The Real Contagion is Here
Futures Slide, Europe Tumbles As Evergrande Contagion Shockwave Goes Global
By Paul Preston, AENN
Its on the real financial “viral” contagion has arrived. Our own Chriss Street warned on the New California Public Conference Call Wednesday September 15, 2021 that Evergrande was going to stun the markets world-wide. On lasts night NCS Call he stated the contagion was going to show itself this morning as all futures indexes were slammed down. Well here it is.
Markets in China, Japan, Taiwan and South Korea were closed for holidays. Deepening concerns over Evergrande’s debt woes, along with China’s ongoing corporate crackdowns, have rattled markets. Traders also mentioned that President Xi Jinping’s drive to create “common prosperity” may spill over into the property market.
At 24,099 points, Hong Kong’s broader Hang Seng index has closed at its lowest level since October 2020.
“We are seeing fears of contagion effect from China Evergrande playing out,” said Jun Rong Yeap, a market strategist at IG Asia. “With China closed today, the limited avenue is bringing the risk-off movement to be focused on the H.K. market, which may aggravate the selloff.” The MSCI Asia Pacific Index’s decline extended its 1.6% loss last week. The gauge is up just 0.7% for the year, compared with an 18% climb in the S&P 500 Index.
This Is How Contagion From Evergrande’s Default Will Spread To The Rest Of The World
Shares in Ping An, China’s biggest insurer, fell as much as 8.4 per cent on Monday, after closing down 5 per cent on Friday as it was forced to disclose that it held no exposure to Evergrande debt or equity. Ping An has Rmb63.1bn ($9.8bn) of exposure to the country’s real estate stocks across its Rmb3.8tn of insurance funds.
