Stocks pull back as Evergrande fears loom, as bond yields rise By Reuters



© Reuters. FILE PHOTO: A man wearing a protective mask, amid the COVID-19 outbreak, is reflected on an electronic board displaying stock prices outside a brokerage house in Tokyo, Japan, on September 21, 2021. REUTERS / Kim Kyung-Hoon


By Lewis Krauskopf and Tommy Wilkes

LONDON (Reuters) – Global equities slipped widely on Friday as concerns over the fallout from heavily indebted China Evergrande persisted, while bond yields in Europe and the United States rose after hawkish central bank stances .

The MSCI gauge of stocks across the world fell 0.28% after three days of gains, placing little change for the week. Wall Street plunged into Friday morning’s session after European markets fell.

Concerns over whether Evergrande’s distress could spill over into the wider economy loomed over markets this week. Evergrande left global investors wondering if he would make a key interest payment, adding to fears Beijing would let foreign bondholders swallow large losses.

“If you look back this week, global markets have a lot to digest,” said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management.

“The verdict is still not delivered on how China will deal with the cracks developing in its credit markets.”

On Wall Street, the index rose 28.63 points, or 0.08%, to 34,793.45, the S&P 500 lost 1.17 points, or 0.03%, to 4,447.81 and l The index fell 80.92 points, or 0.54%, to 14,971.32.

Gains in cyclical sectors of the S&P 500 such as financials and energy offset declines in technology.

The pan-European index fell 0.75%, as weak German business confidence data also weighed on.

Investors were also evaluating a busy week of central bank meetings across the world, arguably including more hawkish positions from the US Federal Reserve, as well as UK and Norwegian policymakers.

Yields on US 10-year benchmark bonds hit their highest level since July 2. Ratings fell 14/32 for a return of 1.456%, down from 1.41% Thursday night. Benchmark yields in Germany and Italy also increased.

“A week of central bank action has shown us that policymakers are prepared to work to curb the accommodative monetary policies introduced during the pandemic,” ING analysts wrote in a note to clients.

The euro rose 0.288% and was on track for a third straight week of gains, with the euro down 0.26% to $ 1.1705. The Japanese yen weakened 0.36% against the greenback to 110.72 per dollar.

Oil prices also followed weekly increases, with a fifth straight week of gains. US crude rose 0.46% to $ 73.64 a barrel on Friday and was at $ 77.67, up 0.54% on the day.

added 0.1% to $ 1,744.60 an ounce.

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