Heavy losses on Wall Street: Evergrande crisis unsettles investors

Heavy losses on Wall Street
Evergrande crisis unsettles investors

Concerns about the ailing Chinese real estate developer Evergrande are sending prices on Wall Street plummeting. In addition, economic worries are making investors nervous. As the price of oil rises, so do energy values.

Wall Street has recorded heavy losses, primarily burdened by the crisis surrounding the Chinese real estate company Evergrande. In addition, the lack of clarity about further US monetary policy and the struggle over the US debt ceiling depressed sentiment.

Of the Dow Jones Index lost 1.8 percent that S&P 500 gave up 1.7 percent and the Nasdaq Composite 2.2 percent. Over the course of the year, however, the indices had fallen considerably more before casual buyers took hold of them in late business. The losers were clearly in the majority with 2,848 (Friday: 1,190). There were 490 (2,083) price winners, while 91 (153) stocks closed unchanged.

On the Hong Kong stock exchange, real estate values ​​had again been under massive selling pressure EvergrandeShare lost another 13.8 percent. The downturn fueled fears that Evergrande was on the verge of default. The ailing real estate company is trying to raise money to pay the numerous lenders, suppliers and investors, it said. Regulators, meanwhile, warned again that the $ 305 billion debt could pose greater risks to the country’s financial system if the company is not stabilized. However, market observers believed that a direct government bailout for Evergrande is unlikely.

China Evergrande , 30

Avatrade’s chief market analyst Naeem Aslam named China as well as other reasons for the market weakness, such as declining forecasts for company results and the uncertainty surrounding monetary policy. The market will watch out whether the Fed will give advice on tapering, the reduction of bond purchases, at its two-day meeting starting Tuesday. The US debt ceiling also remained an issue. The Congress has not yet succeeded in raising it.

“Investors have had a lot to digest lately, and the debt crisis in the world’s two largest economies (Evergrande & US debt ceiling) combined with uncertainty over the Fed’s decision this week on the timetable for a possible reduction in debt Interest rates depress the mood in the market, “said Pierre Veyret, technical analyst at Activtrades.

Oil prices under pressure

The problems in China attracted the Oil price strong with down. In addition, production in the Gulf of Mexico is normalizing after the disruption caused by the local hurricane. Of the dollar received some support from concerns about China and the possible tapering debate. The dollar index held up well.

Bitcoin
Bitcoin 42,355.00

On the other hand, the prices of cryptocurrencies fell sharply because investors withdrew from riskier asset classes. Bitcoin sagged by a good 9 percent. US bonds were meanwhile sought after as a safe haven. The yield on ten-year government bonds fell by 5.6 basis points to 1.31 percent. Of the Gold price recovered somewhat from its recent crash.

Energy stocks suffered from the falling oil price. Occidental Petroleum and Devon Energy lost 5.4 percent each, Marathon Oil 4.3 percent.

Biontech and Pfizer want to apply for approval of their corona vaccine for children aged five to eleven as soon as possible. The vaccine has been shown to be safe and effective in studies, said the two pharmaceutical companies. While Biontech fell by 5.6 percent, put Pfizer by 0.7 percent.

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