“China has tools and policy space to prevent the Evergrande situation from turning into a systemic crisis,” said the International Monetary Fund’s (IMF) Chief Economist Gita Gopinath during an interview, per Reuters.
“Real estate sector was a big part of China’s economy, and China Evergrande’s potential default could have implications for China’s economic activity and financial stability,” added IMF’s Gopinath.
Key quotes
We are following the developments in China very closely.
Downside risks linked to Evergrande could have implications for china’s economic activity and financial stability.
Market reaction
The news adds to the recent cautious optimism in the market but S&P 500 Futures print mild losses by the press time as traders remain skeptical ahead of China open and the Fed meeting.