GLOBAL MARKETS-China stocks hit hard, rest of world shrugs

(Updates with additional information, changes quotes, recasts,
changes byline, dateline, previous LONDON)
* China shares see biggest weekly drop in more than 3 months
* Wall Street slips in subdued post-Thanksgiving trade
* Dollar up against euro, Swiss franc ahead of ECB, SNB next
week
* Onshore yuan declines as markets await IMF decision

By David Gaffen
NEW YORK, Nov 27 (Reuters) - Chinese shares slumped 5
percent on Friday, hit by regulatory and industrial sector
worries, but the declines did not carry through to other major
equity markets.
The Shanghai Composite index .SSEC and the CSI300
.CSI300 both saw their biggest one-day drops in more than
three months on signs that the country's securities regulator
was clamping down anew on leveraged buying. China also reported
a 4.6-percent drop in profit among large industrial firms.

Wall Street was slightly weaker in what will be an
abbreviated post-Thanksgiving session, with markets slated to
close at 1 p.m. ET (1800 GMT). Walt Disney Co
DIS.N led media stocks lower after the company said late
Wednesday its ESPN subscriber base fell 3 percent.
The Dow Jones industrial average .DJI fell 27.86 points,
or 0.16 percent, to 17,785.53, the S&P 500 .SPX lost 0.32
points, or 0.02 percent, to 2,088.55 and the Nasdaq Composite
.IXIC added 4.85 points, or 0.09 percent, to 5,120.99.
Europe was slightly weaker. Britain's FTSE 100 .FTSE was
down 0.3 percent, and France's CAC40 .FCHI and Germany's DAX
.GDAXI were both down 0.2 percent. The pan-regional
FTSEurofirst 300 dipped 0.1 percent.
The dollar hit a new eight-month high against a basket of
currencies .DXY on Friday as speculation that both the Swiss
National Bank and the European Central Bank will further cut
deposit rates next week.
The Swiss franc CHF= fell to its lowest against the dollar
since August 2010 and dropped more than half a percent against
the euro on speculation the Swiss National Bank will cut its
rates even deeper into negative territory if the ECB moves.
China's offshore yuan, or renminbi, fell to a two-month low
CNH=D3 of 6.4510. The onshore yuan was lower as well on
concerns about growth and a lack of clarity to its expected
weighting in the IMF's benchmark currency basket.
"There is clearly a risk that China will try and devalue the
currency further," said Ankit Gheedia, equity and derivative
strategist at BNP Paribas (PA:BNPP).
The slump in Shanghai stocks brought a 25-percent rebound
rally since late August to a halt and contributed the lion's
share of a 1.1 percent weekly drop in MSCI's broadest index of
Asia-Pacific shares outside of Japan .MIAPJ0000PUS .
Spot yuan CNY=CFXS was changing hands at 6.3952, 56 pips
weaker than the previous close and about 0.04 percent away from
People's Bank of China's midpoint rate of 6.3915.
"It's uncertain if the Chinese government is keen to show
the market influence in their rate setting or whether now that
they know they have gained special drawing rights inclusion they
are keen to weaken their overvalued currency knowing it will not
jeopardise their case," Angus Nicholson, market analyst at IG in
Melbourne, wrote in a note.
Gold XAU= was near a six-year low and oil edged lower,
though both U.S. crude futures CLc1 which were at $42.30 a
barrel and Brent LCOc1 at $45.43 a barrel, were up roughly 4
percent and 1 percent respectively for the week. O/R GOL/

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China's volatile markets http://link.reuters.com/myh35w
Currencies vs dollar http://link.reuters.com/tak27s
Commodities performance http://link.reuters.com/rac73w
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