Hang Seng and Stoxx 600 rebounded from a slump

Highlights:

• • USA
    The Dow Jones lost 1.78% or 614.08 points, to 33,970.80. Meanwhile, the S&P 500 fell 1.70%, or 75.31 points, to 4,357.65. The Nasdaq index plunged by 2.19% or 330.06 units, standing at 14,713.90.
  • ASIA
    The Nikkei plunged by 2.17% or 660.34 points to 29,839.71.
    The Hang Seng Index closed with a rise of 0.51% or 122.40 points to 24,221.54.
  • EUROPE
    The STOXX 600 was trading with a rise of 0.9%.

Wall Street was shaken by fears of Evergrande bankruptcy

Wall Street moderated losses this Monday. 

The Dow Jones lost 1.78% or 614.08 points, to 33,970.80. Meanwhile, the S&P 500 fell 1.70%, or 75.31 points, to 4,357.65. The Nasdaq index plunged by 2.19% or 330.06 units, standing at 14,713.90.

A potential collapse of China’s Evergrande prompted a broad sell-off. 

Microsoft Corp, Alphabet Inc, Amazon.com Inc, Apple Inc, Facebook Inc, and Tesla Inc were among the biggest drags on Wall Street. All major sectors on the S&P 500 slipped. Among them, economically sensitive stocks like energy lost the most. On the other hand, investors are nervous ahead of the Fed meeting this week. The markets are adopting a very cautious stance ahead of the Fed’s verdict. However, the official announcement of tapering is unlikely to come until the next meeting.

In addition, the market is still concerned by the Delta variant of the coronavirus, as well as supply chain disruptions, and inflationary fears. 

 

Other factors are affecting the markets, such as the issue of raising the debt ceiling. US Treasury Secretary Janet Yellen is warning of the consequent risks if Congress delays acting too long. 

The uncertainty on the budget issue is now linked to Joe Biden’s infrastructure investment project. It deeply divides the Democratic Party. The most conservative Democratic senator, Joe Manchin, called for a strategic pause on this plan of 3.500 billion dollars until 2022. But other Democrats are hoping for a vote on September 27 in the House of Representatives.

As for the economic news in the US, the index of the American real estate market of the National Association of Home Builders for September 2021 came out at 76. It’s higher than the economists’ expectations.

 

The Nikkei falls by 2.17%

The Nikkei plunged by 2.17% or 660.34 points to 29,839.71. 

The financial crisis of the Chinese real estate giant Evergrande Group has heightened the sense of caution about the future of the financial system and the Chinese economy. As a result, investor sentiment has deteriorated. A wide range of brands was sold, mainly in industries sensitive to economic trends such as shipping and steel. 

 

It is the first time that the Nikkei has lowered the psychological barrier of 30,000 points in about two weeks. It happened after the stock market finally received an external stimulus to the imminent political change in the country, which had taken the Japanese market to levels not seen in 31 years.

Among the factors that weighed in Tokyo today was a revaluation of the yen. The Japanese currency is considered a haven asset in times of uncertainty. However, its strength is an unfavorable trend for local exporters, who see it reducing the competitiveness of their products.

The iron and steel sector reaped the main losses of the day, along with machinery and marine transport.

The Softbank group accumulated the highest volume of operations and its shares decreased by 4.98%. The investment and technology conglomerate was the fifth-worst performer on the Nikkei. The biggest loser was the toilet manufacturer Toto, which shed 6.06%.

By the number of transactions, the railway operator JR West was the third. However, contrary to the general trend, it rose by 2.77%. The transport company Nippon Yusen Kaisha lost 2.8%.

Meanwhile, Toyota fell by 0.9%, while tech multinational Sony climbed by 0.2%.

The trading volume of the session amounted to 3.38 trillion yen.

Real estate and gaming stocks rebound on Hang Seng

 

Hong Kong stocks kept rising in the afternoon. The Hang Seng Index closed with a rise of 0.51% or 122.40 points to 24,221.54.

The strength of real estate stocks pushed the Hang Seng Index higher in late trading.

The Hang Seng Technology Index continued to decline in the afternoon after falling more than 2% in early trading. As of the close, Baidu lost 1.92%, after dropping by more than 4% during the session. Bilibili shed 0.53% after recovering from a 4.5% slump. Meanwhile, Kuaishou fell by 1.53%, Tencent Holdings slipped by 0.92%, and Meituan yielded 1.71% after sliding by 4% during the session.

 

Gaming stocks rebounded collectively. MGM shares rose by more than 7%, Wynn Macau added more than 5%, Melco International advanced by more than 4%. Also, Sands China raised by nearly 4%.

 

At the same time, power stocks continued to rise. Analysts are still optimistic about the mid-to-long-term performance of Hong Kong stocks. 

Among the sub-indices, Real Estate led earnings, advancing by 2.97%. It was followed by the Finance sector with an increase of 1.53%. Meanwhile, the Services sector added a slight 0.02%. The Trade and Industry sub-index was the only sector to close in the negative territory, losing 0.43%.

European shares bounced after their worst session

 

Evergrande’s liquidity problems have increased the list of concerns of investors in the European stock markets. Yesterday, they closed the worst session in two months. 

European shares rose on Tuesday after worries about the Evergrande crisis eased. Meanwhile, music label Universal Music Group soared by 38% in its stock market debut. It is the business behind singers such as Lady Gaga, Taylor Swift, and The Weeknd. On its first day of trading, it got a market capitalization of more than 46 billion euros.

The STOXX 600 was trading with a rise of 0.9% after sinking to a two-month low in the previous session.

 

Media, mining, and energy stocks were leading the increases. At the same time, Germany’s DAX rebounded from its lowest level since late July.

This week, the focus is on central banks’ policy meetings. 

Investors expect some of them to show readiness to ease their pandemic-era stimulus to resist high inflation.

 

Michael Hewson, a chief market analyst at CMC Markets UK, stated that concerns about Evergrande remain. However, their market seems to be adopting a wait-and-see approach. 

Europe’s benchmark Stoxx 600 has fallen from September’s record highs after seven straight months of gains.

However, helping sentiment on Tuesday, travel-related stocks jumped. British Airways owner IAG, cruiseliner Carnival Corp and InterContinental Hotels Group bounced between 2% and 5% following the relaxation of US travel restrictions.

 

Britain’s National Express rose by 4% after rival Stagecoach Group said it was in talks with National Express about a possible all-share merger. Stagecoach’s shares jumped 17.3%.

Shares of owner Vivendi sank by 16.7%.

Sweden’s gardening power tools group Husqvarna tumbled by 5.4% after warning it could potentially lose top-line sales of up to around 2 billion crowns due to a supplier dispute.

UK’s FTSE 100, Spain’s IBEX, and Italy’s FTSE MIB gained between 0.7% and 0.9%.