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As pressure builds on China's tech and real
estate moguls and its economic growth falters, markets worldwide
are starting to get uneasy. But it's Europe, with its
export-oriented economy and supercharged luxury stocks reliant
on affluent Asian shoppers, which is likely to feel the most
genuine pain.
The STOXX 600 index has fallen 1% so far in September, twice as
much world stocks, and while Europe broadly is still in favour
with investors and research analysts, the index has slipped all
the way down to July lows.
Wall Street's strength overnight could trigger a relief bounce
this morning, but the China woes are far from over.
The worsening crisis at China's No. 2 property developer
Evergrande has sent its shares to decade lows, pushed Asian
stock markets to their fourth day of losses. Trading in
Evergrande bonds has been suspended. And virus outbreaks are
clouding travel plans during next week's Mid-Autumn Festival.
Europe Inc faces internal woes too. Soaring power prices have
prompted Spain to cap energy bills and Italy said on Thursday it
plans "short-term measures" to offset the price rises. Worries
are other governments could resort to similar measures -- at the
expense of utility firms.
There's some market support from signs U.S. inflation has peaked
and the world's biggest economy is in robust shape. Retail sales
will be eyed later on for more clues on the health of the
world's largest economy.
Graphic: Morning Bid -
https://fingfx.thomsonreuters.com/
gfx/mkt/jnvweywoxvw/morning%20bid.JPG
Key developments that should provide more direction to markets
on Thursday:
Japan's hot exports growth cools as COVID-19 hits supply chains
Philip Morris seals deal to buy UK's Vectura with 75% stake
tendered; French utility Veolia launches 2.5 bln euro capital
increase[nL1N2QI0D1; Vivendi paves way for Lagardere takeover
German car registrations Aug
ECB Speakers: Christine Lagarde
Norges Bank Governor Oystein Olsen speaks
Egypt central bank meeting
U.S. weekly jobless claims/Philly Fed September
U.S. Retail sales/business inventories
(Reporting by Danilo Masoni; editing by Sujata Rao)
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