Chinese airlines and European luxury-car makers are emerging as the early losers Tuesday after the People's Bank of China let the yuan fall the most in two decades.

China's surprising move to cut its daily reference rate by 1.9 percent Tuesday rippled through global markets. Policymakers called the change a one-time adjustment and said its fixing will become more aligned with supply and demand.

UPDATE:  The yuan fell again Wednesday.

While it is unclear if the yuan will keep dropping, investors on Tuesday started to assess the potential winners and losers.


-- Chinese airlines. Chinese carriers have most of their debt in dollars. A weaker yuan will increase their costs to pay it off and hurt their earnings. China Southern Airlines Ltd. declined 18 percent in Hong Kong trading, the most since 2001. China Eastern Airlines Ltd. slumped 16 percent, the steepest drop in seven years.

Each 1 percent drop in the yuan erodes 767 million yuan, about $121 million,  from China Southern's annual profit, according to the carrier's 2014 financial report.

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-- European luxury-goods sellers. As the European Union's largest trading partner, China and its growing middle class has been a boon for the region's luxury-goods makers. A weaker yuan makes it more expensive for Chinese consumers to buy German cars, Swiss watches and French handbags. Shares of BMW, which received about 19 percent of its revenue from China in 2014, sank 4.3 percent in Germany. China also accounted for about 10 percent of Daimler's sales.

LVMH Moet Hennessy, which includes the high-end luggage brand Louis Vuitton, slid 5.4 percent. Sales from Asian nations excluding Japan accounted for about 29 percent of the luxury-goods maker's sales last year.

-- Commodity producers. The yuan's decline increases the cost of imports, including commodities.

Vale, the world's biggest iron-ore producer, slumped as much as 6.2 percent in Sao Paulo. China accounted for 37 percent of the company's revenue in the second quarter.

China's imports contributed to 35 percent of the Australian mining company BHP Billiton's sales last year and accounted for 38 percent of the sales of Rio Tinto Plc.

-- Asian currencies. All major Asian currencies fell on concern a weaker yuan will force other policymakers in the region to devalue their foreign-exchange rates as cheaper Chinese exports edge out competitors. The Singapore dollar led the decline, falling 1.6 percent in the biggest sell-off since 2011, while the South Korean won dropped the most since May 2013.


-- Chinese exporters. Local exporters in general benefit from a cheaper yuan. China Machinery Engineering Corp. rose as much as 5.9 percent in Hong Kong, while Lenovo Group Ltd. closed 2.9 percent higher. Each gets more than 65 percent of revenue from overseas.

China car exports have slowed in the past years as the weakening of the yen and won increased the pricing advantage of Japanese and South Korean competitors, according to Dong Yang, secretary-general of China Association of Automobile Manufacturers. Yin Tongyue, chairman of Chery Automobile Co., China's biggest vehicle exporter, says he supports a weaker yuan as it is good for the company's overseas sales. Li & Fung Ltd., a Hong Kong-based trading company which sells China-made clothes and toys to the United States and Europe, rose 5 percent in Hong Kong.