The Evergrande file revives risk aversion – archyde

by Claude Chendjou

PARIS (Reuters) – European stock markets ended lower on Friday and Wall Street traded on a hesitant note in mid-session as equity markets were weighed down by rising uncertainties over the fate of Chinese real estate giant Evergrande , which urges investors to be cautious.

In Paris, the CAC 40 ended down 0.95% to 6,638.46 points. The British Footsie ended down 0.38% and the German Dax down 0.72%.

The EuroStoxx 50 index lost 0.87%, the FTSEurofirst 300 0.89% and the Stoxx 600 0.9%.

Over the week, however, the CAC 40 gained 1.03% and the Stoxx 600 0.31%, thanks to the latest announcements from central banks which helped reassure investors of their prolonged support for the economy and a only very gradual place of a possible tightening of their monetary policies.

Regarding the Evergrande case, fears were rekindled by the non-payment, according to sources, of interest on a bond loan to certain creditors by the deadline of Thursday.

“Evergrande on its own 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 “.

On the Hong Kong Stock Exchange, Evergrande shares plunged again, by 11.61%.

In terms of economic indicators, the Ifo business climate index in Germany showed a further deterioration in confidence in September, due in particular to tensions in supply chains.

VALUES

In Europe, most sectors ended up in the red, the most marked declines being for new technologies (-1.54%), financial services (-1.29%) and distribution (-1.78% ).

This compartment was penalized, among other things, by the warning issued by the American group Nike on the risk of shortages during the crucial period of the end of year celebrations. In the wake of the sports equipment supplier, its European competitors Adidas and Puma lost 2.46% and 3.06% respectively. Specialist distributors like JD Sports and Zalando fell by 2.48% and 3.19% respectively on the London Stock Exchange and that of Frankfurt.

In Paris, the luxury groups LVMH (-1.71%) and Kering (-2.98%), particularly exposed to China, once again suffered from the uncertainties linked to the Evergrande file. Kering finished at the bottom of the CAC 40.

Against the trend, the Antin Infrastructures Partners share ended with a gain of 26.25% for its first day of trading.

A WALL STREET

At the time of the close in Europe, the Dow Jones and Standard & Poor’s 500 were virtually unchanged after opening lower, while the Nasdaq was down 0.46%.

At values ​​in New York, Nike is the main brake on the Dow and the S & P-500 with a decline of 6.34% linked to the lowering by the group Thursday of its sales forecasts for the 2021-2022 fiscal year.

Sector-wise, most of the major S & P-500 indices are in the red or showing modest gains. The banks index (+ 1.36%) stood out, however, thanks to the rise in bond yields. Energy and financials are also on the rise.

CHANGES

At foreign exchange rates, the index measuring the fluctuations of the dollar against a basket of benchmark currencies does not benefit from risk aversion and falls slightly by 0.15%.

Bitcoin, down 6.13%, suffers from the announcement of a new turn of the screw from Beijing on the regulation of cryptocurrency platforms.

RATE

In the bond market, the yield on ten-year US Treasuries rose nearly four-three basis points to 1.4474%, still supported by the prospect of a gradual tightening of monetary policy by the US Federal Reserve. Its president, Jerome Powell, who took part in a debate organized by the institution, made no new comments on the forecasts given by the Fed on Wednesday.

In Europe, the German 10-year Bund, the benchmark in the euro zone, ended up three basis points at -0.227%. Its French counterpart took 3.7 basis points to 0.1150%.

OIL

In the oil market, Brent continued to advance, gaining 0.79% to $ 77.86 per barrel, while US light crude rose 0.76% to $ 73.85, prices being supported by pressures on supply in the United States.

(Report Claude Chendjou, edited by Bertrand Boucey)