Breaking Stories

Mainland China markets briefly drop more than 1% as investors watch Evergrande crisis

SINGAPORE — Markets in mainland China fell more than 1% on Wednesday’s open before bouncing back slightly amid the ongoing Evergrande crisis, as markets reopened for trade after a two-day holiday.

With global markets selling off earlier this week, investors will be keeping a close watch on the China markets for any fallout surrounding the embattled developer.

Both the Shanghai composite and Shenzhen component dropped more than 1% in early trade, before easing off on some of those losses. The Shanghai composite was last down 0.51% while the Shenzhen component slipped 0.791%.

Meanwhile, the CSI 300 index that tracks the largest stocks listed on the mainland declined more than 1%.

Markets in Hong Kong were closed for a holiday. On Monday, the Hang Seng had plunged more than 3% before paring some losses on Tuesday.

“Investors will look for signs of intervention by government to prevent a disorderly default by property company Evergrande. Market turmoil surrounding the developer intensified in the past trading sessions as investors interpreted government’s silence hitherto on the distressed firm as a lack of official support,” Singapore bank DBS wrote in a note on Wednesday.

Evergrande’s shares in Hong Kong had slumped 10.6% on Monday and Tuesday combined, taking year-to-date losses to 85%, the bank noted.

Other Asia-Pacific markets

Elsewhere in Asia, the Nikkei 225 in Japan slipped 0.61% while the Topix index shed 0.73%. The Taiex in Taiwan dropped 2.15%. South Korea was closed for a holiday.

In Australia, the S&P/ASX 200 edged 0.48% higher.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.4% lower.

Overnight stateside, the Dow Jones Industrial Average dipped 50.63 points to 33,919,84 while the S&P 500 declined around 0.1% to 4,354.19. The Nasdaq Composite outperformed, rising 0.22% to 14,746.40.

Investors look ahead to the policy statement from the U.S. Federal Reserve, expected Wednesday stateside, for signals on when the central bank could taper its bond purchase program.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 93.2 after sliding from levels above 93.3 earlier in the week.

The Japanese yen traded at 109.34 per dollar, having strengthened from around 110 against the greenback earlier this week. The Australian dollar changed hands at $0.7246 following its decline yesterday from above $0.725.

Oil prices were higher in the morning of Asia trading hours, with international benchmark Brent crude futures up 0.67% to $74.86 per barrel. U.S. crude futures gained 0.79% to $71.05 per barrel.

What's your reaction?

In Love
Not Sure

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *