A stock market rally for Evergrande has managed to cause a fantastic jump in its value by as much as 82%. This jump was temporary, but it was still at a 70% gain overall by the end of the session. This is just one part of a bull run in the Chinese property stock market in general.
The development follows Country Garden managing to stave off a default. It managed to pay off $22.5 million in relation to bond coupons this Tuesday. This boosted market sentiment in the property sector considerably, as debt has been a big worry for many property developers. Others such as Evergrande have defaulted in the past. There were worries around Country Garden as they had missed their original August deadline. However, they did manage to pay it off within the following 30 day extension period.
How the Sentiment Affected the Stocks
As a result, this all aided in buoying the Hang Seng Index somewhat. Overall, the property market turns out to be the biggest gainer on the index over the day. The Hang Seng Mainland Properties Index gained 4%. However, despite the positive gains in the property market specifically, it has proven to not be enough. The HSI is still in the negative even with this aid. The stocks in the industrial and healthcare sectors considerably weighed down on the index.
Other property businesses also had excellent growth in the stock market rally. Country Garden Holdings, the main contributor to this boom, gained 26%. Logan Group managed to climb up 28%.
Evergrande’s default was in 2021, which has been a great drag on the property market sector ever since. The stock continued trading for the first time in a while last week. Unfortunately, it ended up lower by 80% on the first day if you look at historical stock prices. This turnaround is promising for many.
