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Global Markets Look Beyond Evergrande To Resume Rally

GLOBAL MARKETS LOOK BEYOND EVERGRANDE TO RESUME RALLY

Global equity markets are set to grind higher after investors shrugged off the uncertainty clouding real estate developer China Evergrande and as the improving COVID-19 outlook increases the appetite for risk assets.

The US sharemarket, which makes up about half of the global equity market, is set to rise 0.2 per cent when markets open on Monday, according to futures pricing.

The anticipated gains come after US shares fell to their lowest level since July at the start of last week before rallying in a move that dragged the S&P 500 index of blue chips and the MSCI All Country World index to a small gain for the week.

In Australia, shares are also poised to rise incrementally higher, with a gain of less than 0.1 per cent indicated by the futures market. The S&P/ASX 200 fell 0.8 per cent last week, as the weakening price of iron ore weighed on the materials sector.

The forecast sharemarket gains come as worries about financial contagion linked to Evergrande’s likely default and debt restructure ease.

Investors are preparing for the likelihood of a debt restructure after a $US83.5 million ($115 million) coupon payment for the world’s most indebted real estate company elapsed on Thursday. A further $US43.5 million payment is due on Wednesday for a separate bond.