Shares in Asia fell on Monday, with Hong Kong’s benchmark property shares falling after reports that police had detained staff at the wealth management business of troubled real estate developer China Evergrande.
US futures rose and oil prices rose.
Tokyo markets were closed for a national holiday.
On Friday, China’s national financial regulator announced it had approved the acquisition of the group’s life insurance arm by a new state-owned entity. On Saturday, police in the southern city of Shenzhen, where Evergrande is based, announced the arrest of some employees of its wealth management business.
Defaults on loans in the property sector from 2021 have resulted in half-built apartment buildings, disgruntled homebuyers and fears the industry’s troubles could further slow the world’s second-largest economy and shake global financial markets. Are.
Evergrande’s Hong Kong-traded shares were up 1.6% after falling early in the session. Country Garden, another developer facing huge debt obligations amid an industry slowdown and a curb on excessive borrowing, gave up early gains and fell 1.9%.
The Shanghai Composite was the only major Asian benchmark to advance, rising 0.2% to 3,123.55.
Hong Kong’s Hang Seng index fell 1.0% to 17,996.74. In Seoul, the Kospi fell 0.4% to 2,574.72. Australia’s S&P/ASX 200 fell 0.7% to 7,230.40.
On Friday, Wall Street benchmarks fell, with technology stocks weighing the most on the market.
The S&P 500 fell 1.2% to 4,450.32. The Dow fell 0.8% to 34,618.24 and the Nasdaq Composite dropped 1.6% to 13,708.33.
The market posted some gains last week after the Federal Reserve reported several healthy economic indicators ahead of its two-day meeting ending on Wednesday. That, and the Central Bank of Japan meeting, are the biggest highlights expected for this week.
US automaker stocks proved resilient after members of the United Auto Workers union walked off the job at several plants overnight. Ford slipped 0.1% and General Motors rose 0.9%. Stellantis shares rose 1.9% in trading on Italy’s Milan Stock Exchange.
Investors’ attention is sure to remain on the Fed meeting. The central bank raised rates aggressively through 2022 and 2023 in an effort to tame inflation, but maintained interest rate levels at its last meeting. Inflation is generally falling towards the central bank’s target of 2%.
Consumer-level inflation rose more than expected in August, but higher gasoline prices were the biggest driver. Oil prices are climbing over the summer after Saudi Arabia decided to continue cutting production. This has increased concerns about rising gasoline prices and rising inflation.
Traders are largely betting that the Fed will keep interest rates steady. They also expect the central bank to keep rates steady for the rest of the year. The Fed has said it is willing to continue raising rates if it deems it necessary to continue fighting inflation.
In other trading Monday, benchmark U.S. crude oil rose 86 cents to $91.63 a barrel in electronic trading on the New York Mercantile Exchange. On Friday it rose 61 cents to $90.77 per barrel.
Brent crude, the pricing standard for international trade, was up 73 cents at $94.66 a barrel.
The US dollar weakened to 147.59 JPY from 147.72 yen. The euro slipped to $1.0664 from $1.0666.
Elaine Kurtenbach, The Associated Press