Asian markets are fluctuating, but the Evergrande Payment Report gives the market a boost.
Following a record-breaking lead from Wall Street, Asian markets fluctuated on Friday, although a report that troubled developer China Evergrande had paid interest on an overdue bond a day before the deadline eased fears of a default.
Another batch of solid earnings gave Wall Street a boost, with the S&P 500 hitting its first all-time high since September 1, as traders gain confidence that corporations are weathering a variety of concerns such as rising inflation, supply chain snarls, and slowing economic growth.
The thought that the era of cheap money is coming to an end has worked as a big drag on markets for months, thanks to rising prices around the world and central banks’ attempts to stop their financial largesse.
“Even as inflationary indications continue, the bout of investor concern has proven ephemeral,” said Geir Lode, an investment manager at Federated Hermes.
“With major indices approaching all-time highs, equity markets are back on the rise as investors shrug off recent concerns.” In the United States, earnings season has begun, and while it is still early, the initial flurry of profits has been positively received.
“The supply crunch paired with growing demand is extremely difficult, but blue-chip companies that can demonstrate their capacity to retain profitability in an inflationary environment will likely be rewarded.”
All eyes are on the Federal Reserve, which has signaled it would begin winding down its bond-buying program by the end of the year. South Korea, Singapore, and New Zealand are among the countries that have already raised interest rates, with the Bank of England anticipated to follow suit soon.
Observers believe it will make an announcement next month, but the big question is when it will raise borrowing costs. As early as mid-2022, according to some estimates.
The Asian rise has slowed in the last two days after a strong start to the week.
Shanghai, Seoul, Wellington, Taipei, and Manila saw losses, while Tokyo, Hong Kong, Sydney, Singapore, and Jakarta saw gains.
The mood in Hong Kong was boosted, however, by news that Evergrande had paid a key offshore interest payment on an offshore bond just before the deadline on Saturday.
Fears that the property behemoth could collapse, sending shockwaves across China’s economy, have spooked investors and markets, and shares have plummeted since the company resumed trading following a two-week hiatus.
However, the state-owned Securities Times reported on Friday that the corporation had sent a $83.5 million payment. The Washington Newsday Brief News is a daily newspaper published in Washington, D.C.