A selloff in stocks moderated in Asia on Tuesday as traders assessed risks from China’s crackdown on the real-estate sector and looked ahead to this week’s Federal Reserve meeting.
Treasury yields edged up. Japan fell after reopening following a holiday, while Hong Kong slipped but avoided a repeat of the property-led tumble from a day earlier. U.S. and European futures advanced, suggesting a degree of improvement in sentiment. Dip-buyers in the last hour of trading helped the S&P 500 pare some losses overnight, though the index still posted the biggest drop since May.
A Hong Kong gauge of real-estate firms steadied, after developers disputed a report of pressure from the Chinese government. China Evergrande Group slid deeper in equity and credit markets. Concerns remain about broader contagion after S&P Global Ratings said the developer is on the brink of default. China’s markets and those in South Korea remain closed for a holiday.
Treasuries pared an advance and the dollar dipped. Aside from worries over Evergrande’s ability to make good on $300 billion of liabilities, Wednesday’s Federal Reserve meeting also looms. Policy makers are expected to start laying the groundwork for paring stimulus.
