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World shares sink as China Evergrande fears spark risk off

EconomySep 20, 2021 08:57PM ET
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2/2 © Reuters. FILE PHOTO: A man looks at a board showing stock prices outside a brokerage in Tokyo, Japan, January 6, 2020. REUTERS/Kim Kyung-Hoon 2/2

By Lewis Krauskopf and Tom Arnold

(Reuters) - World stocks sold off sharply on Monday while safe-haven assets gained as troubles at property group China Evergrande fed concerns about spillover risks to the economy, sparking fresh investor worries ahead of a busy week of central bank meetings.

MSCI's gauge of stocks across the globe shed 1.63%, its biggest one-day percentage fall day in about two months, as Wall Street's benchmark S&P 500 sagged 1.7% and the tech-heavy Nasdaq tumbled 2.2%.

Investors moved into safe havens, with U.S. Treasuries gaining in price, pulling down yields, and gold rising.

Shares in Evergrande, which has been scrambling to raise funds to pay its many lenders, suppliers and investors, closed down 10.2% at HK$2.28.

Regulators have warned that its $305 billion of liabilities could spark broader risks to China's financial system if its debts are not stabilized.

“It started with the problems with the China Evergrande real estate company and I think it just has become a contagion,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

"Everybody was kind of afraid of September for this very reason," Tuz said. "It seems to be the month that... you have significant selloffs and here we go.”

On Wall Street, the Dow Jones Industrial Average fell 614.41 points, or 1.78%, to 33,970.47, the S&P 500 lost 75.26 points, or 1.70%, to 4,357.73 and the Nasdaq Composite dropped 330.07 points, or 2.19%, to 14,713.90.

Economically sensitive sectors, including financials and energy, were hit particularly hard. Still, stocks pared losses late with U.S. indexes ending above their session lows.

The pan-European STOXX 600 index lost 1.67%, with mining stocks sliding.

The selloff on Monday has seen a cumulative $2.2 trillion of value wiped off the market capitalization of world equities from a record high of $97 trillion hit on Sept. 6, according to Refinitiv data.

(GRAPHIC: China CDS - https://fingfx.thomsonreuters.com/gfx/mkt/jnpweyarzpw/cds.PNG)

Worries over Evergrande come as a rally in equities has stalled recently with investors focused on the impact of coronavirus cases on the economy, and when central banks will ease back on monetary stimulus.

The U.S. Federal Reserve is due to meet on Tuesday and Wednesday as investors look for when it will begin pulling back on its bond purchases.

Investors were also keeping an eye on other central bank meetings spanning Brazil, Britain, Hungary, Indonesia, Japan, Norway, the Philippines, South Africa, Sweden, Switzerland, Taiwan and Turkey.

In currency trading, the dollar index rose 0.02%, with the euro up 0.01% to $1.1726.

The offshore Chinese yuan weakened versus the U.S. currency to its lowest level in nearly a month.

Benchmark 10-year notes last rose 16/32 in price to yield 1.3158%, from 1.37% late on Friday.

The iShares exchange-traded fund tracking high-yield corporate bonds fell 0.4%.

U.S. crude settled down 2.3% at $70.29 per barrel and Brent settled at $73.92, down 1.9% on the day.

Spot gold added 0.6% to $1,764.30 an ounce, rising off of a one-month low.

World shares sink as China Evergrande fears spark risk off
 

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Comments (18)
Erski Gumby
SB20 Sep 21, 2021 3:17AM ET
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The dragon is …
jonathan seagull
jonathan seagull Sep 20, 2021 8:40PM ET
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These days I keep getting laid as many Chinese girls as I should as world freedom fighter. God bless America.
Meru Pet
Meru Pet Sep 20, 2021 6:25PM ET
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Tesla is finally affordable 🤣
Modern Matrix
Modern Matrix Sep 20, 2021 6:25PM ET
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it didn't drop much. was down way more in the past months since Feb. Tesla going to explode soon back to 775+ when to buy is the trick.
Leo San
Leo San Sep 20, 2021 6:21PM ET
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Yall let this firm shake yall? Lmfao , oversold in alot usa stock! Thanks for cheaper shares is bullish
Mike Chen
Mike Chen Sep 20, 2021 5:37PM ET
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China will survive this small tremor. Time to do bargain hunting
Mo Ali
Av8er31 Sep 20, 2021 12:51PM ET
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Chinese knew our Healthcare industry is weak and government is in massive debt, what they do ? Unleash COVID-19. Made America go into debt 10x faster, and print enormous amounts of currency. Genius really. Now that the U.S. is in a vulnerable position, Evergrande will be their dagger. They will protect their own banks because they have the money to do so, and let it crash and burn, and in the process bring USA to its knees. Financial warfare, not one bullet fired. Genius.
Petru Alex
Petru Alex Sep 20, 2021 12:51PM ET
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if you go by that line of tought, name of their dagger is really suggestive 👍
Darshana Trivedi
Darshana Trivedi Sep 20, 2021 9:56AM ET
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it is the next financial crisis in the making. it is the new Lehman brothers! stay safe. wear a Mask 😷🎭
Jack Sharma
Jack007 Sep 20, 2021 9:56AM ET
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yes every year you loosers want financial crises. it won't come in decades.
andy matalobos
andy matalobos Sep 20, 2021 9:30AM ET
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The United States might believe it needs to engage with China on the basis of a "position of strength" and revive a new "cold war." against the Chinese. "China is not the Soviet Union. The collapse of the Soviet Union was caused by itself, "China will destroy the U.S.A in a useless arrogant new Cold War 🥶
Ron Love
Ron Love Sep 20, 2021 8:23AM ET
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Doom! Panic! Sell everything now and buy rice and beans! Quit your jobs, sell your home and buy a tent and move into the woods!
Sajjad Ahmad
Sajjad Ahmad Sep 20, 2021 8:23AM ET
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what are you expecting us30 to go down
Cameroonian Genius
Cameroonian Genius Sep 20, 2021 8:23AM ET
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finally some good advice in these comments
Zhikang Sim
Zhikang Sim Sep 20, 2021 8:16AM ET
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what happend if FED start tapering now 😴
Wojciech Stefaniak
Wojciech Stefaniak Sep 20, 2021 7:44AM ET
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Stock exchange + eggheads Chinese communists = red color (they like only this color?)
Marco cuevas
Marco cuevas Sep 20, 2021 6:17AM ET
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Everything is going according to plan-CCP
mike jonex
mike jonex Sep 20, 2021 5:59AM ET
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These articles authors(theatrical story tellers) are just trying to cause panic and scare tactics. They do not even try and hide it anymore. World is ending sentiment. Tip - you do not have to write when there is not anything to write about. No need to attempt to spread wide panic when it is not the truth. However, then you would not get paid. Ridiculous.
Fong SH
Fong SH Sep 19, 2021 11:32PM ET
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Please don't get too emotional in the on-going crisis. Well, this is even smaller than what happened in Lehman Bros' days. Yes, one comapany's greed & blunder can pull the whole financial markets down, but, we are all getting news of assumptions, predictions & so forth, in actual fact, nobody knows the real issues inside this hot soup. It's not dead for all, depending on which sector you are in, there's still growth in some good companies, which I think, this is a good opportunity to buy low. Not there yet, probably another 10 percent dropped, there are some value companies worth picking up if you're looking at year end rebounce. No properties, no education, no airlines or travel stocks. I am looking at companies involved in 5G technology, those involved in the startup as I think when China fully roll out 5G in mid 2022, it's a good sector to look at. Have a pleasant day, please take care when outdoors.
Edward Chong
Edward Chong Sep 19, 2021 11:32PM ET
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yeap agree. its not a crisis. its juz BB doing usual funny things.
Jt Overstreet
Jt Overstreet Sep 19, 2021 11:32PM ET
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where there's one company like this, there's another. is this your first time?
Jon Bal
Jon Bal Sep 19, 2021 11:32PM ET
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Jt Overstreet  yaas.  for every cockroach you see theres 100 more hiding behind the walls
ZS Beck
ZS Beck Sep 19, 2021 11:16PM ET
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F Chinese, not enough they give us Covid, now they give us Everglade.
Show previous replies (4)
Sean Livingstone
Sean Livingstone Sep 19, 2021 11:16PM ET
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Fong SH  the one who bullies always want to put the blames on others.
Fong SH
Fong SH Sep 19, 2021 11:16PM ET
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Sean Livingstone  it's alright, we're all into this. Take good care, have a pleasant day. I am in Singapore here, it was alright for the passed 1 year in Covid-19 status, suddenly, numbers of victims triggered to above 1000++ & we're all living with it. Lucky, almost 60% above of Singaporeans are vaccinated, including myself, had my two shots but not risking to go out unnecessarily. Well, about this financial markets draught, to be honest, nobody knows what's the real caused yet, it's just some write up & there's no real confirmation of how bad it is. Most are media reports doing predictions. Even China governing body didn't say it clearly. At least it is not as big as Lehman Bros, it will be contained but takes time, maybe one month clean up. This is could be tactic for China to get foreign funds out of China & Hong Kong, as with the on-going spat with China's newly setup financial regulators. I am positive actually.
Adam Morris
Adam Morris Sep 19, 2021 11:16PM ET
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@ZS Beck you are what's wrong with this world. Your a f'redneck lol.
Erski Gumby
SB20 Sep 19, 2021 11:16PM ET
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Sean Livingstone According to f’ng liberals, one must be white to be racist. How can you assume ZS Beck’s race without knowing him? In addition, being against China is not racist specially because Chinese is not a race. Beck could be from Taiwan whom you believe are all Chinese. Stop pulling the race card.
Jeff Chevalier
Jeff Chevalier Sep 19, 2021 11:16PM ET
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And the US gave us Lehman, housing and the dot come bubble. Let's not forget 1929 when China didn't even have a market. The US has screwed up the world markets more than anyone.
The Wolverine
The Wolverine Sep 19, 2021 10:57PM ET
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Now Fed won't taper
Devin Nathaniel
Devin Nathaniel Sep 19, 2021 9:45PM ET
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the f3d well feed
Terence Williams
Terence Williams Sep 19, 2021 9:35PM ET
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The Fed ..bad boys, bad boys, what they gonna do.
Jason Park
Jason Park Sep 19, 2021 9:35PM ET
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Powell wants to go to China and take over the money printer. Brrrr Brrr
 
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