World shares tumble as China Evergrande contagion fears rise
- MSCI global stock index will fall to the highest level since Oct 2020.
- Wall Street fell over 2% as European shares fell by 3%.
- US 10-yr yields fall, gold up as safe havens see bid bid.
- The Fed and other central banks on tap later in the week - the rest of the weekend.
The interest rate fell on Monday, and the dollar plunged as the debt crisis continued to escalate, causing fears of spillover risks to the economy. Moreover, the investor worry is awaiting a busy week of central bank meetings
The indexes of the major major index in the United States (.MIWD00000PUS) went up a bit, sagging 2%, the largest ever ever trend in one-day fall since October 2020
The United States Treasury, which became a safe place, has climbed progressively, and with regaining in price, gaining out yields and stealing gold.
Shares in Evergrande (3333.HK), which had been scrambling to raise funds to pay its many lenders, suppliers and investors, closed down 10.2% at HK$2.28.
If its debts are not stabilized, it could spark broader risks to China's financial system. Read more.
Investors are concerned that Evergrande is going to become a domino, said Jack Ablin, chief investment officer of Cresset Capital Management. Investors tend to sell first and look at it later.
The Dow Jones Industrial Average (.DJI) fell 787.6 points, or 28%, to 33,797.28, the S&P 500 (SPX) lost 101.41 points or 2.29%,
The most economically sensitive sectors, including financials and energy sectors (.SPSY) and financial services () were particularly hit. read more about this article.
The pan-European STOXX 600 index (.STOxX) lost 1.67%, with the mining stocks (.sXPP) sliding.
The selloff on Monday saw a cumulative $2.2 trillion worth wiped off the global market capitalization from 97 trillion hit on Sept. 6, according to Refinitiv data.
The ongoing misfortune over Evergrande looms as the equities pullbacks have arose recently, and the problem of coronavirus cases is being solved pending the closure of the capital markets,
The Federal Reserve will meet on Tuesday and Wednesday as a window for investors to decide when its bond purchases will begin.
Investors were watching other central bank meetings, such as Brazil, Britain, Hungary, Indonesia, Japan, Norway, Philippines, South Africa, Sweden, Switzerland, Taiwan, and Turkey.
The dollar index rose 0.061%, the euro unchanged at $1.1725. read more.
The offshore Chinese yuan weakened to its lowest level in nearly a month, compared to the U.S. currency.
"We are seeing a classic flight to the dollar until we know whether or not it will be an orderly or disorderly resolution to Evergrande," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
Benchmark 10-year notes last rose 22/32 in price to yield 1.2972%, from 1.37% late on Friday.
The iShares exchange-traded fund tracking high-income corporate bonds (HYG.P) fell by 0.5%.
Oil prices fell but drew support from signs that some U.S. Gulf output will remain offline for months due to storm damage. read more about it.
The crude price fell 2.18% to $70.40 per barrel, and Brent was at $73.99, down 1.79% on the day.
Spot gold added 0.4% to 1,761.29 an ounce, rising off of a month low.