Explained: Why China’s Evergrande crisis has sent global stock markets in panic mode

Evergrande’s collapse could have a spillover effect on many Chinese sectors and lead to massive job losses. The global economy will also be impacted as foreign banks have exposure to Evergrande.

Stock markets around the world have been jittery from Monday as concerns keep growing over the possibility of massive defaults by one of the biggest Chinese real estate developers Evergrande Group.

There are high chances that the embattled firm will default on upcoming payments later this week even as its chairman tried to lift confidence. Shares of the property developer plunged by as much as 7 per cent on Tuesday, following a 10 per cent drop a day ago.