Asian Market Update – Monday: Bitcoin flirts with $8,000; Asian stocks in red

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The Big Question: Are investors’ confidence in bitcoin growing?

Prices of main cryptocurrencies were pointing higher during early trading on Monday, with bitcoin flirting with the $8,000 level throughout the morning.

The price of bitcoin was down slightly for the day to trade just above the $8,000 mark at the time of writing.

Overnight, bitcoin took a strong upswing, rising from about $7,700 to reach as high as $8,020 at one point, before heading back down. The big surge could indicate that investors are again gaining strong confidence in bitcoin is back in play after recent setbacks, as CCN reported yesterday.

Still, there are new reports, citing supposedly leaked government documents, suggesting that the government of Xinjiang, China has urged local governments to “support bitcoin mining more cautiously.”

The leaked document, which was reviewed by Hacked, said that bitcoin mining is not actually a cloud computing service, which the government there supports, and that bitcoin mining does not leave any product behind to benefit local economy.

The document reveals an overall negative attitude from the Chinese authorities towards crypto mining, although it also says that the activity will not be banned outright as of now.

The price of ethereum, meanwhile, gained 0.87 percent to about $357 before midday.  Ethereum surged on Saturday from about $326 to as much as $364 on Sunday. Ethereum has shown some strong momentum that prompts some to predict it’s ready for a catch-up run with bitcoin.

Litecoin Monday morning added 0.77 percent to about $72, following strong performance over the weekend. Litecoin has broken out of its trading range on the daily timeframe on Thursday and appears to be consolidating before the next run-up in price.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 22,271 -0.56%
China-Shanghai Composite Index 3,354 -0.84%
Hong Kong –Hang Seng 29,161 -0.13%
South Korea – KOSPI 2,530 -0.15%
Australia-ASX 200 5,950 -0.11%
S&P 500 E-Mini Futures 2,569 -0.24%

 

Asian equity indexes were in red territory on Monday morning, following big losses on Wall Street on Friday.

The Nikkei was down 0.56 percent to 22.271 before midday.

In China, the Shanghai Composite Index was down 0.84 percent to about 3,354 before midday. In Hong Kong, the Hang Seng Index was 0.13 percent lower at around 29,161.

The Chinese financial sector is on notice from the government, as top officials started to push for more coordinated, tougher regulations to fend off systemic financial risk – a top priority by the Chinese government.

The latest indication is sweeping guidelines announced on Friday to rein in risks in the asset management sector, which has been growing fast but problematic due to lack of uniform standards and regulatory loopholes. Analysts say this is just the beginning for what they call “an era of big regulations.”

In South Korea, the Kospi fell 0.15 percent to 2,530 before midday.

Down Under, the ASX 200 was down 0.11 percent to 5,950 before midday.

The S&P 500 E-Mini Futures was down 0.24 percent to 2,569.

As things are relatively quiet on the economic data and earnings front, investors’ focus is on the US tax reform developments. The latest news reports said that US Treasury Secretary Steven Mnuchin hinted that a Republican tax reform bill could reach President Donald Trump’s desk by Christmas.

But many remain cautiously optimistic as at least two Republican lawmakers voiced skepticism about the plan.

Currencies

The Japanese yen gained 0.07 percent the US dollar at midday Monday to 112.01 per dollar.

The Chinese yuan lost 0.15 percent against the US dollar at 6.6346 per dollar.

The Australian dollar also lost 0.19 percent on the dollar, changing hands at 1.3235 per dollar at midday.

Commodities

WTI Oil was down 0.07 percent to $56.74 per barrel.

Brent Crude lost 0.21 percent to $62.58 per barrel.

Gold was down 0.15 percent to $1,291 an ounce.

Business News across Asia

In China, online giants are going offline. E-commerce giant Alibaba Group on Monday announced that it would invest about $2.9 billion for a major stake in China’s top grocer Sun Art Retail Group Ltd.

Take Away: This is part of a broad strategy that Alibaba has called “New Retail,” which is a huge project aimed at integrating online with offline retail. Unmanned physical retail stores have already been set up in Shanghai as part of this push.

In Japan, the latest trade data showed that the world’s third-largest economy is set to see economic recovery in the last quarter of 2017. Official data showed on Monday that exports grew 14 percent in October from last year.

Take Away: The Japanese economy grew 1.4 percent in the third quarter, beating the forecast because of strong external demand from China and elsewhere. Demand is set to remain strong in the fourth quarter, reports say.

Featured image from Pixabay.

Author:
Fredrik Vold is an entrepreneur, financial writer, and technical analysis enthusiast. He has been working and traveling in Asia for several years, and is currently based out of Beijing, China. He closely follows stocks, forex and cryptocurrencies, and is always looking for the next great alternative investment opportunity.