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World shares slide on China investment worries

Published 09/15/2021, 10:43 PM
Updated 09/16/2021, 09:01 PM
© Reuters. FILE PHOTO: A man wearing a protective face mask walks past a screen displaying a graph showing recent Nikkei share average outside a brokerage, amid the coronavirus disease (COVID-19) outbreak, in Tokyo, Japan November 2, 2020. REUTERS/Issei Kato

By Elizabeth Dilts Marshall

NEW YORK (Reuters) -Global share markets edged lower globally on Thursday as concerns about investments in China and a mixed day on Wall Street outweighed positive economic data in the United States.

The three major indexes spent much of the day in negative territory as rising U.S. Treasury yields pressured market-leading tech stocks, and the rising dollar weighed on exporters.

International investors who have been piling into China in recent years are now bracing for one of its great falls as the troubles of over-indebted property giant China Evergrande come to a head.

Dwindling resources set against 2 trillion yuan ($305 billion) of liabilities have wiped nearly 80% off the developer's stock and bond prices, and an $80 million bond coupon payment now looms next week.

Hong Kong's Hang Seng index dropped to its lowest level so far this year.

A report from the U.S. Commerce Department on Thursday showed retail sales unexpectedly rose in August, indicating America's economic recovery is strengthening on positive trends in consumer spending.

The strong data sent safe-haven gold down nearly 3%.

However, the U.S. labor market remains under pressure, with initial jobless claims rising by slightly more than expected last week.

"(Retail spending) categories that were strongest in August were in COVID-beneficiary categories," wrote Ellen Zentner, chief U.S. economist at Morgan Stanley (NYSE:MS).

"Now incorporating today's retail sales release, we lift our real (personal consumer expenditures) tracking to +1.9% and GDP to +5.0%."

The MSCI world equity index was last down by 0.25% , off an all-time high on Sept. 7. MSCI's broadest index of Asia-Pacific shares outside Japan closed down 0.83%.

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European equities bucked the trend, and Europe's STOXX 600 closed up 0.44% .

The Dow Jones Industrial Average fell 63.07 points, or 0.18%, the S&P 500 lost 6.95 points, or 0.16%, and the Nasdaq Composite added 20.40 points, or 0.13%.

Markets remain focused on next week's Federal Reserve meeting for clues as to when the U.S. central bank will start to taper stimulus, especially after the flurry of U.S. economic data out this week.

On Tuesday, data from the U.S. Labor Department showed inflation cooling and having possibly peaked, but inflation in Britain was the highest in years, according to data on Wednesday.

The dollar index rose 0.441%, with the euro down 0.41% to $1.1767.

The yield on 10-year Treasury notes US10YT=RR was up 2.9 basis points at 1.333%.

Spot gold dropped 2.3% to $1,751.53 an ounce. U.S. gold futures fell 2.27% to $1,751.70 an ounce.

Oil prices steadied on Thursday after hitting a multi-week high a day earlier as the threat to U.S. Gulf crude production from Hurricane Nicholas receded.

Brent crude LCOc1 ended the session up 21 cents, or 0.3%, at $75.67 a barrel. On Wednesday Brent touched $76.13, its highest since July 30.

Latest comments

Did anyone consider that if so many mortgage owners have died in Asia from Covid then you have  lots of potential real estate loan defaults to deal with.
Retail sales does not mean recovery. It means broke americans are spending money on products they dont produce. I expect more from people who have the oportunity to write to the public.
its also August figures - all the stimulus cheques ended on Labor Day - Sept is going to be grim with hundreds of thousands of people no longer receiving 1800 USD per month for sitting at home and doing nothing.
Now CRUDE prices have risen sharply and FURTHER down step is ahead and in October Gold prices and rising demand in Asian countries as well as rising demand in Europe for hedging funds .Mostly due to pressure in the markets over pandemic inflation has seen more growth but in the coming months the situation will continue to rise in economic growth in Europe as well as in Asian countries like India,Japan against excellent monsoon,In India crop expectations is just double which will make push the biggest increase in Asian countries.
The picture perfectly represemts the failed biden administration.
none of this has just happened since January - Duh! This is a failed state by both parties who divide and conquer and whilst you're all squabbling over Dem V Rep, the Deep State steals from all of us. Wake up!!!
your paranoia is noted.
Tetail goes up in Aug. Back to School........
And we should thank China somehow with her effort fighting inflation
I would like to add one more point here - well, all these doldrums, everyone has to take the blame too, from analysts ratings to financial supports. It's because of all these good, thumbs ups reports that let a company's investment's board deal with forward decisions of developments without sound warnings. When the borrowings goes big & suddenly someone do a rating again, it's becomes an ugly picture, all the warning signs pointing to negatives, which doesn't substitutes the first calling. Who's to blame? Simple, a crook will never own up I was the culprit. Find a scapegoat, point at him, everyone will follow, suddenly all the nasty reports coming out from all directions, when in the first leg, where everyone is calling for a BUY. lol. Well, it's all in the name of the game, you win some, you loose some, a lesson learnt, of course the hard way but you become wiser.
These are the unexpected doldrums in financial markets The only problem is, normally many ignore what's cooking until the pot is overspilled & suddenly all the experts comes in to do advice, analyse & so forth. This is nothing compared to what happened in 2007 Lehman Bros crisis, that sent ripples to everyone bones around the world. This, Evergrande is well contained inside and within China, at least, the pot lid is still on, tight, not spilled over yet. I think it's a good job done. We'll see. Good luck!
massive contagion will follow - it's a total disaster - all financial markets and banks are linked. We live in a global economy with global markets!!!
What’s going to be the headline the next day? lol
lol well said - Headline - one day - all is calm, been done and settled, taken care. lol
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