Global stock indexes fell on Thursday as renewed fears over the default of Chinese property giant Evergrande dampened optimism over strong US quarterly earnings.
The S&P 500 index closed just below September's record high on Wednesday, while the Dow Jones index added more than 150 points.
But the Dow Jones and S&P 500 futures were down 0.3% as of 4:10am ET, suggesting a slightly lower start to trading later in the day. Nasdaq shares, which had closed the previous session lower, were down 0.2 per cent.
In Hong Kong, Evergrande Group shares fell 14% before closing down 12.5%. According to Vietnam Exness, investors abandoned the shares after a $2.6 billion deal to sell a 51 per cent stake in its real estate services division to Hopson Development fell through. Evergrande shares resumed trading in Hong Kong on Thursday after being suspended for more than two weeks.
Another test of the property developer is looming. According to Geoffrey Halley, senior market analyst at OANDA, the 30-day grace period for the $83.5 million missed coupon payment expires on Saturday and could trigger a cross-default on other debt instruments.
"Following recent defaults by other Chinese developers, Evergrande's history and leverage in China's development sector could return to the front pages this weekend and cause a shaky start to markets on Monday," he said in a note.
In Hong Kong, the Hang Seng was down 0.4 per cent. Tokyo's Nikkei was down 1.8 per cent at the close of trading, while the Shanghai Composite index was up 0.2 per cent.
Following that lead in Europe, the pan-continental Euro Stoxx 600 and Frankfurt's DAX fell 0.2% early Thursday morning. London's FTSE 100 lost 0.4%.
Investors have faced persistent headwinds for equities recently, including a global spike in COVID-19 cases, supply chain disruptions, the prospect of a Federal Reserve rate hike and a spike in inflation.
But a spate of positive third-quarter earnings reports from US companies helped dispel those fears, lifting shares higher.
After Wednesday's close, Tesla reported record third-quarter revenues and profits despite a chip shortage and delayed ports that prevented the electric car maker from reaching full capacity.
"Tesla's ability to keep cars off the assembly line during a supply crunch gives it an edge over rivals, but the automaker will be tested in the fourth quarter," said Adam Vettese, an analyst at investment platform eToro.
Bitcoin , which hit an intraday peak of $66,976 on Wednesday, retreated from its new all-time high to around $65,172. The digital asset is up about 49 per cent this month and 124 per cent since the start of the year.
JPMorgan said on Wednesday that fears of rising inflation were the main factor driving bitcoin's latest momentum, not the fact that the first futures-based crypto-ETF had just been launched in the US.
Oil prices fluctuated near multi-year highs after the US Energy Information Administration reported that crude inventories fell by 431,000 barrels. Gasoline stocks fell by 5.37 million barrels to their lowest level since November 2019.
Brent crude was last down 0.9 per cent to $84.98 a barrel, while West Texas Intermediate crude fell 0.7 per cent to $82.78 a barrel.
"The continued rise in oil prices means pressure on OPEC to increase production will only increase," said ING analysts Warren Patterson and Wenyu Yao.
Data including initial jobless claims and existing home sales in the US, as well as the eurozone's debt-to-GDP ratio and consumer confidence, will be released a day ahead.
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Toodles!
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