Investor caution exerts pressure on regional markets, central banks decisions eyed

• Chinese index rose amid the worse situation around troubled real estate developer Evergrande Group.
• Evergrande Group stock dropped: some employees from the wealth management unit were detained by the Chinese police.
• Hang Seng index declined the most, approaching a 10-month low.

Chinese index trade higher despite the gloomy situation surrounding the Evergrande Group. While other regional stock markets trade lower as investors remain broadly cautious before a slew of major central banks’ rate decisions this week.

At the time of writing, China’s SSE Index is up by 0.06% to 3,119, the Shenzhen Component Index rose to 10,181, up by 0.36%, Hong Kong’s Hang Seng fell to 18,014, South Korea’s Kospi is down 0.88% and Taiwan’s Weighted Index fell by 1.26%.

Hong Kong’s Hang Seng index experienced the most significant decline among its counterparts, approaching a 10-month low. This decline was driven by renewed selling pressure in property stocks following the worse situation of China’s Evergrande Group.

The real estate developer saw its stock price drop by nearly 20% after delaying a decision on debt restructuring. Additionally, there were reports of some employees from Evergrande’s wealth management unit being detained in Shenzhen, raising concerns about increased government oversight of the troubled property developer.

Market participants will likely observe the upcoming US Federal Reserve (Fed) meeting scheduled for Wednesday, where it is widely anticipated that the central bank will maintain its current interest rates.

Moreover, the People’s Bank of China (PBOC) is scheduled to decide on its key loan prime rates on Wednesday. However, market expectations are leaning towards the central bank maintaining these rates at their current record-low levels.

The Bank of Japan (BOJ) is scheduled to convene its meeting on Friday, with the possibility of no adjustments to its negative interest rate policy.