Markets pressured by worries over China’s property sector and a US government shutdown
US stocks kept retreating on Friday to see the fourth straight day of losses as investors continued to digest a message from the Federal Reserve that it intended to keep interest rates higher for longer. Adding to negative and cautious tone among investors, concern grew around a government shutdown. The Dow Jones slid 0.31%, the S&P 500 shed 0.23%, and the Nasdaq Composite slipped 0.09%. for the week, the S&P 500 and the technology-heavy Nasdaq Composite have dropped 2.9% and 3.6%, respectively, while the Dow slid 1.9%.
Asian equities were mostly lower on Monday after Wall Street finished its worst week in six months. Regional markets were pressured by worries over China’s property sector and a US government shutdown. China Evergrande sank more than 17% after announcing it was unable to raise further debt due to an investigation into one of its affiliates. Against this backdrop, the Shanghai Composite index declined 0.54% and Hong Kong’s Hang Seng lost 1.76%. In Seoul, the Kospi lost 0.49%. Bucking the trend, Australia’s S&P/ASX 200 turned positive after an early decline to add 0.11%, while Japan’s Nikkei 225 rallied nearly 1%.
In Europe, stocks opened in negative territory, taking their cue from Asian markets, with the pan-European Stoxx 600 index down 0.3% in early deals. Leading losses, mining stocks dropped nearly 2%. US stock index futures bounced marginally in early pre-market trading, but investors stay alert, especially as China Evergrande Group decided to cancel a creditor meeting. Also, market participants are nervous at the start of a new trading week, with a number of Fed officials speaking at public events.
Meanwhile, the US dollar holds steady just below multi-month peaks registered last week around 105.80. The USD index keeps clinging to the upper end of the extended trading range, struggling for direction around 105.50. Should Treasury yields resume the ascent this week, the greenback may see fresh March highs, supported by risk aversion across the financial markets. On the downside, the nearest support now arrives around 105.30, followed by the 105.00 figure.