The real estate company has been struggling with payment difficulties for weeks.
(Photo: Reuters)
Frankfurt Stock prices in Asia eased this morning amid concerns over China’s real estate sector. Trading in shares of the heavily indebted company China Evergrande was suspended on the Hong Kong Stock Exchange after the company missed a major interest payment on its offshore debt for the second time last week.
“The biggest problem isn’t Evergrande’s default, it’s the environment that led to the company’s decline. The authorities regulate home loans and lending to real estate companies. The markets are already looking for the next evergrande, ”said Kazutaka Kubo, senior economist at Okasan Securities. “The risk that Evergrande’s problems spill over to the entire Chinese real estate sector is increasing.”
The broadest MSCI index for Asia Pacific stocks outside of Japan, MIAPJ0000PUS, fell 0.3%. The index thus recorded its first quarterly decline in six quarters. Hong Kong led the decline with the Hang Seng Index .HSI down 1.9%. Japan’s Nikkei .N225 lost previous gains, trading 1.4% lower to a one-month low of 28,375. The Chinese mainland stock exchanges will remain closed until Thursday due to the national holiday. The South Korean markets will also remain closed on Monday.
The Tokyo stock exchange initially showed itself to be weaker on Monday. The Nikkei Index, which comprises 225 values, was 1 percent lower at 28,498 points. The broader Topix index fell 0.6 percent and stood at 1974 points.
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In Asian foreign exchange trading, the dollar gained 0.1 percent to 111.10 yen and was down 0.4 percent to 6.4452 yuan. In relation to the Swiss currency, it was quoted hardly changed at 0.9308 francs. At the same time, the euro remained almost unchanged at 1.1591 dollars and rose 0.1 percent to 1.0791 francs. The pound sterling lost 0.1 percent to $ 1.3538.
More: For weeks, the crisis surrounding the highly indebted real estate company has been worsening. It is now becoming apparent what a rescue of the group could look like.