Distressed Developer Sunac Has a Rollercoaster Day in the Markets

Sunac China Holdings Ltd.’s stock and bond prices plunged early Wednesday after its rating got cut overnight, only to rebound in the afternoon after the State Council’s top financial committee signaled a more market-friendly posture.

During morning trading, prices of Sunac’s onshore bonds plummeted more than 25% at one point, after Fitch Ratings Inc. on Tuesday cut its foreign currency rating from BB- to B-, pushing it further into junk territory. After the drop, trading of the bonds was suspended for several hours. In Hong Kong, Sunac’s shares were down about 13% by noon.