Still, further weakening of the renminbi cannot be ruled out, especially after a report on Thursday showed that China's foreign exchange reserves fell $107.9 billion in December to $3.33 trillion, the biggest monthly drop on record.