Rude awakening this morning for the financial centers. The main lists are moving at a sharp loss in the wake of the troubles of the Chinese brick giant Evergrande, the most indebted real estate company in the world that risks not repaying its investors. Some payment obligations will already expire this week and the fear is that default is approaching. Meanwhile, the company’s stock today loses more than 17%, hitting the lows of the last 11 years on the Hong Kong market.
The story is also dragging down the insurance sector with many listed companies, such as Ping An (-7%), which are exposed to the Asian home market while the eyes of the operators are already focused on the Chinese banking sector which is trembling for the crisis of the real estate giant and threatens to infect all global markets.
Evergrande has meanwhile sought to increase its liquidity to repay banks, suppliers and investors, while authorities have signaled that the company’s $ 305 billion liabilities could trigger widespread risks for China’s financial system if they are not stabilized. .
The Chinese threat is hitting all the lists. In the early hours of trading, European equities are down to nearly two-month lows. The Milan benchmark index, FtseMib, lost more than two percentage points in the middle of the morning (-2.26%). All the blue chips of the Milanese list are in the red with deep drops of over 2% for example for Generali and Unicredit, Banca Intesa, up to Eni. Similar trend also for the Dax in Frankfurt (-2.14%) while in Paris the Cac40 is behind by 2.12%.
It’s not just China that keeps operators in suspense. Investors are also looking at central banks, which could send signs of a reduction in their stimulus programs during the various meetings this week. The attention is particularly high on the American Fed, indications on the timing of the “tapering” could arrive on Wednesday, even if the expectations of an announcement have moved forward, in November or December.
In the context of generalized uncertainty, Italy’s debt also moves, even if only marginally. The yield of the Italian ten-year BTP rose slightly to 0.7343% from 0.718% on Friday. The BTP / Bund spread rose to 102, from 99.6 points at Friday’s closing.