European stocks close lower amid debt problems of Chinese real estate companies
European stock markets closed lower on Monday after Chinese real estate stocks fell amid growing concerns over industry indebtedness and as investors anxiously awaited the two-day US Federal Reserve meeting due to begin Tuesday.
The Stoxx Europe 600 was down 1.7%, the German DAX closed down 2.3% and the UK’s FTSE 100 index slipped 0.9%. The French CAC 40 fell 1.4% and the Swiss market index fell 1.7%.
Investor concerns have grown over the contagion effect of a potential collapse of Chinese company Evergrande, which is said to be the most indebted real estate company in the world. China Evergrande Group is facing a cash crunch with its massive $ 300 billion liabilities.
Growing investor angst over China’s real estate crackdown spilled over into markets on Monday, hitting developers in Hong Kong. These concerns are in addition to growing investor worries about rising inflation, declining stimulus measures and the risks of Covid-19.
European Union ministers will meet on Tuesday to find a way to ease tensions with the British government over trade issues between Britain and Northern Ireland, Reuters reported, citing a senior diplomat from the EU. Ministers will not, however, renegotiate the provisions agreed to in the Brexit deal. The European Commission, which is negotiating with London, is expected to unveil plans to ease the movement of goods following Britain’s withdrawal from the bloc by the end of September, according to the report.
UK house prices have risen 0.3% so far in September, reflecting a 5.8% peak year-over-year as the housing boom begins to level off, reported Bloomberg News, citing Rightmove. The number of properties listed for sale in the first two weeks of September soared 14%, while the average cost of a home stood at 338,462 pounds sterling ($ 463,906), up 15 pounds per compared to the previous record in July.
The German producer price index for industrial products rose 1.5% on a monthly basis in August, slower than the monthly growth of 1.9% in July, according to data released by the statistical agency National Destatis. The current monthly reading was above the estimated growth of 0.8% and was supported by a sharp increase in energy prices.
Spain’s trade deficit widened to € 1.60 billion ($ 1.87 billion) in July from € 980 million in June, the government said.
On the corporate side, Credit Suisse (CSGN.SW) lost more than 7% after announcing it would charge investors an additional $ 145 million in 2021 to consolidate Greensill Capital, whose collapse has already caused the bank Swiss billions of dollars in losses, The Financial Times in London reported. The move drew criticism from around 1,000 investors of the suspended supply chain finance funds linked to Greensill Capital, but the bank’s advisers and marketers assured the money would be invested in low-cost products. risk, fully insured against loss, according to the report.