Stock markets mostly fell Thursday as fresh concerns about fallout from China’s Evergrande saga hit sentiment.
Bitcoin retreated from its record high reached Wednesday, while oil prices dropped more than two percent.
Stock markets in Asia and Europe fell into the red as Chinese giant Evergrande said the planned sale of its property services arm had collapsed.
Resuming stock market trading after a more than two-week suspension, Evergrande also warned that it could not guarantee meeting its debt obligations, reigniting fears of contagion.
Shares in the embattled company tanked Thursday.
Justin Tang, of United First Partners, warned that “without the infusion of cash from the sale” of assets, the firm’s share price “is going to take the elevator down”.
“China’s Evergrande crisis reared its ugly head again,” noted AJ Bell financial analyst Danni Hewson.
“This hit stocks with Chinese exposure, most notably the mining sector.”
There had been hope that the $2.58-billion sale of a 50.1 percent stake in Evergrande Property Services Group would provide it with much-needed capital to service its debts.
“Any hope that the company would find the funds to make an offshore coupon payment by the end of the grace period this weekend is surely now gone which could trigger a default unless the terms are renegotiated,” said market analyst Craig Erlam at currency trading platform Oanda.
The news will again raise worries about the impact on the wider economy, with the property sector accounting for a huge chunk of China’s gross domestic product and several other developers recently failing to meet debt payment deadlines.
Data this week showed the country’s economic growth was slower than expected in the third quarter.
Still, top officials at the People’s Bank of China and regulators have insisted the fallout from the crisis could be contained.
On Wall Street, the Dow pulled back a day after it hit a record intraday high.
The tech-heavy Nasdaq Composite and S&P500 both flipped around in morning trading amid a continuing flow of mostly positive earnings reports and a pandemic-era low in unemployment claims.
The S&P 500 rose to just a handful of points shy of an all-time high before turning lower.
Elsewhere, bitcoin shed 3.5 percent to $63,694.36.
The world’s leading cryptocurrency struck a record high of $66,976 on Wednesday after a financial instrument dedicated to the unit made a successful debut on the New York Stock Exchange.
“We may be seeing a little profit-taking in bitcoin,” said Oanda’s Erlam, who added that “in the longer term it seems there’s plenty of support for the rally”.
The digital unit has surged more than 50 percent over the past month and an eye-watering 450 percent in one year.
Meanwhile, the Turkish lira touched new lows against the dollar after Turkey’s central bank lowered its policy rate by two percentage points to 16 percent despite rampant inflation running at close to 20 percent.
Economists interpreted the rate cut as confirmation of the central bank’s loss of independence from President Recep Tayyip Erdogan, who has pushed for low interest rates to encourage economic growth.
“The rate cut has exacerbated hyperinflation worries and investors decided to further abandon the TRY as a result,” said market analyst Fawad Razaqzada at ThinkMarkets.
Key figures around 1530 GMT
New York – Dow: DOWN 0.4 percent at 35,454.26 points
EURO STOXX 50: DOWN 0.4 percent at 4,155.92
London – FTSE 100: DOWN 0.5 percent at 7,190.30 (close)
Frankfurt – DAX: DOWN 0.3 percent at 15,472.56 (close)
Paris – CAC 40: DOWN 0.3 percent at 6,686.17 (close)
Hong Kong – Hang Seng Index: DOWN 0.5 percent at 26,017.53 (close)
Tokyo – Nikkei 225: DOWN 1.9 percent at 28,708.58 (close)
Shanghai – Composite: UP 0.2 percent at 3,594.78 (close)
Euro/dollar: DOWN at $1.1643 from $1.1654 at 2100 GMT
Pound/dollar: DOWN at $1.3809 from $1.3825
Euro/pound: UP at 84.30 pence from 84.26 pence
Dollar/yen: DOWN at 113.76 from 114.33 yen
Brent North Sea crude: DOWN 2.3 percent at $83.88 per barrel
West Texas Intermediate: DOWN 2.4 percent at $81.39 per barrel
burs-rl/cw
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