2023-09-26 15:28:46
In Asia, the Nikkei 225 plunged 1.1% in Tokyo. The Shanghai stock market fell 0.4% and the Hang Seng fell 1.5% in Hong Kong. (Photo: The Canadian Press)
MARKET REVIEWS. Global markets were in decline Tuesday morning as investors worried regarding the health of China’s economy and a possible U.S. government shutdown.
Stock market indices at 8:00 a.m.
London added 0.2% at the start of the session in Europe, while Frankfurt yielded 0.5% and Paris 0,7%.
HAS New Yorkbefore the markets opened, the average Dow Jones industrial values slipped 0.3% and the broader index S&P 500 of 0.5%.
In Asia, the Nikkei 225 plunged 1.1% to Tokyo. The scholarship of Shanghai fell by 0.4% and the Hang Seng from 1.5% to Hong Kong. Sydney gave up 0.5% and Seoul tumbled 1.3%.
On the New York Commodity Exchange, the price of oil dropped US$1.09 to US$88.59 per barrel.
The context
On the bond market, government interest rates are stabilizing following reaching their highest levels in several years, driven by the prospect that central banks will maintain their interest rates at a higher level and for a long time.
The yield on 10-year US government bonds stood at 4.49% around 7:40 a.m., earlier it hit a new high since 2007 at 4.56% and the 30-year maturity rate rose to 4.68%, a record since 2011.
In Europe, the interest rate on the ten-year German government bond reached 2.82%, also the highest since 2011. It was worth 2.78% at 7:40 a.m.
Neil Wilson, Finalto analyst, advises to “keep an eye on Washington”, where the political deadlock between Democrats and Republicans once once more threatens to paralyze the administration, four months following coming close to default.
The absence of an agreement on the American federal budget for 2024 between Republicans and Democrats might have “a negative effect on the sovereign debt” of the country, the rating agency Moody’s warned on Monday, which points to a possible “weakness of the governance and institutions in the United States compared to other AAA-rated countries.
Neil Wilson questions the impact of this risk on the bond market. “There is perhaps a risk premium that is added, but there is also a general momentum which pushes yields upwards,” he explains without certainty.
In addition, “concerns regarding China’s economic stability have resurfaced with the worsening financial crisis within the Evergrande group,” underlines Stephen Innes, partner at asset manager SPI AM.
The ultra-indebted Chinese real estate developer Evergrande (EGRNF, -8,14%) announced on Monday a blockage in its restructuring plan intended to guarantee its survival and indicated that one of its entities has not repaid a debt installment of 4 billion yuan (547 million US dollars), reports the financial information agency Bloomberg.
Asos on discount
The action of the online clothing sales group Asos fell 1.24% in London, following announcing a turnover down 10% for its staggered annual financial year, but increased profitability.
Luxury blocked by Evergrande
Like the day before, luxury sector values are suffering in the face of Evergrande’s setbacks, which constitute a risk for “China’s economic rebound efforts”, one of the sector’s main markets, according to Stephen Innes.
LVMH (LVMHF) fell by 1.65% in Paris, Dry (KER.PA) of 2.31%. To Milan Moncler (MONRF) lost 2.91%, Richemont (CFRHF) lost 2.63% in Zurich and London, Burberry (BURBY) declined by 0.81%.
Oil decline
The prices of oil fall around 7:35 a.m. The barrel of North Sea Brent for delivery in November fell 0.86% to 92.49 US dollars ($US).
As for the barrel of West Texas Intermediate (WTI) American with the same maturity, it lost 0.68%, to US$89.08.
L’euro gained 0.07% once morest the American dollar at US$1.0600 for one euro.
The bitcoin was almost stable (-0.18%) at US$26,240.
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