On Tuesday, Asian stocks were neutral as fears about Evergrande, a Chinese property developer, and its influence on global markets remained.
The Nikkei 225 index in Japan finished 2.2 percent lower, but the Hang Seng index in Hong Kong recovered earlier losses to finish 0.5 percent higher. Concerns have been raised that Evergrande, a large Chinese property developer, will be unable to satisfy interest payments on debts totaling more than $300 billion.
Regulators have expressed concern that it may have an impact on the country’s financial system. Investors are concerned that this could affect large banks that are exposed to Evergrande and similar enterprises, generating worldwide market contagion. The market concerns come as the global economy continues to recover from the effects of the coronavirus. On Monday, the Dow Jones index in the United States fell 1.8 percent. Similar drops were seen in Europe, with Germany’s Dax index falling 2.3 percent and France’s Cac 40 falling 1.7 percent.
On Monday and Tuesday, mainland China’s major stock exchanges were closed for the traditional mid-Autumn festival.
Despite recent losses, Japan’s Nikkei has increased by nearly 30% year on year.
Investors are also concerned that the US Federal Reserve will confirm plans to reduce support for the US economy this year during its meeting on Tuesday and Wednesday.
Global stock markets have risen as economies have reopened and central banks have pumped trillions of dollars into the economy to help it develop.
However, if support is withdrawn at a time when the Delta variety of coronavirus continues to stymie healing, there are fears of deterioration.
Other analysts, on the other hand, downplayed fears of a sell-off, pointing out that September is traditionally a weak month for equities.
“Overall, September is continuing to live up to its terrible reputation as the year’s worst month. But that doesn’t rule out the possibility of a comeback. “ TD Ameritrade’s top market strategist, JJ Kinahan, suggested as much.