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European Stocks Lower; Evergrande Concerns Weigh, OPEC Meeting Due

European Stocks Lower; Evergrande Concerns Weigh, OPEC Meeting Due

04 Oct 2021

European stock markets edged lower Monday, weighed by ongoing concerns over the health of property giant China Evergrande Group and ahead of an OPEC meeting.

At 3:50 AM ET (0850 GMT), the DAX in Germany traded 0.5% lower, the CAC 40 in France fell 0.5% and the U.K.’s FTSE 100 dropped 0.1%.

The main driver of these losses was worries about China’s property sector as trading in shares of debt-laden Evergrande was suspended after it missed a key interest payment for the second time last week as it struggles to refinance over $300 billion in liabilities.

“Evergrande has a $260 million offshore note maturing today, which only has a five-day “grace” period, and if no sign of payment occurs, the negative noise around the company and China’s property market will increase once again,” said OANDA strategist Jeffrey Halley in a note to clients.

Reports circulated Monday that the distressed developer will sell half of its stake in its property management unit to Hopson Development for more than $5 billion. However, local media issued conflicting reports on the deal’s price and there was no clarity as to how the funds from any sale would be allocated.

In corporate news, Petrofac  stock spiked 10% at the open but quickly reversed to be down over 2%. The oil services company is due to find out today how big a fine it will have to pay after pleading guilty to seven charges of bribery in a U.K. court.

The FTSE MIB climbed Down by  0.20% to 25,563.20. In the cash markets, the DAX  Germany was trading Down 0.11%  to 15,139.65. CAC 40  in France  fell by 0.03% to 6,515.37 while the FTSE 100  in the U.K. were up  by 0.11% to 7,034.35. ,at the time of writing.