Investors are keeping a close eye on developments surrounding troubled Chinese developer Evergrande

London (AFP) - Stock markets mostly dropped Friday, as traders closed out a largely positive week for global equities by booking profits on renewed concerns over troubled Chinese property developer Evergrande.

Indexes “flashed red across Europe and Asia… as uncertainties remained over the future of troubled Chinese property developer Evergrande, with no news on whether it had made its latest bond interest payment”, said Russ Mould, investment director at AJ Bell.

News from China also sent cryptocurrencies plunging as the country ruled all transactions in the digital assets illegal.

Bitcoin, which had already been falling before the announcement, dropped as much as 6.0 percent in value before trimming losses to stand at $42,256, down 5.5 percent.

Hong Kong and Shanghai indices tumbled as Evergrande’s silence over its interest payment fuelled investors’ fear that its potential collapse could spill over into the broader economy.

Traders were unable to track a surge on Wall Street overnight that followed news the Federal Reserve planned to start tapering its vast monetary easing programme within months.

Observers took that as a signal of confidence that the world’s top economy is on the right track to recovery.

A more hawkish tilt by the British and Norwegian central banks hinted at a similar outlook.

- No ‘Lehman moment’ -

Market players are in the meantime keeping close tabs on Evergrande, with no sign that it had paid interest to overseas bondholders on a note due Thursday.

While the firm has a 30-day grace period to stump up before it is considered in default, the lack of information is keeping investors anxious.

Markets were sent spinning at the start of the week by fears that the company – one of China’s biggest developers in the crucial property sector – would go under and drag others with it, in turn jolting the domestic economy and possibly beyond.

But for now, there is a feeling that there will not be a “Lehman Moment”, such as when the bankruptcy of Wall Street titan Lehman Brothers in 2008 sparked a collapse on world markets.

Stock markets had enjoyed a couple of strong days prior to Friday on what appeared to be easing concerns over Evergrande.

But its share price tumbled more than 11 percent Friday, having surged more than 17 percent a day earlier.

It was not all gloom in Asia, as the Bombay Stock Exchange Sensex index crossed the 60,000 mark for the first time.

India’s markets have enjoyed whirlwind growth despite the outbreak of the coronavirus pandemic, more than doubling in value since April last year.

“Expectations of solid economic recovery and sustained growth in the next couple of years is keeping the bulls enthused,” Sandeep Bharadwaj of IIFL Securities said.

Heavyweight IT stocks including Infosys, TCS and HCL Technologies led Friday’s rally, surging up to three percent after overseas rival Accenture forecast strong revenue growth for the year.

Real estate, banking and financial services companies also gained, with the Nifty Realty Index hitting an 11-year-high.

- Key figures around 1100 GMT -

London - FTSE 100: DOWN 0.2 percent at 7,062.75 points

Frankfurt - DAX: DOWN 0.7 percent at 15,534.94

Paris - CAC 40: DOWN 0.9 percent at 6,642.14

EURO STOXX 50: DOWN 0.8 percent at 4,159.77

Tokyo - Nikkei 225: UP 2.1 percent at 30,248.81 (close)

Hong Kong - Hang Seng Index: DOWN 1.3 percent at 24,192.16 (close)

Shanghai - Composite: DOWN 0.8 percent at 3,613.07 (close)

New York - Dow: UP 1.5 percent at 34,764.82 (close)

Euro/dollar: DOWN at $1.1732 from $1.1736 at 2100 GMT

Pound/dollar: DOWN at $1.3702 from $1.3720

Euro/pound: UP at 85.63 pence from 85.53 pence

Dollar/yen: UP at 110.43 yen from 110.26 yen

Brent North Sea crude: UP 0.1 percent at $76.57 per barrel

West Texas Intermediate: FLAT at $73.32 per barrel

burs/bcp