Asian shares mixed after China Evergrande warns of cash woes

BANGKOK (AP) — Shares were mixed in Asia on Monday after troubled Chinese property developer Evergrande warned late Friday it may run out of money.

Hong Kong dropped 1.2% but the Shanghai Composite index rose. South Korea’s benchmark advanced but Tokyo and Sydney declined.

More broadly, investors are struggling with uncertainty about the newest coronavirus variant and about when the Federal Reserve will cut off its support for markets.

Regulators were scrambling to reassure investors after Evergrande, one of China's biggest developers, said it may run out of money to “perform its financial obligations” as it struggles to comply with pressure to reduce its $310 billion in debt.

The worry is that unsustainable levels of debt in the property sector might trigger a financial crisis. China wants to avoid a bailout but also is unlikely to let the situation deteriorate to the point where problems would cascade to that level.

A number of real estate companies have run into trouble as the government has pushed to reduce debt levels, but officials have issued statements saying China’s financial system is strong and default rates are low. Most developers are financially healthy and Beijing will keep lending markets functioning, the most recent statements said.

Evergrande's shares plunged 9.8% early Monday, helping pull the Hang Seng in Hong Kong down to 23,467.42.

Chinese tech giant Alibaba, which has been embroiled in a multi-faceted crackdown on the industry, also dragged the benchmark lower, losing 5.4% after the company said it was replacing its chief financial officer, Maggie Wu and overhauling its e-commerce business.

In Tokyo, the Nikkei 225 gave up 0.4% to 27,932.18, and the S&P/ASX 500 in Sydney slipped 0.2% to 7,226.00.

The Shanghai Composite index rose 0.4% to...