Asian shares mixed after China Evergrande warns of cash woes

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Troubled Chinese property developer Evergrande warned late Friday it could run out of money, with stocks in Asia soaring

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BANGKOK – Shares in Asia were mixed on Monday after troubled Chinese property developer Evergrande warned late Friday.

Hong Kong fell 1.2% but the Shanghai Composite Index rose. South Korea’s benchmark advanced but Tokyo and Sydney declined.

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More broadly, investors are grappling with uncertainty about the latest coronavirus version and about when the Federal Reserve will end its support for the markets.

What is worrying is that volatile levels of debt in the property sector could lead to a financial crisis. China wants to avoid a bailout, but it is also unlikely that the situation will worsen to such an extent that problems will reach that level.

Many real estate companies have been in trouble as the government has pushed for lowering debt levels, but officials have issued a statement saying China’s financial system is strong and default rates are low. Recent statements said that most developers are financially sound and Beijing will continue to keep the lending markets functioning.

Shares of Evergrande were down 9.8% early Monday, helping drag the Hang Seng in Hong Kong down to 23,467.42.

Chinese tech giant Alibaba, which has been embroiled in a multifaceted crackdown on the industry, also pulled down benchmarks, with the company saying it is replacing its chief financial officer, Maggie Wu, and overhauling its e-commerce business. has been

In Tokyo, the Nikkei 225 was down 0.4% at 27,932.18 and in Sydney the S&P/ASX 500 was down 0.2% at 7,226.00.

The Shanghai Composite Index rose 0.4% to 3,620.92, while the Kospi in Seoul rose 0.1% to 2,972.47.

“This is a week that will force uneasy contemplation about the ‘known unknowns’ primarily associated with Omicron, the Fed tightening and China (regulatory/asset) risks,” Mizuho Bank said in a commentary.

This will bring yet more uncertainty, it said.

Last week’s volatile swings on Wall Street ended Friday with further losses for stocks, as a mixed batch of US job market data triggered another bout of dizzying trading.

The S&P 500 fell 0.8% to close at 4,538.43. The Dow closed down 0.2% at 34,580.08. The Nasdaq fell 1.9% to 15,085.47, while the Russell 2000 fell 2.1% to 2,159.31.

Friday’s jobs report, usually the most anticipated economic data every month by Wall Street, showed employers added only 210,000 jobs last month. Economists were expecting a stronger recruitment of 530,000, and it raised concerns that the economy could stagnate while inflation remains high. This is a worsening of what has been called “inflation” by economists, and the advent of the O’Micron version makes its likelihood all the more uncertain.

Some investors said the jobs report could eventually prompt the Fed to be more aggressive about raising short-term interest rates from their record lows. Others said they expected the mixed report to have no effect.

In what matters to Fed stocks as low interest rates have been one of the main reasons the S&P 500 has nearly doubled since the early days of the pandemic. Lower rates encourage borrowers to spend more and investors to pay higher prices for shares.

The Fed is already slowing down its program to buy billions of dollars worth of bonds each month to support the economy and markets.

With some concrete answers about Omicron, investors are sending the market back and forth as minor clues emerge. It is not clear whether existing vaccines are effective against the variant, whether people will fear businesses because of it and whether already high inflation will worsen because of it.

In other trade, US benchmark crude oil rose $1.46 to $67.72 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, it fell 24 cents to $66.26.

Brent crude, the standard for international oil pricing, rose $1.43 to $71.31 a barrel.

The US dollar rose from 112.92 yen to 113.00 Japanese yen. The euro weakened from $1.1309 to $1.1292.


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