Asian stocks rally, but Evergrande’s nervousness keeps investors on the lookout
- HK resumes trade after holiday, Evergrande soars 30%
- Fed says it will likely start declining as early as November
- Firmer dollar, gold is losing ground
- The Japanese stock exchange closed for a public holiday
HONG KONG, Sept. 23 (Reuters) – Asian stocks posted cautious gains on Thursday, supported by positive news from cash-strapped developer China Evergrande Group (3333.HK), as the dollar held close to ‘a peak a month after the US federal government. Reserve took a hawkish tilt overnight.
However, nerves were still on edge about the future of Evergrande and the country’s real estate industry as a whole, with a major test looming on Thursday when $ 83.5 million in dollar bond interest payments by the company were due.
“It’s still a long way to go to resolve this issue,” said Kerry Craig, global markets strategist at JP Morgan Asset Management.
“You will see some of the immediate fears of a huge collapse and contagion start to fade, but that will always be a problem that arises as the real estate market and construction are such an important part of the Chinese economy.”
As Hong Kong markets emerge from the holidays, Evergrande shares jumped 30% to mark their best day as its chairman sought to reassure investors and as the company’s unit said on Wednesday it had “resolved” the payment of a coupon on an onshore bond. Read more
Its stock slashed gains to trade up 13%, lifting the Hong Kong benchmark (.HSI) by 0.7%, while Asia’s largest equity index MSCI- Pacific outside Japan (.MIAPJ0000PUS) rose 0.5%.
Elsewhere, the Chinese blue chips (.CSI300) gained 0.7%, the Australian benchmark (.AXJO) rose 1%, and the South Korean Kospi (.KS11) fell 0.6% after coming back from a three-day hiatus to catch the World Falls earlier in the week. Japanese stock markets have been closed for a vacation.
US equity futures, the S&P 500 e-minis, rose 0.3%.
Fears that Evergrande might meet its obligations rocked global markets earlier this week, with investors worried about the ripple effect on banks and real estate companies as the giant developer defaults on its mountain. of debts.
Concerns eased somewhat on Wednesday when the People’s Bank of China injected 90 billion yuan ($ 13.9 billion) into the banking system. Read more
US Federal Reserve Chairman Jerome Powell also downplayed the global impact of the Evergrande saga and said it was more relevant to the Chinese economy. Read more
In another key event for the markets, the Fed said overnight that it would likely start cutting its monthly bond purchases as early as November and signaled that interest rate hikes could follow faster than expected.
“The most striking part of what we learned from the Fed was that the market was accepting it very well,” said Craig of JP Morgan Asset.
All three major U.S. stock indexes closed 1% higher, not far from what they were before the Fed’s announcement, and U.S. Treasuries yields were little changed at 1.3023% after hovering for the night.
The dollar rose after the Fed chairman’s remarks to a month high of 93.526 against a basket of currencies, notably gaining against the euro and yen, but stopped to catch its breath in Asian hours.
US crude rose 0.1% to $ 72.33 per barrel, while Brent crude rose 0.2% to $ 76.23 per barrel.
Spot gold fell 0.3% to trade at $ 1,763.32 an ounce.
Reporting by Alun John; Editing by Richard Pullin and Muralikumar Anantharaman
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