Asia Stocks Fall on China Weakness, Crude Rallies: Markets Wrap

(Bloomberg) — Chinese stocks were among the hardest hit across broadly lower equity markets in Asia on Monday in a further sign of cautious sentiment. Treasuries crept lower and oil gained for a second day.

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Equity benchmarks in mainland China and Hong Kong fell with the Hang Seng index tumbling as much as 1.6%. A Bloomberg Intelligence index of Chinese property developers dropped as much as 6.4%, heading for its worst session in nine months.

The decline for Chinese developers follows news on Friday that China Evergrande Group had canceled a creditor meeting slated to begin Monday. Fresh strains for developers appeared to overcome pockets of optimism Friday, when an index of US-listed Chinese companies was bolstered by news Washington and Beijing were forming working groups to discuss economic and financial issues.

Shares also dropped in Australia and South Korea. A region-wide equity gauge fell for the fifth time in six days. Japanese equities and US stock futures both gained. Oil climbed as hedge funds piled on bets tightening supplies will see a resumption of the rally after a pause last week.

Stock losses in Asia followed a 0.2% decline for the S&P 500 on Friday to cap its worst week since March. Nasdaq 100 futures climbed 0.4% Monday after the underlying gauge ended little changed Friday, supported by gains in Apple Inc. as its latest iPhones and watches went on sale.


Treasuries will be in focus this week, with a number of Fed officials speaking at public events. Investors will also be watching the release of monthly inflation data in the US, and assessing the likely impact of a possible US government shutdown.

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“Sentiment still remains fragile with higher-for-longer messages reverberating through the markets,” Redmond Wong, market strategist for Saxo Capital Markets HK Ltd, wrote in a research note. A potential US government shutdown and the United Auto Workers strike “could further dent sentiment this week,” he said.

The dollar traded in a narrow range against its major peers, while yen was little changed…


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