Global Markets Shaken by Evergrande Fear... Nasdaq Falls 2%

[Image source=Yonhap News]

[Asia Economy Reporter Yu Je-hoon] The global financial markets are shaking amid crisis rumors surrounding Evergrande (恒大), China's largest private real estate company. Following Hong Kong and Europe, the New York Stock Exchange also fell by about 2%.

On the 20th (local time), the Dow Jones Industrial Average on the New York Stock Exchange closed at 33,970.47, down 1.78% from the previous session. Meanwhile, the Standard & Poor's (S&P) 500 index fell 1.7% to 4,357.73, and the Nasdaq index also closed down 2.19% at 14,713.90.

The Tokyo stock market also broke below the 30,000 mark. According to Sankei Shimbun, as of 9:15 a.m. that day, the Tokyo Nikkei average index plunged 501.88 points from last week's closing price to 29,998.18. The Evergrande-triggered fear is shaking the global financial markets.

Bitcoin is also showing a sharp decline. According to CoinDesk, as of 12 p.m. that day, the price of Bitcoin was trading at $42,942.90, down 6.86% compared to 24 hours earlier.

Evergrande Group is China's largest private real estate company, with debts reportedly reaching 1.9 trillion yuan (approximately 350 trillion won) as of the end of last year. Major overseas media outlets are reporting that Evergrande Group is highly likely to default due to a severe liquidity crisis.

Evergrande Group is scheduled to repay two bonds on the 23rd. Industry insiders believe that whether these bonds are repaid could be a gauge of the Evergrande situation. S&P also released a report stating, "It is unlikely that Evergrande Group will receive direct support from the (Chinese) government," and noted that "it is facing the risk of defaulting on the upcoming debt repayments."