Stock indices across the world posted a decline with scrips on the Wall Street ending up with a wobble in afternoon trading on Thursday, a day after approaching record highs set this summer.
With share prices nearing their peaks, investors have been carefully poring through the earnings reports to evaluate the impact of supply chain problems and rising inflations. Analyst warnings on supply chain crunches and higher production costs have left investors worried of dwindling margins and rising operational costs.
Major indices and shares across the world reported a decline as Chinese property developer Evergrande revealed that a plan to sell its property management arm to a smaller rival had fallen apart.
China Evergrande Group’s shares tumbled nearly 12% while shares in Evergrande Property Services slipped 6.8%. In a notice to the Hong Kong exchange Evergrande said it was having difficulties selling off assets to resolve its cash crunch.
Shares of Hopson Development Holdings, the prospective buyer, saw shares rise by 5.2% as it revealed that the purchase got stalled. Trading of shares in all three companies had been suspended pending a resolution of the transaction.
Shares slipped in Hong Kong and Tokyo. Indices in India too reported a decline. Hong Kong’s Hang Seng index edged 0.1% lower to 26,110.15 while the Shanghai Composite index gained 0.5% to 3,603.62.
Australia’s S&P/ASX 200 gained 0.3% to 7,434.60. South Korea’s Kospi rose 0.2% to 3,019.15.
Bond yields rose. The yield on the 10-year Treasury rose to 1.67% from 1.65% late Wednesday. The S&P 500 index fell 0.1% as of 12:50 p.m. Eastern. The benchmark index is sitting just below the all-time high it reached on Sept. 2. The Dow Jones Industrial Average fell 137 points, or 0.4%, to 35,471 and is just below its all-time high set on Aug. 16.
The Nasdaq rose 0.3% and smaller stocks edged higher. The Russell 2000 rose 0.1%. U.S. crude oil prices fell 2.2% and weighed down energy stocks. Devon Energy fell 2.9% and Schlumberger fell 1.6%.
The street reported fear of rising inflation taking a toll on consumer spending which could further disrupt economic recovery. Outside of earnings, investors received an encouraging update on the labor market. The Labor Department reported that the number of Americans applying for unemployment benefits fell last week to a new low point since the pandemic erupted.
With agency inputs from AP