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Saturday, October 16, 2021

Fear of impending China slowdown keeps markets on the edge - Mint

Last updated Monday, September 20, 2021 11:36 ET , Source: NewsService

Domestic equity markets slid nearly 1% on Monday, fear of an impending slowdown in China, world’s largest consumer of metal and mining products kept investors edgy. The BSE metals index fell by nearly 7% as investors dumped mining and metal stocks over worries that China’s Evergrande group, the world's most indebted property developer with close to $300 billion in outstanding debt was close to defaulting on bond repayments due on Thursday. Analysts said that the investors across are worried that Evergrande default would cause a cascading effect in the global markets and could be a sign that China’s massive housing market, one of the largest consumers of steel and allied products, may be headed for a prolonged decline. On Monday, India VIX or the volatility index rose14.85% during the day to close at 17.49.

Evegrande, which is China’s second largest real estate developer in the country by market share, has said that slowing home sales has led to cash flow issues and the situation is unlikely to abate in the foreseeable future. Apart from the fear of a potential Chinese contagion, the forthcoming policy meets of major central banks added to the nervousness as investors feared that monetary policy regulators would start giving cues about tapering their stimulus programmes at their meetings this week.

On Monday, the European markets fell to a near two-month low and Germany's benchmark index sank 2%. This week central banks in EU, Japan, UK, Switzerland, Sweden, Norway,...



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