Global stocks fall after Evergrande’s failed plan to sell property management arm

Global stocks were mostly weaker on Thursday after major Chinese property developer Evergrande said a plan to sell its property management arm to a smaller rival had failed.

France’s CAC 40 fell 0.4% in early trading to 6,679.78, while Germany’s DAX fell 0.2% to 15,498.69. Britain’s FTSE 100 fell 0.4% to 7,198.09. US stocks were expected to fall with Dow futures down 0.3% at 35,375.00. S&P 500 futures fell 0.3% to 4,516.75.

Shares of China Evergrande Group fell 12.5% ​​while shares of Evergrande Property Services fell 8%. In a notice to the Hong Kong stock exchange, Evergrande said it was having difficulty selling assets to solve its liquidity problem.

Shares of Hopson Development Holdings rose 12.4% after it said it was unable to complete the purchase. Trading in the shares of the three companies has been suspended pending resolution of the transaction.

Hong Kong’s Hang Seng Index lost 0.5% to 26,017.53, while the Shanghai Composite Index gained 0.2% to 3,594.78.

Some “verbal assurances from government officials and the easing of home lending for some of its major banks suggests authorities are monitoring risks in the property market, hoping to reassure markets about the impact on the economy,” it said. said Yeap Jun Rong, market strategist at IG in Singapore.

Japan’s benchmark Nikkei 225 fell 1.9% to end at 28,708.58 as the world’s third-largest economy heads into national elections to select a new prime minister.

Japan’s ruling party candidate, Prime Minister Fumio Kishida, has given mixed messages about his “new capitalism” policies and measures, which include promises to reduce income disparity. This has hardly reassured the markets so far.

Australia’s S&P/ASX 200 was little changed, rising less than 0.1% to 7,415.40. The South Korean Kospi fell 0.2% to 3,007.33.

The market gained ground as investors focused on the latest round of corporate earnings. Stocks have been choppy for weeks as rising inflation and lackluster economic data raised concerns about the path ahead for economic recovery.

Several large companies have yet to report their results this week. American Airlines, Southwest Airlines and Union Pacific will report Thursday.

In energy trading, benchmark U.S. crude fell 33 cents to $83.09 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, fell 59 cents to $85.23 a barrel.

In currency trading, the US dollar fell to 114.04 Japanese yen from 114.27 yen. The euro slipped to $1.1643 from $1.1651.

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Posted: Thursday, October 21, 2021, 9:35 PM IST