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Stocks steady as markets calm after Evergrande-led slide

Asian trade tense in the shadow of Evergrande and the Fed
Asian trade tense in the shadow of Evergrande and the Fed   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p>By Lewis Krauskopf and Lawrence White</p> <p><span class="caps">NEW</span> <span class="caps">YORK</span>/LONDON – World stock markets stabilized on Tuesday and oil prices regained ground a day after heavy selling of risk assets, as investors assessed the level of contagion stemming from distress at developer China Evergrande and awaited central bank meetings.</p> <p/> <p><span class="caps">MSCI</span>’s gauge of stocks across the globe .MIWD00000PUS edged up 0.13%, following Monday’s biggest percentage drop in two months. Wall Street’s main indexes ended mixed after solid equity advances in Europe.</p> <p/> <p>Price moves in bonds and currencies were relatively subdued. On Monday, safe-haven assets drew bids as investors became risk averse. Gold pushed higher again on Tuesday, in a sign of investor caution.</p> <p/> <p>Investors were focused on the situation at Evergrande, where persistent default fears eclipsed efforts by the debt-laden group’s chairman to lift confidence as Beijing showed no sign it would intervene to stem any domino effects across the global economy. </p> <p/> <p>There are “some investors willing to step back in after a pretty big whack yesterday,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.</p> <p/> <p>“The idea that (Evergrande) possibly being ‘contained’ has probably gained a little bit of steam today.”</p> <p/> <p>On Wall Street, the Dow Jones Industrial Average .DJI fell 50.63 points, or 0.15%, to 33,919.84, the S&P 500 .SPX lost 3.54 points, or 0.08%, to 4,354.19 and the Nasdaq Composite .IXIC added 32.50 points, or 0.22%, to 14,746.40.</p> <p/> <p>The Cboe Volatility Index .VIX fell 1.35 points to 24.36 after hitting a four-month high a day earlier.</p> <p/> <p>The pan-European <span class="caps">STOXX</span> 600 index .STOXX rose 1%, with Germany’s <span class="caps">DAX</span> .GDAXI rising 1.4%. </p> <p/> <p>Canada’s main stock index .GSPTSE gained as the re-election of Prime Minister Justin Trudeau’s Liberals reassured investors that the outlook for the economy would continue to improve. </p> <p/> <p>Central bank meetings in the United States and elsewhere in the world were soon to take center stage for markets, with a Federal Reserve meeting due to conclude on Wednesday as investors look for when it will ease its bond-buying program.</p> <p>(Graphic: Evergrande’s debt pile, https://graphics.reuters.com/CHINA%20EVERGRANDE-<span class="caps">DEBT</span>/jnvweyjjlvw/CHINA-<span class="caps">EVERGRANDE</span>.jpg)</p> <p/> <p>In currency trading, the dollar index =USD fell 0.012%, with the euro <span class="caps">EUR</span>= down 0.03% to $1.1722. The Japanese yen strengthened 0.18% versus the greenback at 109.20 per dollar. </p> <p/> <p>“There is just a lot of wait-and-see as far as what is going to happen with the Fed, what is going to happen with Evergrande, and right now if you are trying to make a dollar bet you really just want to wait until you get a better sense of what is going to happen with Evergrande and what the Chinese government is going to do,” said Edward Moya, senior market analyst at <span class="caps">OANDA</span> in New York.</p> <p/> <p>Benchmark 10-year U.S. Treasury notes US10YT=RR last fell 5/32 in price to yield 1.3243%, from 1.309% late on Monday. </p> <p/> <p>Oil prices edged higher in a see-saw session, as concerns about the global consumption outlook counterbalanced the struggle by big <span class="caps">OPEC</span> producers to pump enough supply to meet growing demand. </p> <p/> <p>U.S. crude CLc1 settled up 0.4% at $70.56 per barrel and Brent LCOc1 settled at $74.36, up 0.6% on the day.</p> <p/> <p>Spot gold <span class="caps">XAU</span>= added 0.5% to $1,773.09 an ounce. </p> <p/> </div>