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Stocks steady as markets calm after Evergrande-led slide

Stock MarketsSep 21, 2021 06:26PM ET
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2/2 © Reuters. FILE PHOTO: An investor sits in front of a board showing stock information at a brokerage office in Beijing, China, December 7, 2018. REUTERS/Thomas Peter/File Photo 2/2

By Lewis Krauskopf and Lawrence White

NEW YORK/LONDON(Reuters) - World stock markets stabilized on Tuesday and oil prices regained ground a day after heavy selling of risk assets, as investors assessed the level of contagion stemming from distress at developer China Evergrande and awaited central bank meetings.

MSCI's gauge of stocks across the globe .MIWD00000PUS edged up 0.13%, following Monday's biggest percentage drop in two months. Wall Street's main indexes ended mixed after solid equity advances in Europe.

Price moves in bonds and currencies were relatively subdued. On Monday, safe-haven assets drew bids as investors became risk averse. Gold pushed higher again on Tuesday, in a sign of investor caution.

Investors were focused on the situation at Evergrande, where persistent default fears eclipsed efforts by the debt-laden group's chairman to lift confidence as Beijing showed no sign it would intervene to stem any domino effects across the global economy.

There are "some investors willing to step back in after a pretty big whack yesterday,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.

"The idea that (Evergrande) possibly being ‘contained’ has probably gained a little bit of steam today."

On Wall Street, the Dow Jones Industrial Average .DJI fell 50.63 points, or 0.15%, to 33,919.84, the S&P 500 .SPX lost 3.54 points, or 0.08%, to 4,354.19 and the Nasdaq Composite .IXIC added 32.50 points, or 0.22%, to 14,746.40.

The Cboe Volatility Index .VIX fell 1.35 points to 24.36 after hitting a four-month high a day earlier.

The pan-European STOXX 600 index .STOXX rose 1%, with Germany's DAX .GDAXI rising 1.4%.

Canada's main stock index .GSPTSE gained as the re-election of Prime Minister Justin Trudeau's Liberals reassured investors that the outlook for the economy would continue to improve.

Central bank meetings in the United States and elsewhere in the world were soon to take center stage for markets, with a Federal Reserve meeting due to conclude on Wednesday as investors look for when it will ease its bond-buying program.

(Graphic: Evergrande's debt pile, https://graphics.reuters.com/CHINA%20EVERGRANDE-DEBT/jnvweyjjlvw/CHINA-EVERGRANDE.jpg)

In currency trading, the dollar index =USD fell 0.012%, with the euro EUR= down 0.03% to $1.1722. The Japanese yen strengthened 0.18% versus the greenback at 109.20 per dollar.

"There is just a lot of wait-and-see as far as what is going to happen with the Fed, what is going to happen with Evergrande, and right now if you are trying to make a dollar bet you really just want to wait until you get a better sense of what is going to happen with Evergrande and what the Chinese government is going to do," said Edward Moya, senior market analyst at OANDA in New York.

Benchmark 10-year U.S. Treasury notes US10YT=RR last fell 5/32 in price to yield 1.3243%, from 1.309% late on Monday.

Oil prices edged higher in a see-saw session, as concerns about the global consumption outlook counterbalanced the struggle by big OPEC producers to pump enough supply to meet growing demand.

U.S. crude CLc1 settled up 0.4% at $70.56 per barrel and Brent LCOc1 settled at $74.36, up 0.6% on the day.

Spot gold XAU= added 0.5% to $1,773.09 an ounce.

Stocks steady as markets calm after Evergrande-led slide
 

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Comments (13)
Chris Johnson
Chris Johnson Sep 22, 2021 3:37AM ET
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Markets calms down after Evergrande say they will pay domestic interests... What a joke
William Bailey
William Bailey Sep 21, 2021 9:07PM ET
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Futures are down!!!
John Nguyen
John Nguyen Sep 21, 2021 8:15PM ET
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China will take the life time opportunity to bring down the whole world economy so they're can gain power. You watch
William Bailey
William Bailey Sep 21, 2021 8:00PM ET
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Game over!
JAMES CUNHA
JAMES CUNHA Sep 21, 2021 6:33PM ET
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The Fed's prolonged QE has essentially numbed the markets' efficiency.  The point of having these markets is for inventors to invest encourage the growth of companies that are profitable and bet against those companies that are either overvalued or unprofitable. Instead, the Fed's prolonged QE has created a moral hazard in our markets leading to a false sense of security that investors in search of yield are willing to invest in grossly overvalued companies or companies that aren't even profitable simply because they are being shorted. Tomorrow may be a surprise where the Fed actually does its duty and gives the markets specific direction as to tapering or it may continue to dilly-dally like it has been doing for more than 18 months while individual Fed governors are profiting from trading stocks.
JAMES CUNHA
JAMES CUNHA Sep 21, 2021 6:24PM ET
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...always an excuse when in reality it feels like there are a group of individuals that run the whole market gambit. Let's stop kidding ourselves, sometimes they will use the media to claim that something triggered a market selloff when in reality it was someone who has massive amounts of funds that decided to pull his or her money out because he or she wanted to increase his or her net worth by a few more billion as a result of buying in at lower prices. Alternatively, they position themselves to short the market then make it tank. I hate to sound like a conspiracy theorist, but you can't tell me that the Fed governors, who make or directly influence policies that impact the markets, don't have a personal stake in the equity markets.  Accordingly, the claim that markets are truly efficient and forward-looking is a thing of the past.
Darrell Peterson
Darrell Peterson Sep 21, 2021 5:52PM ET
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the Sun peaked through the Clouds today alleviating investor fears that there may be Rain in the forecast going forward .
Taylor Duran
Taylor Duran Sep 21, 2021 5:52PM ET
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Lol right
William Bailey
William Bailey Sep 21, 2021 2:13PM ET
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This is just the start! Same as February , 2020—-50 percent drop by end of October
jemin An
jemin An Sep 21, 2021 1:03PM ET
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Yes, market rebounds with hope and unsolved fears for Chinese unpredictable economy.
Miriam Morkhul
Miriam Morkhul Sep 21, 2021 9:06AM ET
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Pretty sure the sell off is related to the FED expectations.
William Bailey
William Bailey Sep 21, 2021 9:06AM ET
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Fed is out of bread and selling treasuries at a rate of 1/2 trillion a month since May on reverse repo market while pretending the 120 b makes a difference
John Snowden
John Snowden Sep 21, 2021 8:45AM ET
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yesterday's selloff wasn't very sharp, it means the selling volume wasn't that high. maybe some spooked whales and hedge funds while most people didn't care. or it may have been the smartest people in the room heading for the exits while the rest of us keep dancing.
William Bailey
William Bailey Sep 21, 2021 8:45AM ET
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Endgame when 300b in debt defaulted by a huge company … its a flock of canaries in the coal mine that died . Some will maintain its a fluke … another flock dies… panic
Marcus Berntsson
Marcus Berntsson Sep 21, 2021 8:45AM ET
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Endgame? Lehman was 600b, and that was 13y ago, before QE infinity, negative interest rates etc.
CFG fdez
CFG fdez Sep 21, 2021 2:56AM ET
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State shouldnt intervene. We are liberals, not communists
Erski Gumby
SB20 Sep 21, 2021 2:56AM ET
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Who are “We?”
perplexed76 .
perplexed76 . Sep 21, 2021 1:04AM ET
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Hooray! Hooray! gamblers opimistic again. Stock gamblers must demand FED to provide monetary help to this poor chinese company for everything keeps being fine.
Semih Unalan
Semih Unalan Sep 21, 2021 1:04AM ET
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Poor bear
William Bailey
William Bailey Sep 21, 2021 1:04AM ET
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Nah, its that gambler that smokes after losing and finds a dollar on the ground thinking it means he can put it in a slot machine and win
 
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