After an Evergrande-driven downturn, US and European stocks have rebounded.

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After an Evergrande-driven downturn, US and European stocks have rebounded.

Fears about the possible collapse of Chinese property giant Evergrande spurred a sell-off across global markets on Tuesday, but US and European equities recovered.

As Wall Street began, the Dow Jones Industrial Average, the tech-heavy Nasdaq, and the S&P 500 were all roughly 0.4 percent higher.

In afternoon trade in Europe, London stocks rose 1.1 percent, while Frankfurt and Paris gained 1.4 percent each.

Major European stock indexes fell between one and two percent on Monday, mirroring Wall Street’s losses.

In Asia on Tuesday, Hong Kong ended the day up 0.5 percent, while Tokyo fell 2.2 percent and Shanghai was closed for a Chinese public holiday.

According to Briefing.com analyst Patrick O’Hare, “the early contention is that yesterday’s reported worry that a debt default by China’s Evergrande could generate systemic risk has been tempered.”

“Many pundits have suggested Evergrande isn’t having a ‘Lehman moment,’ and reports that Evergrande’s Chairman has stated that the property developer plans to fulfill its responsibilities,” O’Hare added, alluding to the collapse of the Wall Street major firm during the 2008 financial crisis.

In a message to employees, Evergrande founder Xu Jiayin stated that he “firmly thinks Evergrande will be able to come out of the darkest time soon.”

On the corporate front, shares in Universal Music, the world’s largest record label with a roster of megastars ranging from The Beatles to Taylor Swift, soared on their initial public offering, valuing the corporation at more than $50 billion.

Fawad Razaqzada, a ThinkMarkets analyst, said mood improved when Washington indicated it will ease Covid travel limits on all flying travelers in November if they are properly vaccinated and submit to testing and contact tracing.

The announcement helped the tourism industry.

“The improved attitude reflects hope about travel returning to some form of normalcy after the US declared it will let fully vaccinated persons to travel to the US,” Razaqzada explained.

Markets are also dealing with a projected tightening of US monetary policy, increased Covid infections, a sluggish global economy, rising inflation, and a looming oil shortage.

The OECD warned of a “uneven” global economic rebound on Tuesday, lowering its global and US growth predictions for 2021 while lifting its outlook for Europe.

In Asian trade, Hong Kong-listed real estate businesses eked out gains after taking the brunt of the selling on Monday, losing more than 10% of their value.

Evergrande, on the other hand, has dropped by more than 80%. Brief News from Washington Newsday.

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