By Peter Nurse
Investing.com – European stock markets edged lower Monday, weighed by ongoing concerns over the health of property giant China Evergrande Group and ahead of an OPEC meeting.
The main driver of these losses was worries about China’s property sector as trading in shares of debt-laden Evergrande was suspended after it missed a key interest payment for the second time last week as it struggles to refinance over $300 billion in liabilities.
“Evergrande has a $260 million offshore note maturing today, which only has a five-day “grace” period, and if no sign of payment occurs, the negative noise around the company and China’s property market will increase once again,” said OANDA strategist Jeffrey Halley in a note to clients.
Reports circulated Monday that the distressed developer will sell half its stake in its property management unit to Hopson Development for more than $5 billion. However, local media issued conflicting reports on the deal’s price and there was no clarity as to how the funds from any sale would be allocated.
In corporate news, Petrofac (LON:PFC) stock spiked 10% at the open but quickly reversed to be down over 2%. The oil services company is due to find out today how big a fine it will have to pay after pleading guilty to seven charges of bribery in a U.K. court.
WM Morrison (LON:MRW) stock fell 3.8% after private equity firm Clayton Dubilier & Rice won a lengthy battle for the U.K. supermarket chain in an auction at the weekend, although the winning bid was some 3% below Friday’s market close.
Elsewhere, Aena (MC:AENA) stock rose 2%, climbing to a 52-week high, the Spanish airport company rebounding as international travel recovers from the pandemic.
Repsol (OTC:REPYY) stock also reached a 52-week high, up 3.2%, as the Spanish energy company benefited from the region’s record high gas prices.
Also of interest Monday will be a meeting of Eurozone finance ministers to discuss matters including the EU’s recovery plans as well as progress on the much-delayed banking union project.
Crude prices edged lower Monday ahead of the latest meeting of top producers which could result in additional output being added into the global market.
The Organization of the Petroleum Exporting Countries and allies led by Russia, a group known as OPEC+, meet later Monday, and are under pressure from a number of countries, including the U.S. and India, the largest and third largest consumers in the world respectively, to produce more to lower prices.
The group has already stated that it would boost production by 400,000 barrels per day every month until at least April 2022 to phase out 5.8 million barrels per day of existing cuts.
European Stocks Lower; Evergrande Concerns Weigh, OPEC Meeting Due
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