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The fall of the Chinese giant Evergrande opens a 5% water path in Europe

  1. Daniel Yebra

The message that there is no systemic risk with the possible fall of the Chinese real estate colossus Evergrande that arrives in the last hours from several fronts temper the spirits in the world bags after the fright of the eve.Today the indices move positive, but it should not be forgotten that yesterday the Eurostoxx 50 lost supports.In the Ecobolsa edition of the latter weekend, Joan Cabrero, an advisor to Ecotrader, warned that some details were missing to talk about a correction of the bags, after the important provisions accumulated in recent months of economic reconstruction.

The strategist of the Eleconomist Investment Strategies portal pointed out that a bearish hole would have to be seen in the opening of a session and the loss of the support of the 4.080 Eurostoxx 50 points.Well, both events occurred on Monday, when the uncertainty extended due to the situation of collapse of the Chinese real estate, and now the European reference index opens a risk of falling from about 5% to at least 3.800 points, being the analogous support zone at IBEX 35 the 7.700/8.000 points, which would imply a correction of about 10%.These levels could be an attractive opportunity to buy bag if the risks are not complicated.

The Chinese real estate market and the economy of the Asian giant are going through a very delicate moment.To the deceleration that the activity of the first country is suffering to recover from the Coronavirus pandemic, the Evergrande crisis is joined, which is being unable to face the interests of its debts, raising the risk of infection to the rest of the financial universe.

"While it is likely that it is not large enough to create systematic risks, either worldwide or in China itself, the concern is that the government is slow when allowing credit flexibility, whenIt can be necessary, "Citi Research analysts explained in a report published last Friday.

La caída del gigante chino Evergrande abre una vía de agua del 5% en Europa

Last week, the Chinese authorities told banks that they did not expect the payment of the interests that expire this week in their loans to Evergrande, according to Bloomberg.Since Evergrande is the second largest real estate promoter (in terms of housing sales in 2020) in China, the world wonders if a default could cause contagion for world risk assets or, at least, for Chinese assets.

The Hang Seng index, by Hong Kong, in which the real estate company is quoted, suffered a 3.3% drop on Monday, with the actions of Evergrande sinking 10.2%.This collapse could be exaggerated by the lack of liquidity that implied that other places such as Japan or South Korea were closed.But sales extended to Europe and Wall Street bags.

Eurostoxx 50 suffered a decrease of 2.1%, until 4.043.63 points.The IBEX 35 fell 1.20%, staying at 8.655.40 integers, with the BBVA (-7.48%) as one of the banks most affected by the risk of Evergrande, despite returning this Monday to Eurostoxx and with the arcerlormittal (-7.70%) and Acerinox and Acerinox(-3.96%) directly beaten by China's slowdown and specifically the construction industry and the rest of the financial sector being irremediably dragged.Santander gave 4.80% and Caixabank 4.10%.

El Vix o índice del miedo, que mide la volatilidad implícita del S&P 500, se disparó hasta los 26,85 puntos, nivel no visto desde mayo.And the selective reference in the United States backed up at half session by 2.2% to LOS4.333 points and already falls 4.50% from the historical maximums registered on September 2.So far this year, the index gains 15.4%.The Dow Jones left 2.2% and the Nasdaq 100% session a 2.5%.

Money to the dollar

The dollar was appreciated on Monday as the money was looking for shelter in assets such as the United States debt - purchases reduced the interest of the American bonus to 10 years to 1.30% - given the selling pressure that the collapse of Evergrandeexercised on world bags.The euro currently crosses $ 1.17.

Uncertainty was quickly spread from dawn, and just in the week in which the Federal Reserve (FED) celebrates a key meeting on monetary policy, which is expected to announce the rhythm of the withdrawal of stimuli (the tapering).On the same issue, but in the Eurozone, Isabel Schnabel, of the Executive Committee of the European Central Bank (ECB), said Monday that "it is still crucial to maintain debt purchases", since with increasing inflation "isLess important if we acquire more or less active, the important thing is when we will finish the program "."A hardening of premature monetary policy would be a much bigger mistake to wait," concluded the economist.

And there are more: the United States Treasury Secretary, Janet Yellen, warned in The Wall Street Journal about an economic "catastrophe" if this week does not vote in favor of raising the debt limit, while President Biden continues to find oppositionTo approve your stimuli plan.

Earrings from Germany

Europe is also aware of the elections held in Germany on Sunday, after which Angela Merkel will say goodbye to the country's presidency, with the social democratic candidate of the SPD, Olaf Scholz, as the main favorite to happen, and to change the sign political.

The Dax, a reference index in the German stock market, became formed by 40 companies, instead of 30.Airbus, Zalando, Siemens Healthineers, Symrise, Hellofresh, Sartorius, Porsche Automobil Holding, Brenntag, Puma and Qiagen are the new tenants.

Evergrande: Chinese 'Lehman'

The Evergrande conglomerate is China's second real estate promoter, with more than 200.000 employees and 300.000 million dollars of debt, "and is the largest issuer of Bond Asia without the grade rating of investment in dollars," according to UBP.This last fact aggravates the risk that your inability to pay interest is infected with the rest of the financial world."His collapse could be a warning so that the rest of the real estate sector controls their leverage," they say in Allianz Global Investors."China does not see systemic risk," he concludes.

The fear of Chinese contagion devastates 4% of the value of the financial sector

The real estate colossus causes a domino effect, but not a systemic crisis



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