Both the Dow Jones and S&P 500 staged late recoveries to finish 1.7% lower as a mounting wall of negative sentiment hits global sharemarkets. The Nasdaq suffered the biggest fall, tumbling 2.2% as the likes of Tesla (NASDAQ: TSLA) were hit by supply issues.
Evergrande woes
But it was all about China’s Evergrande (HKG: 3333), which fell another 10% as fears of default continued to grow. The largest developer in China continues to face liquidity and debt pressure with expectations it will default on a number of loans as early as today.
The group offers both property development services and ‘wealth management’ products used to fund its operations, with the latter frozen.
Despite the concerns, S&P suggests the issue, if not addressed by the government, will end up some way between ‘a tidal wave of defaults’ and ‘ripples in a pond’, with comparisons to Lehman Brothers likely overdone.
There was positive news on Pfizer’s (NYSE: PFE) vaccine treatment of children between 5 and 11, sending the share price 0.7% higher, whilst investors await more news on the ‘tapering’ program this afternoon.
US stock market movers
Here’s how other popular US stocks fared on Monday.
- AstraZeneca (NASDAQ: AZN) up 5.3%
- American Airlines (NASDAQ: AAL) up 3.0%
- Booking Holdings (NASDAQ: BKNG) up 0.7%
- Apple (NASDAQ: AAPL) down 2.1%
- Facebook (NASDAQ: FB) down 2.5%
- Amazon (NASDAQ: AMZN) down 3.1%
Following this negative lead from US markets, the S&P/ASX 200 (ASX: XJO) is set to face another red day on Tuesday. For all the latest, check out Rask Media’s ASX 200 morning report.
