Stock Selloff Spreads From U.S. to Global Markets


A view of Evergrande City in Wuhan. Concerns about China’s property companies have been fanned in recent weeks by financial strains at China Evergrande Group.



Photo:

Getty Images/Getty Images

Global markets dropped, tracking a technology-driven selloff in U.S. shares, and as investors confronted fresh concerns about the health of China’s property sector.

By early afternoon Tuesday in Tokyo, the Nikkei 225 had dropped 2.8%, with SoftBank Group Corp., the tech-investing powerhouse that is one of the index’s biggest constituents, shedding 4.2%, and electronics and entertainment giant

Sony Group Corp.

down 2.1%.

Elsewhere in the region, South Korea’s Kospi Composite fell 1.6%, while the S&P/ASX 200 in Australia retreated 0.7%. Hong Kong’s Hang Seng Index retraced early losses to stand close to unchanged. Mainland Chinese markets were closed for a holiday.

However, U.S. stock futures crept higher, with futures tied to the S&P 500 and the Nasdaq 100 index gaining 0.1% and 0.4%, respectively, suggesting U.S. markets could regain some ground in Tuesday’s trading session.

Concerns about China’s property companies, which have been fanned in recent weeks by financial strains at

China Evergrande Group,

were rekindled by smaller rival

Fantasia Group Holdings Co.

, which said late Monday it had failed to repay some maturing dollar bonds. Fantasia’s stock was halted from trading, while the Lippo Select HK & Mainland Property index fell more than 3%.

In bond markets, the yield on the benchmark 10-year Treasury note rose modestly to 1.488%, according to Tradeweb, up from Monday’s 1.481%.

Evergrande, China’s most indebted property developer, has kept global markets on edge and sparked protests at home as it struggles to survive. WSJ explains why the company’s crisis is raising questions about the state of the world’s second-largest economy. Photo: Alex Plavevski/Shutterstock

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