Asian markets grapple with Evergrande fallout as concern over a China power crunch grows

• Asian markets are shifting lower as Chinese property giant Evergrande’s debt crisis looms.
• The People’s Bank of China said on Monday it would “safeguard the legitimate rights of housing consumers.”
• Meanwhile, power shortages in China have halted production at suppliers to Apple and Tesla.
• See more stories on Insider’s business page.

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

Morgan Stanley Capital International’s broadest index of Asia-Pacific shares outside Japan was 0.13% lower on Tuesday, following a mixed session on Wall Street

In early trade Tuesday, Australia’s benchmark S&P/ASX200 index was down nearly 1%, while Japan’s Nikkei was off 0.6%.

China’s blue chip index CSI300 edged up 0.1% at the open, as Hong Kong’s Hang Seng Index gained 0.44%.

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

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 and Tesla, and are expected to hit the country’s manufacturing sector and associated supply chains.

Analysts cautioned the ongoing blackouts could affect the country’s listed industrial stocks.

“What we see in China with the developers and the blackouts is going to be a negative weight on the Asian markets,” Tai Hui, JPMorgan Asset Management’s Asian chief market strategist told Reuters.

“Most people are trying to work out the potential contagion effect with Evergrande and how far and wide it could go,” he continued. “We keep monitoring the policy response and we have started to see some shift towards supporting homebuyers, which is what we have been expecting.”