By Peter Nurse
Investing.com – European stock markets traded sharply lower on Monday amid concerns over the health of real estate giant China Evergrande Group and ahead of the week’s crucial Federal Reserve meeting.
At 3:40 am ET (0840 GMT), the DAX in Germany was trading down 2%, following an increase in the number of components to 40 from 30, while the CAC 40 in France fell 1.9% and the UK’s FTSE 100 fell 1.3%.
This week a number of central banks are holding policy-making meetings including the Bank of England, Bank of Japan and Swiss National Bank, but the focus will be on the Federal Reserve, the US central bank potentially taking a step closer to gradually during its two-day meeting, starting Tuesday.
Investors will be looking to see if the Fed deems the U.S. economy strong enough to start cutting back on the massive amount of monetary support it provided during the pandemic, although the consensus is that an actual announcement is delayed until. ‘in November or December Meetings.
Back in Europe, falling commodity prices hit energy and mining stocks hard, with Royal Dutch Shell (LON: RDSa) shares falling 1.2%, TotalEnergies (PA: TTEF) shares. by 1.1%, shares of Anglo American (LON: AAL) by 5.9% and ArcelorMittal (NYSE: MT) shares down 5.2%.
Elsewhere, shares of Lufthansa (DE: LHAG) rose 2.7% despite the German airline launching a capital increase to repay part of a state bailout it took. received during the coronavirus crisis. Investors took this decision as a sign of the management team’s confidence.
Earlier Monday, Hong Kong’s Hang Seng Index fell more than 3%, dragged down by continued dumping of shares in Chinese real estate company China Evergrande Group (HK: 3333).
Investors seem to take a dim view of its outlook, with a bond interest payment due Thursday and growing fears that a default on its $ 300 billion in commitments could crystallize wider risks in China’s financial system.
Crude prices fell as supply increased in the United States, the world’s largest consumer. The number of the country’s oil and gas rigs increased from nine to 512 in the week to September 17, its highest level since April 2020 and double the level of last year, Baker Hughes said on Friday. .
In addition, only 23% of U.S. Gulf of Mexico crude production went offline on Friday, an improvement from 28% on Thursday, more than two weeks after Hurricane Ida hit.
The dollar also peaked a month before the Fed meeting, making commodities denominated in the currency more expensive.
At 3:40 a.m. ET, U.S. crude futures were trading down 1.3% to $ 70.88 a barrel, while the Brent contract fell 0.8% to $ 74.72.
Additionally, gold futures rose 0.1% to $ 1,752.95 / oz, while EUR / USD traded down 0.1% to 1.1711.
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