It was an especially rough start to the trading week for North American markets on Monday as worries about spreading contagion from China’s troubled property market sent U.S. stocks toward their steepest decline in months.
Concerns were focused on China’s largest property developer, Evergrande Group, which seemed precariously close to defaulting on its debt obligations. Many believe that Beijing may allow Evergrande to fail, but the government will take the necessary steps to prevent contagion and maintain social stability.
Losses for the major U.S. indexes accelerated midday Monday – with the Nasdaq down by as much as 3.4% — then reversed in the final hour of trading. By the day’s close, the Dow closed down more than 600 points, the Nasdaq dropped 330, and the TSX lost 336 points, its worst trading day since January.
U.S. stocks were mixed Tuesday, with minor losses and gains, as investors looked for further signs of fallout from Evergrande Group, while eagerly awaiting news from the Fed on their plans to begin reducing their bond purchases. In Canada, the TSX posted a 90-point gain on strength in the energy sector.
N.A. markets were back in the green Wednesday as fears over Evergrande started to subside, and investors instead turned their attention to Fed officials, who signaled that the central bank could raise interest rates as early as next year – if the recovery continues at its current pace. Energy shares helped drive Wednesday’s gains once again, while financials also rallied on the hopes for higher interest rates. In Toronto, the TSX climbed 157 points as energy stocks surged more than 4%.
source https://richarddri.ca/markets-uneasy-over-possible-collapse-of-chinese-property-developer/
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