GLOBAL MARKETS – Stocks and commodities rebound after Evergrande sell off


* European equities, US futures up 1%

* Oil ends the days of losses

* Key central bank meetings this week in the US, Britain and Japan

LONDON, Sept.21 (Reuters) – Global equities stabilized on Tuesday and commodity prices rallied from the previous day’s massive sales as investors grew convinced that the Chinese developer’s distress contagion Evergrande, in debt, would be limited.

The STOXX index of the largest European stocks rose 1%, as did Wall Street futures after the S&P 500 and Nasdaq suffered their biggest daily percentage declines since May on Monday.

German and US government bonds, in high demand in the middle of Monday’s market sell-off, saw their yields fall by 2-3 basis points respectively.

Investors pointed to the generally positive market backdrop with central bank money printing and the recovery of the global economy after the pandemic as reasons to stay bullish.

“The accommodating monetary and fiscal policies and the macroeconomic recovery still suggest a downward buying strategy,” said Angelo Meda, head of equities at Banor SIM in Milan.

But some caution persisted, given latent concerns about the fallout from an Evergrande default, as well as a series of central bank meetings, including Wednesday’s Federal Reserve statement that could bring the bank closer to the reduction.

The MSCI global equity index edged up 0.14%, after plunging 1.6% on Monday. S&P 500 futures are up almost 1%, but the index is around 4% below record highs reached in early September

Asian stocks sold earlier on Tuesday with Hong Kong’s Hang Seng down 0.1% in the late afternoon, while Japan’s Nikkei returned from a stock market vacation with a 2% decline.

The Chinese yuan stabilized in offshore trading, recouping some of the losses that dropped it to a three-week low on Monday. Evergrande shares fell 0.4% as attention shifted to Thursday, when the company is due to make bond interest payments.

A letter to all of President Hui Ka Yuan’s staff pledged that the company would shoulder its responsibilities and “come out of its darkest moment.”

Struggling for money, developer owes $ 305 billion, and markets fear a disorderly failure spill over into China’s real estate industry and everything exposed to it – primarily banks, then the economy at large. .

While mainland Chinese markets are closed for a public holiday, there was still little evidence of this. China’s main state media made no mention of Evergrande’s problems, and Beijing showed no signs of intervening.

Australian stocks rose 0.35% as miners BHP and Rio Tinto tried to rebound from nine-month lows reached on Monday amid demand fears.

Copper hovered near one-month lows, however, amid fears over demand for the metal widely used in construction.

Cryptocurrencies also bottomed, with bitcoin rebounding from 1.5-month lows.

FEDERATED WATCH

Aside from Evergrande, other market tests are looming, with central banks from the United States, Great Britain, Japan, Norway, South Africa, Sweden and Switzerland. meeting this week.

Nerves in front of the Fed kept the dollar from falling much, although it registered small losses against the euro and the aussie, with the euro at $ 1.1735.

Ten-year US Treasury yields climbed to 1.3277%, although many analysts now believe the details of the Fed’s cut schedule may not be announced until November.

“Central banks rightly need to think about how they pull themselves out of these historically high levels of monetary accommodation, but the task is made much more difficult by Evergrande and by the tax locks in the United States,” Stephen said. Miller, GSFM Investment Strategist.

He was referring to congressional wrangling over passing a spending program and lifting the treasury borrowing limit.

The OECD has said it is too early for governments and central banks to withdraw exceptional support from their economies.

Central banks are likely to monitor developments in gas prices, as sharp price increases may exacerbate inflation risks and hamper economic recovery. European gas prices, up around 280% this year, edged down after jumping 11% on Monday.

Brent prices, meanwhile, rose more than 1%, ending days of losses caused by the Chinese real estate developer’s troubles.

Additional reporting by Tom Westbrook in Singapore, Hideyuki Sano in Tokyo, Anushka Trivedi in Bengaluru, Paulina Duran in Sydney, Danilo Masoni in Milan; Editing by David Evans and Edmund Blair

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