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European Stocks Lower; ArcelorMIttal Hit Hard by Falling Prices By


© Reuters.

By Peter Nurse – European stock markets traded sharply lower Monday amid concerns about the health of property giant China Evergrande Group and ahead of the week’s crucial Federal Reserve meeting.

At 3:40 AM ET (0840 GMT), the in Germany traded 2% lower, following an increase in the number of constituents to 40 from 30, while the in France fell 1.9% and the U.K.’s dropped 1.3%.

This week sees a number of central banks hold policy-setting meetings, including the , the and the , but the focus will be on the , with the U.S. central bank potentially taking another step toward tapering at its two-day meeting, starting on Tuesday.

Investors will want to know if the Fed considers the U.S. to be strong enough for them to begin reducing its massive monetary support during the pandemic. But, consensus suggests that an actual announcement may be postponed until November or December.

Back in Europe, sliding commodity prices have hit energy and mining stocks hard, with Royal Dutch Shell (LON:) stock down 1.2%, TotalEnergies (PA:) stock down 1.1%, Anglo American (LON:) stock off 5.9% and ArcelorMittal (NYSE:) stock down 5.2%.

Elsewhere, Lufthansa (DE:) stock rose 2.7% despite the German airline launching a capital increase to pay back part of a state bailout it received during the coronavirus crisis. This decision was taken by investors as an indication of management confidence.

Earlier Monday, Hong Kong’s dropped more than 3%, dragged down by the continued dumping of shares in Chinese property company China Evergrande Group (HK:).

With Thursday’s bond interest payment and growing concerns that China Evergrande Group (HK:) could default on $300 billion in liabilities, investors seem to have a negative view about its prospects.

As the U.S. became the world’s largest consumer, crude prices declined. The country’s rose by nine to 512 in the week to Sept. 17, its highest since April 2020 and double the level from this time last year, Baker Hughes said on Friday.

As of Friday, 23% of U.S. Gulf of Mexico crude oil output was still offline, a significant improvement on the 28% recorded Thursday, two weeks after Hurricane Ida struck.

In addition, the dollar climbed to an all-time high of $18.86 per barrel ahead of the Fed meeting. That made commodities that are priced in dollars more expensive.

By 3:40 AM ET, futures traded 1.3% lower at $70.88 a barrel, while the contract fell 0.8% to $74.72. 

Additionally, rose 0.1% to $1,752.95/oz, while traded 0.1% lower at 1.1711.


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