Stocks today: FTSE 100 dips as Evergrande woes weigh
10:06, 21 October 2021
UK stocks inched lower on Thursday morning, as global equity sentiment was soured after Chinese property giant Evergrande resumed trading but failed to close a $2.6bn (£1.9bn) asset sale.
Fears of a further default on Evergrande’s $305bn debt emerged, in anticipation of the next deadline on Monday.
European stocks reflected the downbeat sentiment, with the Euro STOXX 50 Index falling in morning trade. Rising energy prices and the conflict between Poland and the EU Commission over EU law also contributed to market jitters.
Overnight in Asia, Hong Kong’s Hang Seng Index suffered a drop of 0.45%, due to shockwaves from Evergrande’s troubles. However, the US market had a more positive outlook with the S&P 500 Index gaining 0.37%.
Why are markets down today?
The market is primarily risk-off today due to Chinese property dealer Evergrande resuming trading after a break of a fortnight but still failing to make debt payments and pulling down the market.
Evergrande’s collapse would be the biggest corporate failure in China and could signal the imminent fall of the Chinese real estate market. The potential global shockwaves from this event have led to a rise in market anxieties and lowered investor sentiment.
What is your sentiment on UK100?
Market highlights
- The FTSE 100 dipped 0.42% on Thursday morning, as fears about Evergrande defaulting became more apparent
- The Euro STOXX 50 also fell 0.44%, amidst ongoing tension between the EU commission and Poland
- Brent crude oil traded at $85.16, dropping 0.77%, abating fears of oil reaching above $90 for the moment.
Market sentiment: The Fear-Greed Equation
- The CBOE Volatility Index, or VIX, a measure of expected fluctuations in US stocks, rose to 15.93, indicating worsening market anxieties and lowering investor confidence
- The US Dollar Index also rose to $93.65, reflecting a rise in demand for safe haven assets
- The US 10-Year Bond Yield Index however, dipped slightly, to $1.659, which could indicate a stabilisation in interest rate hike fears.
Top stock gainers UK and Europe
- In the UK, the top performing sectors were health technology, transportation and finance
- Hikma Pharmaceuticals, International Consolidated Airlines Group and St James's Place led gains in their respective segments
- In Europe, the best performers were health technology, investments and pharmaceuticals
- Philips, Prosus and Sanofi were the top gaining companies in their respective segments.
Top stock losers UK and Europe
- On the FTSE 100, the worst performing sectors were non-energy minerals, producer manufacturing and electronic technology
- Rio Tinto, Smiths Group and BAE Systems were the worst performing companies in their respective segments
- On the Euro STOXX 50, the segments which took a hit were chemicals, capital markets and entertainment
- Linde, Deutsche Borse and Flutter Entertainment led their respective sectors in losses.
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