Asian Markets Nervous As Evergrande Silence Haunts

Stock markets in Asia were on tenterhooks on Friday, as no tangible progress was noted on the Evergrande scenario and no clarifications were forthcoming from the company on the payment of coupon on the debt-ridden company’s dollar denominated bonds.

The beleaguered property group’s shares on the Hong Kong Stock Exchange dropped more than 11 percent as a potential debt default sent chills through debt and equity markets in the region.

China’s Shanghai Composite Index lost 29.15 points or 0.8 percent to finish at 3,613.07 as Evergrande jitters dampened any aggressiveness in stocks. The PBoC continued its liquidity infusion, pumping in CNY 120 billion.

The Japanese benchmark Nikkei 225 jumped 609.41 points or 2.1 percent from the previous close to end Friday’s trading at 30,248.81.

Water transportation businesses were the top performers in the index. Kawasaki Kisen Kaisha spiked 11 percent, Nippon Yusen surged 8.1 percent and Mitsui O.S.K. Lines jumped 6.7 percent.

Meanwhile, data released by Japan’s Ministry of Internal Affairs and Communications showed that in August, consumer prices declined by 0.4 percent on a year-on-year basis versus the 0.3 percent decline in the previous period amidst slack demand due to the ongoing pandemic. On a month-on-month basis, the decline was 0.2 percent.

The Jibun Bank flash PMI releases for September indicated that the Manufacturing PMI fell to 51.2 from 52.7 in the prior month; the Services PMI increased to 47.4 from 42.9 in August; and the Composite PMI strengthened to 47.7 from 45.5 in August.

Hong Kong’s Hang Seng Index lost 318.82 points or 1.3 percent from previous close to finish trading at 24,192.16. The day’s high was at 24,636.64 and the low was at 24,095.79.

Ping An Insurance (Group) Company of China was the best performer in the index, climbed 2.2 percent.

Glass manufacturer Xinyi Glass Holdings was the most beaten down stock in the index, as it slid 7.3 percent.

China Evergrande group dropped 11.6 percent even as the fate of the coupon payments on dollar bonds due on Thursday remained unknown.

The Korean Stock Exchange’s Kospi Index edged down 2.34 points or 0.1 percent to close at 3125.24. The day’s trading range was between 3,119.40 and 3,146.86.

Meanwhile, reports showed that Producer Prices in South Korea rose 0.4 percent on a month-on-month basis and 7.3 percent on a year-on-year basis.

Apparel and accessories maker Shin Won Corporation and water transportation business Heung A Shipping Corporation surged close to 30 percent, while steel products maker Bookook Steel shed 10.8 percent.

Australia’s S&P/ASX200 Index closed trading at 7,342.60, dropping 27.60 points or 0.4 percent as Evergrande and Covid-19 bothered investors. The index is currently 3.8 percent below its 52-week high of 7,632.80.

Information Technology business Computershare was the lead gainer with a 5.7 percent rally. Specialty fashion retailer Premier Investments Ltd also gained more than 5 percent following upbeat results.

Gold miners lost heavily in sync with the global correction in the yellow metal’s prices. Ramelius Resources declined by 6.1 percent and topped the decliners list in the index. Perseus Mining shed 5.7 percent closely followed by Silver Lake Resources, which lost 5.1 percent.

Real Estate Investment Trust Centuria Industrial dropped 6 percent after completing a $300 million institutional placement.

The NZX50 Index of the New Zealand Stock Exchange shed 46.37 points or 0.4 percent to close at 13,259.55. At the close, the index was 2.8 percent below the 52-week high of 13643.78.

Meanwhile, reports showed that in August, New Zealand’s trade deficit widened to a record high of NZD 2,144 million from NZD 299 million in the corresponding month of the previous year. Imports surged 38.4 percent, while exports declined 0.9 percent.

Cancer diagnostics business Pacific Edge Limited rallied 6.1 percent following strong demand for its shares and consequent upsizing of the institutional placement. Rubberware company Skellerup Holdings advanced 4.2 percent.

Fisher Paykel & Healthcare Corporation dropped 3.1 percent. Synlait Milk was down 2.1 percent ahead of financial results on Monday amidst anxiety that the company would report losses.

On Thursday, the Wall Street continued its relief rally after the Fed’s announcement on Wednesday provided much needed clarity on the Fed’s tapering plans. The Nasdaq-100 had rallied 0.4 percent to close at 15,316.58, whereas the Dow Jones Industrial Average had moved up further by 1.5 percent to end at 34,764.82.

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