European Stocks Open Lower as Investors Look Ahead to Central Bank Decisions
European markets started the week on a negative note as they opened lower, following the trend set by their Asia-Pacific counterparts. Investors are keeping a close eye on central bank decisions scheduled for this week.
The pan-European Stoxx 600 index opened 0.2% lower, with different sectors experiencing varying performances. Mining stocks saw marginal gains of 0.3%, while household goods dropped by 0.5% at the start of trading.
According to Hannah Ward-Glenton, the cause of the negative open can be attributed to concerns surrounding central bank decisions.
Evergrande Shares Tumble After Wealth Management Staff Detained
Shares of troubled Chinese real estate developer Evergrande experienced a sharp decline of as much as 22.6% after some staff from the company’s wealth management unit were detained by the police over the weekend.
The police from the southern city of Shenzhen issued a statement stating that “public security organs took criminal compulsory measures against Du and other suspected criminals at Evergrande Financial Wealth Management Co.” Reuters reported that Du was identified in 2021 by staff as the general manager and legal representative of Evergrande’s wealth management division.
Although Evergrande shares recovered later in the session to gain 1.61% compared to Friday’s close, the detention of staff has raised more concerns about the real estate developer’s financial troubles.
SoftBank Eyes OpenAI Tie-Up After Arm IPO
Japanese investment holding company SoftBank is reportedly planning to invest “tens of billions” into artificial intelligence (AI), as stated by the Financial Times. The company is considering various options, including a potential investment in or a “broad strategic partnership” with Microsoft-backed OpenAI.
Other potential investments in rivals were also mentioned in the report, with SoftBank making a preliminary approach to buy U.K.-based AI chipmaker Graphcore, although Graphcore denied receiving an offer from SoftBank.
Singapore Trade Slides More Than Expected in August
Singapore’s non-oil domestic exports witnessed a decline for the 11th consecutive month, falling 20.1% year-on-year. The decline was larger than the 15.8% drop forecasted by economists but slightly less than July’s 20.3% fall.
Total trade in Singapore also declined, with a 15.2% year-on-year contraction in August to 100 billion Singapore dollars ($73.4 billion), following a 20.9% contraction the previous month. Both imports and exports fell, dropping by 15.6% and 14.7% respectively.
Tech Sector Coming Off a Losing Week
The technology sector was the hardest-hit group in the S&P 500 during the week ending September 15. The Technology Select Sector SPDR Fund lost 2.2% during the week. Oracle saw the biggest losses within the sector, falling nearly 10% after missing revenue expectations in the fiscal first quarter. Chipmaker KLA Corporation lost 8.7%, while Monolithic Power Systems declined by more than 7%. On the other hand, the utilities sector experienced the largest weekly gains, with the Utilities Select Sector SPDR Fund adding 2.8%.
Stock Futures Open Flat
U.S. stock futures showed a slight increase on Sunday evening. Dow Jones Industrial Average futures added 17 points or 0.05%, while S&P 500 and Nasdaq 100 futures inched up 0.03% and 0.02% respectively.
The stock market is expected to open on a relatively flat note, with investors closely monitoring the upcoming trading sessions.