China's yuan falls to a four-month low, causing state-owned banks to sell dollars for yuan and impacting Asian stocks and market recovery.

China's gloomy market outlook weakens Asian stocks, with the yuan falling to a four-month low and breaching the psychologically important 7.2 per dollar level. This has caused major state-owned banks in China to sell dollars for yuan in an attempt to slow the currency's decline, while Chinese stocks also tumbled in step with the yuan. These developments have dampened the market recovery that began in early February, as investors seek strong corporate performance for the recovery to sustain.