China's stunning decision to devalue its currency by almost 2 percent had an instant impact Tuesday on the stock prices of companies that do business there.

The move was called a "one-off depreciation" by the People's Bank of China and led to the yuan's biggest drop since 1994 and its lowest level against the dollar in almost three years. China took the bold step in light of an 8.3 percent drop in exports in July vs. a year ago.

"The growth challenges for the country are huge, and the slowing in the past year has been of great concern," Andrew Karolyi, a finance professor at Cornell University and author of Cracking the Emerging Markets Enigma (Oxford University Press), told China Daily.

"I predict the relief from price pressure for export-oriented Chinese companies will be transitory as are the spillovers to other regional currencies, oil prices and markets around the world," he said.

"The real question though is whether this action really reflects a one-time event as the PBOC claims or a fundamental shift in policy."

Some early winners from the devaluation included Chinese tech companies and US retail giant Wal-Mart Stores Inc.

Losers luded luxury-goods and carmakers, which already had been pinched by a slowing Chinese economy, and Chinese airlines, which just saw their debt service soar.

Wal-Mart, which sources many of its products from Chinese manufacturers, managed to finish slightly higher, at $71.93, up 0.6 percent on Tuesday, while the Dow Jones Industrial Average and the Nasdaq Composite Index took a pounding. The Dow finished down 212 points; the Nasdaq dropped 50 points; and the S&P 500 fell 20 points.

Apple Inc's rivals in China - telecom-equipment maker Huawei Technologies Co (up 1.6 percent), PC maker Lenovo Group Ltd (2.9 percent higher), and smartphone maker Xiaomi Corp (privately owned) will now have an advantage of lower costs at home while their overseas market share grows.

Apple product assembler Foxconn also will benefit because it pays its workers in yuan but sells its products in dollars. Apple could be impacted because it sells more than 25 percent of its phones in China. However, because the brand is so popular there, it's too soon to tell if the Chinese are willing to pay more for the prestigious gadgets and/or Apple will adjust its prices. Nonetheless, Apple shares closed at $113.49, down $6.23 or 5.2 percent.

German automaker Daimler AG fell 5 percent; BMW AG dropped 4 percent and Volkswagen AG declined 3.7 percent. Volkswagen sells 40 percent of its vehicles in China (10.1 million in 2014); BMW gets about 19 percent of its revenue from China, and Daimler, maker of Mercedes-Benz autos, records about 10 percent of sales from China.

Burberry Group PLC, the British maker of fancy trench coats and scarves, was down 4 percent. LVMH Moet Hennessy Louis Vuitton SE of France, which sells everything from clothes and perfume to watches and champagne, dropped 5.4 percent.

China Southern Airlines Ltd and China Eastern Airlines Ltd each tumbled more than 15 percent on Tuesday in Hong Kong trading.

Shares of Yum Brands Inc, operator of popular restaurants KFC and Pizza Hut, closed at $83.54, down 4.9 percent. Yum booked almost 60 percent of its global sales from China in the first half of 2015.

KFC, the No. 1 foreign brand in China, has more than 4,800 restaurants in over 1,000 Chinese cities, and there are about 1,400 Pizza Huts in 385 Chinese cities.

williamhennelly@chinadailyusa.com