Hong Kong's benchmark Hang Seng index closes in bear market territory

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Hong Kong’s benchmark stock index closed in bear market territory, down 2.1% in the Friday session and more than 20% below the highs of January, as uncertainty over China’s property market and growth prospects erase early-year gains. The further losses on Friday came after news that embattled Chinese real estate giant Evergrande had filed for bankruptcy protection in a U.S….

The company sought protection under Chapter 15 of the U.S. bankruptcy code, which shields non-U.S. companies that are undergoing restructuring from creditors.

Russ Mould, investment director at AJ Bell, said the filing in itself would have prompted"some alarm in isolation," but combined with peer 's decision earlier this week to suspend payments on some of its bonds from Monday,"the words 'dominos' and 'falling' start to come to mind."JPMorgan on Tuesday raised its emerging markets corporate high-yield default forecast

primarily due to rising contagion fears around China's property sector, which the Wall Street bank expects to account for nearly 40% of all default volumes in 2023. Evergrande fell into default in 2021 and announced an offshore debt restructuring program in March this year, but Country Garden has a larger and broader portfolio of property developments.

 

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