Asian markets grapple with Evergrande fallout

Asian shares mainly drifted lower Tuesday as investors continued to fret over China Evergrande Group’s (3333.HK) unsolved debt crisis and eyed the potential impact of a widening power shortage in China.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was 0.13 per cent lower on Tuesday, following a mixed session on Wall Street

In early trade Tuesday, Australia’s benchmark S&P/ASX200 index (.AXJO) was down nearly 1 per cent, while Japan’s Nikkei (.N225) was off 0.6 per cent.

China’s blue chip index CSI300 (.CSI300) edged up 0.1 per cent at the open, as Hong Kong’s Hang Seng Index (.HSI) gained 0.44 per cent.

The future of Evergrande, the world’s most indebted property developer, is being forensically scrutinised by investors after the company last Friday did not meet a deadline to make an interest payment to offshore bond holders.

Evergrande has 30 days to make the payment before it falls into default and Shenzen authorities are now investigating the company’s wealth management unit.

Without making reference to Evergrande, the People’s Bank of China (PBOC) said Monday in a statement posted to its website that it would “safeguard the legitimate rights of housing consumers”.

Widening power shortages in China, meanwhile, halted production at a number of factories including suppliers to Apple Inc and Tesla Inc and are expected to hit the country’s manufacturing sector and associated supply chains.