Equities caught up by the Evergrande risk – Boursorama

by Marc Angrand

PARIS (Reuters) – Wall Street is expected in the red and European stock markets retreat at mid-session on Friday, uncertainties over the fate of Chinese real estate giant Evergrande once again dampening risk appetite in the aftermath of a booming session .

Futures contracts on major New York indices are signaling an opening down 0.23% for the Dow Jones, 0.34% for the Standard & Poor’s 500 and 0.46% for the Nasdaq.

In Paris, the CAC 40 lost 0.89% to 6,642.48 points around 10:50 GMT. In London, the FTSE 100 gives up 0.24% and in Frankfurt, the Dax gives up 0.68%.

The EuroStoxx 50 index is down 0.84%, the FTSEurofirst 300 0.8% and the Stoxx 600 0.81%.

However, all remained up over the week as a whole, thanks in part to the favorable reception given to the markets to the latest announcements from the major central banks, led by the US Federal Reserve.

If the evolution of the Evergrande file has also helped to reassure investors in recent days, it is again considered worrying this Friday: some of the group’s offshore bondholders had not received payment of the interest on a bond loan. on Thursday’s deadline according to two sources familiar with the matter and on the Hong Kong Stock Exchange, the Evergrande share fell 11.61%.

“Evergrande alone would probably not trigger a financial crisis,” says Jennifer Hames, manager and analyst at Janus Henderson, but “the way China is handling the Evergrande file and others can have consequences: in case of mismanagement , the loss of confidence could result in contagion effects on other financial markets “.

For its part, JP Morgan lowered its recommendation on emerging markets to be “underweight”, arguing the risks associated with slowing growth and the difficulties of real estate in China.

In Europe, the only indicator of the day, the Ifo business climate index in Germany, which fell in September, also confirmed the impact on business confidence of the disruptions to the supply chains.

VALUES IN EUROPE

Most sectors of the European quotation retreated at mid-session, the most marked declines being for financial services (-1.40%) and high technologies (-1.40%)

The distribution compartment (-1.38%) is penalized among other things by the warning issued by the American Nike on the risk of shortages during the key period of the end of the year holidays: JD Sports gives up 1.77% and Zalando 2% while Adidas and Puma lose 2.75% and 1.86% respectively.

In Paris, the luxury groups LVMH (-1.93%) and Kering (-2.48%) are once again suffering from their exposure to the Chinese market.

In this unfavorable context, Antin Infrastructures Partners succeeds in its IPO: the shares of the specialist in infrastructure investment are trading at 30.42 euros, i.e. 26.75% above its IPO price. .

RATE

Bond yields remain strong after the speeches generally favorable to a gradual tightening of monetary policies held in recent days by central banks: that of ten-year US Treasuries, at 1.408%, retains most of its spectacular gains from Thursday (+13 basis points on the session) and on the European market, its German equivalent, at -0.24%, takes nearly two basis points and evolves to the highest for two and a half months.

The bond markets will watch at 14:00 GMT the intervention of Jerome Powell, the chairman of the US Federal Reserve, during a debate organized by the latter.

CHANGES

Despite the increase in risk aversion perceptible on the equity markets, the dollar remains on a downward trend against other major currencies: the index which measures its fluctuations against a benchmark basket (-0.29%) remains close to the weeklong low hit Thursday.

The euro traded without much change around $ 1.1735 while the pound gave up a small part of the ground gained Thursday after the announcements of the Bank of England.

Bitcoin (-6.21%) also suffers from the announcement by the Chinese central bank of a tightening of cryptocurrency regulations which prohibit foreign specialized platforms from providing online services in mainland China.

OIL

The oil market is hesitant but remains close to its recent two-month highs and is heading for a third consecutive positive weekly performance, thanks to persistent supply tensions in the United States, underscored by lower inventories.

Brent gained 0.17% to 77.38 dollars a barrel, the highest since July 6, while US light crude (West Texas Intermediate, WTI) was practically stable at 73.29 dollars.

(Report Marc Angrand, edited by Blandine Hénault)