Global stocks fall as worries over an Evergrande collapse resurface, while bitcoin loses grip of its all-time high
AP Photo/Richard Drew
- Global stocks fell Thursday on revived jitters about Evergrande after a $2.6 billion stake sale fell through.
- The Chinese property giant's Hong Kong shares plunged as the end of a grace period for an offshore interest payment nears.
- Bitcoin dropped from its latest all-time high near $67,000 to around $65,100.
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Global stocks slipped Thursday, as revived worries about a default by Chinese property giant Evergrande took the wind out of optimism over strong US quarterly earnings.
The benchmark S&P 500 closed just below September's record high on Wednesday, while the Dow Jones added more than 150 points.
But futures on the Dow Jones and the S&P 500 both fell 0.3% as of 4:10 a.m. ET, suggesting a slightly lower start to trading later in the day. Those on the Nasdaq, which closed lower the previous session, shed 0.2%.
In Hong Kong, Evergrande Group shares sank as much as 14% before closing 12.5% lower. Investors shed the stock after a $2.6 billion deal fell through for the sale of a 51% stake in its property services division to Hopson Development. Evergrande's shares resumed trading in Hong Kong Thursday after being suspended for more than two weeks.
Another test of the property developer looms. A 30-day grace period on a missed $83.5 million coupon payment expires Saturday, and could trigger a cross-default on other debt instruments, according to Jeffrey Halley, senior market analyst at OANDA.
"Following other Chinese developers' recent defaults, the Evergrande story and the leverage in China's property development sector could make an overdue return to the front pages this weekend and see markets up for a shaky start on Monday," he said in a note.
In Hong Kong, the Hang Seng ended down 0.4%. Tokyo's Nikkei was 1.8% lower at the close, while the Shanghai Composite rose 0.2%.
Following that lead in Europe early Thursday, the pan-continental Euro Stoxx 600 and Frankfurt's DAX each slipped 0.2%. London's FTSE 100 lost 0.4%.
Investors have been faced with persistent headwinds for stocks recently, including a global surge in COVID-19 cases, supply-chain disruptions, the prospect of a Federal Reserve rate hike, and a spike in inflation.
But a stream of positive third-quarter earnings reports for US companies has helped blot out those concerns, giving equities a lift.
After the close Wednesday, Tesla reported record revenue and profit in the third quarter, despite chip shortages and port backlogs that have prevented the electric-car maker's production from hitting full capacity.
"Tesla's ability to keep cars rolling off the production line during a supply crisis gives it the edge over rivals, but Q4 will be testing for the automaker," said Adam Vettese, an analyst at investment platform eToro.
Bitcoin, which hit an intraday peak of $66,976 on Wednesday, retreated from its fresh all-time high to about $65,172. The digital asset is up about 49% so far this month, and 124% higher year-to-date.
JPMorgan said in a Wednesday note that concerns of rising inflation are a major factor driving bitcoin's latest momentum, not the fact that the first futures-based crypto ETF just launched in the US.
Oil prices hovered around multiyear highs after the US Energy Information Administration reported that crude oil inventories were down by 431,000 barrels. Gasoline inventories were down 5.37 million barrels to their lowest levels since November 2019.
Brent crude was last down 0.9% at $84.98 a barrel, and West Texas Intermediate fell 0.7% to $82.78 a barrel.
"Continued strength in oil prices means that pressure on OPEC+ to pump more will only grow," ING analysts Warren Patterson and Wenyu Yao said.
For the day ahead, data releases include US initial jobless claims and existing home sales, and eurozone debt-to-GDP and consumer confidence.
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