Asian equity markets were largely off overnight with India off nearly -2%.
Asian equity markets were largely off overnight with India off nearly -2%. Mainland China was dragged lower by energy and materials stocks with coal stocks down significantly on policies capping the price. Coal futures on the Dalian Exchange slumped -11% overnight having fallen -35% from their October 19 th high. Inflationary fears driven by higher commodity prices are apt to see further examination from China and other countries. I would suspect OPEC is going to feel significant pressure to ramp up production. This is at odds with climate change commitments but people freezing this winter is apt to be a greater short-term priority. Sentiment wasn’t helped by escalating US-China political rhetoric nor scattered Delta outbreaks. Real estate was off in both Hong Kong and China after property developer Kaisa Group (1638 HK) fell -18.49% after its bonds were downgraded by credit rating agencies. I’ve often believed that rating agencies’ downgrade of companies during periods of financial stress only exacerbates the companies’ problems. I would suspect China might do something about addressing the vicious cycle of downgrades making it nearly impossible for companies to raise cash when they need it the most.
