European Stocks Close Lower Amid Chinese Property Firm Debt Woes

Last Updated: Monday, September 20, 2021 12:55 PM | MT Newswires

European stock markets closed lower on Monday after China property shares declined on increasing concerns about industry debt loads and as investors looked forward to the US Federal Reserve's two-day meeting set to start on Tuesday.

The Stoxx Europe 600 was down 1.7%, the German DAX closed down 2.3%, and the FTSE 100 Index in the UK slipped 0.9%. The French CAC 40 fell 1.4% and the Swiss Market Index were down 1.7%.

Investors' concerns mounted over the contagion effect of a potential collapse of China's Evergrande, which is reportedly the most indebted real estate company in the world. China Evergrande Group is facing a cash crunch with its massive $300 billion in liabilities.

Growing investor angst about China's real estate crackdown rippled through markets on Monday, pummeling Hong Kong developers. These concerns add to mounting investor worries over rising inflation, pullback in stimulus measures and Covid-19 risks.

European Union ministers will meet on Tuesday to find a way to ease tensions with the UK government over trade issues between Great Britain and Northern Ireland, Reuters reported, citing a senior EU diplomat. The ministers, however, will not renegotiate the provisions agreed in the Brexit deal. The European Commission, which is negotiating with London, is expected to unveil plans to facilitate the movement of goods in the aftermath of Britain's withdrawal from the bloc by the end of September, according to the report.

House prices in the UK inched up 0.3% so far in September, reflecting a 5.8% spike from the year-ago period, as the housing boom begins stabilizing, Bloomberg News reported, citing Rightmove. The number of properties listed for sale in the first two weeks of September climbed 14%, while the average listed cost of home came in at 338,462 pounds sterling ($463,906), up 15 pounds from the previous record in July.

Germany's index of producer prices for industrial products rose 1.5% on a monthly basis in August, slower than the 1.9% monthly growth in July, according to data published by the national statistical agency Destatis. The current monthly reading was higher than the estimated 0.8% growth and was supported by a strong increase in energy prices.

Spain's trade deficit widened to 1.60 billion euros ($1.87 billion) in July from 980 million euros in June, the government said.

On the corporate front, Credit Suisse (CSGN.SW) was down over 7% after it said will charge investors a further $145 million in 2021 to shore up Greensill Capital, the collapse of which already caused the Swiss bank billions of dollars of losses, London's Financial Times reported. The decision drew criticism from roughly 1,000 investors of the suspended supply-chain finance funds linked to Greensill Capital, but the bank's advisers and marketing assured that the money will be invested in low-risk products, fully insured against losses, the report said.

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