Evergrande weighs on European shares
On Friday European shares lost ground but held their gains for the week as uncertainty around the fate of debt-ridden China Evergrande weighed on investor sentiment.
The STOXX 600 index lost 0.78% after a three-day run of gains. Britain's FTSE 100 and Germany's DAX also weakened.
Even so, European shares look like they will close the week higher despite Monday's sharp selloff, as investors became more positive on the outlook for global growth after the U.S. Federal Reserve policy meeting and on hopes the Evergrande crisis could be contained.
There was a different scenario in Asia where MSCI's broadest index of Asia-Pacific shares outside Japan was stable on the day but has dropped 0.7% this week and is set for its third weekly loss in a row. Japan's Nikkei gained 2%, catching up with global gains after the market was closed for a public holiday. Chinese blue chips recovered most of their early losses after a cash input from the central bank brought its weekly injection to 270 billion yuan ($42 billion) - the largest since January.
Global investors have been concerned as debt payment obligations of Evergrande, under a $305 billion mountain of debt, led to fears its malaise could lead to risks to China's financial system.
The Fed said on Wednesday it could start tapering its monthly bond purchases by as soon as November, and that interest rates could rise quicker than expected by next year. The November deadline was largely priced in by markets.
Oil prices rose for a fourth straight day due to global supply concerns following powerful storms in the United States. Brent crude gained 0.4% to $77.56 a barrel and U.S. oil was up 0.2% to $73.46 a barrel. Gold regained some ground on Friday, with the spot price rising 0.7% to $1,754 per ounce. It fell over 1% the day before as higher yields hurt the non-interest bearing asset.
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.