Asian Markets Concerned About Evergrande
Stock traders should be aware that the Hong Kong central bank has asked financial institutions to declare their exposure to Evergrande (OTC:EGRNY) in order to address systematic risks in the region. Similarly, the United States has also asked lenders about their exposure to the infamous company. The company’s possible insolvency has had disastrous consequences for similar firms in the real estate sector. Furthermore, Evergrande must release $45.2 million in coupon payments for a dollar bond on Wednesday.
As of 11.42 p.m. EST, the Nikkei dropped 2.46% and the Shanghai Composite dipped 1.95%. Seoul’s KOSPI declined 1.94%. The ASX 200 index fell 1.10% and the Hang Seng, in Hong Kong, decreased 0.49%.
As for the HSI index, it is strictly in downtrend and it is also trading below the 50, 100 and 200-day SMA on the daily time frames. The price has reached near an important level of support as shown on the chart which helps the index to bounce back. However, if the support level doesn’t hold, we could easily see the price moving further lower towards the next support zone which is in-line with the February 2020’s low.
HSI Weekly Chart