A selloff in stocks continued in Asia on Tuesday amid concerns about China’s crackdown on the real-estate sector and the debt crisis at developer China Evergrande Group. Treasuries and the dollar held gains.
Japan slid after reopening following a holiday, while Australia and Hong Kong fluctuated. U.S. futures edged up, suggesting a degree of improvement in sentiment. Dip-buyers in the last hour of trading helped the S&P 500 pare some losses, though the gauge still posted the biggest drop since May.
Back home, in stock-specific news, private equity firm Carlyle Group will nearly halve its stake in SBI Cards and Payment Services Ltd for as much as $443 million, or ₹3,267.2 crore, according to deal terms seen by Mint. CA Rover Holdings, a Carlyle entity, which as of 30 June held a 6.5% stake in the credit card issuer, will sell around 32 million shares, or a 3.4% stake in the company, through a block trade.
Vodafone Group Plc and Aditya Birla Group are considering equity infusion into Vodafone Idea Ltd after the government announced a raft of relief measures for India’s struggling telecom companies, according to a Mint exclusive.
The Competition Commission of India on Monday approved acquisition of over 10% stake in Gangavaram Port Ltd by Adani Ports and Special Economic Zone Ltd. The stake will be acquired from the government of Andhra Pradesh, according to a combination notice filed with the regulator.
Treasuries retained an advance and the dollar was firm. Aside from worries over Evergrande’s ability to make good on $300 billion of liabilities, Wednesday’s Federal Reserve meeting also looms. Policy makers are expected to start laying the groundwork for paring stimulus.
The property-sector upheaval is part of President Xi Jinping’s broader clampdown on private industries under his “common prosperity" initiative to reduce economic inequality. Investors are awaiting clarity on how the debt mess at Evergrande will be resolved. China’s markets and those in South Korea remain closed for a holiday.
The risks emanating from China come as investors question stretched equity valuations, in part because the delta virus variant has slowed the reopening from the pandemic amid price pressures stoked by commodities. Markets are also digesting an outlook of reduced central bank policy support.
(Bloomberg contributed to the story)
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