Chinese property shares dived Monday, as sentiment took a hit after distressed developer China Evergrande Group scrapped its key creditor meetings at the last minute and said it must revisit its restructuring plan.
A Bloomberg Intelligence gauge of builder shares fell as much as 6%, the most since late December. Evergrande was one of the biggest drags to the index, alongside China Aoyuan Group Ltd., which slumped by a record 72% after trading resumed.
The latest developments add to mounting worries over the property sector. Investors are questioning the effect of policy support as developers’ liquidity crunch has shown little sign of abating.
A policy-driven rally in Chinese property shares since late August, spurred by reduced homebuyer down-payment requirements and lower rates on existing mortgages, has rapidly lost steam. The property stock gauge has slumped by a third this year, outpacing losses in the broader market.
