Asian shares slide after China Evergrande warns of cash woes

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Shares in Asia are mostly lower after troubled Chinese property developer Evergrande warned late Friday that it could run out of money.

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BANGKOK – Shares in Asia fell mostly on Monday after troubled Chinese property developer Evergrande warned late Friday it could be out of the money.

Investors are also grappling with uncertainty about the latest coronavirus version and about when the Federal Reserve will end its support for the markets.

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It said it would bring even more uncertainty after a turmoil last week.

Hong Kong fell 1.8% and the Shanghai Composite Index gave up early gains, down 0.5%. Benchmarks in South Korea and Australia advanced but Tokyo fell.

India’s benchmark fell 0.9% and Taiwan’s also lower. Markets in Thailand remained closed for a public holiday.

Chinese regulators scrambled to reassure investors after Evergrande, one of China’s biggest developers, said it could run out of money to “meet its financial obligations” as it lost its $310 billion Struggles to comply with pressure to reduce debt.

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 lost 0.4% to close at 27,927.37. Hong Kong’s Hang Seng fell 417.31 points to end at 23,349.38. The Shanghai Composite Index gave up early gains, falling 18.13 points to end at 3,589.31.

But in Sydney, the S&P/ASX 500 gained 0.1% to close at 7,245.10, up slightly. In Seoul, the Kospi ended 0.2% higher at 2,973.25.

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.

In other trade on Monday, US benchmark crude oil rose $1.22 to $67.48 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 $1.23 to $71.11 a barrel.

The US dollar rose from 112.92 yen to 113.17 Japanese yen. The euro weakened from $1.1309 to $1.1288.


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