Register to get unlimited Level 2

Europe close: Concerns around China Evergrande knock shares lower

By Alexander Bueso

Date: Thursday 21 Oct 2021

Europe close: Concerns around China Evergrande knock shares lower

(Sharecast News) - European shares finished lower as the spectre of China Evergrande's debt mountain resurfaced to spook investors while cost inflation worries continued to hit sentiment.
"European stock markets are down this afternoon as renewed fears about the heavily indebted Chinese property group, Evergrande, have dented sentiment," said David Madden, market analyst at Equiti Capital.

"[...]In a way, the concerns surrounding Evergrande, sort of represent the wider property market in China, as it is overstretched. Some traders fear that if Evergrande were to go into meltdown, it could trigger a brutal property crash in China - which would ripple out around the world."

The pan-European Stoxx 600 index ended down 0.08% at 469.71 with all regional bourses lower. Asian stocks fell overnight on news about the collapse of a $2.6bn sale at property developer China Evergrande.

Shares in the troubled firm fell more than 12% on Thursday, having returned to trading after a a two week suspension. China Evergrande announced in an exchange filing late Wednesday that a deal to sell a 50.1% stake in its property services business to rival developer Hopson had fallen through.

Mining shares also fell on the news on fears a default could hit China's broader economic recovery with Rio Tinto and Anglo American lower.

In other equity news, shares in Norwegian hydrogen producer Nel bucked the trend to top the Stoxx, gaining more than 21% as the company reported record third quarter revenues.

Zur Rose shares fell 7.7% despite the online pharmacy reporting a strong rise in nine-month revenues.

Computer game maker CD Projekt fell 2.4% after the company said its latest edition of Cyberpunk 2077 would now be released in the first quarter of 2022, while the next-generation version of The Witcher 3: Wild Hunt was scheduled for a release in the second quarter of 2022.

French electrical supplies distributor Rexel fell 9% despite reporting that third-quarter sales rose 12.6% year-on-year on a reported basis.

Swiss engineering and tech group ABB fell on lowering its full-year sales forecast after warning of parts shortages.

Shares in Volvo dipped after the vehicle maker beat profit expectations but warned that persisting chip shortages hampered production.

Barclays slipped even as the British bank posted a bumper third-quarter performance.

Unilever rose as the consumer goods giant beat third-quarter sales growth forecasts as it hiked prices to try to offset surging costs.


Email this article to a friend

or share it with one of these popular networks:

Top of Page