Asian Market Update – Monday: Coins gain on positive news from government, tech giants

Bitcoin bull run

The Big Question: Are coins ready for another bull run?

Prices of cryptocurrencies pointed higher overnight during the Asian trading session Monday, as positive news out of Canada, Estonia and tech giants such as Google and Facebook have likely eased investors’ concerns following blows from China last week.

Before midday, the price of bitcoin climbed 3.82 percent to $3,802. Having surged from around $3,660 during early morning trading, the digital coin was still pointing higher around midday in Asia.

The ethereum price saw an even larger increase on Monday morning, gaining more than 10 percent at one point before falling back to 8.60 percent to $279. The ethereum price surged from about $256 to $283 at one point. The digital currency has now been in an uptrend for two straight days.

The gain in bitcoin and ethereum prices on Monday morning followed scores of positive news from governments in Estonia and Canada.

In Estonia, officials struck a positive tone toward initial coin offerings, the exact opposite of what we saw out of Beijing, where officials banned ICOs. The Estonian government is reportedly mulling to raise funds through ICOs.

In Canada, while warned against risks, officials generally signaled that tokens are acceptable, as they advised that those who intend to issue ICOs to reach out to local securities regulators to discuss it. Though the Canadian government did not explicitly spell out its support, the move could be seen as a way of giving a green light to ICOs.

Also, some tech giants such as Microsoft, Google, Facebook, Apple and Mozilla have reportedly developed a browser interface that accepts cryptocurrencies when making purchases online.

If the companies went ahead with the interfaces, it would expand the use of cryptocurrencies and likely drive up the demand and thus prices.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
China-Shanghai Composite Index 3,363.40 0.29%
Hong Kong –Hang Seng 28,088.85 1.01%
Australia-ASX 200 5,725.90 0.54%
South Korea-KOSPI 2,411.43 1.06%

Major Asian indexes shrugged off earlier losses and started off the week on a positive note Monday morning.

In Greater China, the Shanghai Composite Index skidded 0.29 percent to 3,363. before midday. In Hong Kong, the Hang Seng Index surged 1.01 percent to 28,088.

In South Korea, the KOSPI index gained 1.06 percent to 2,411.

Down under, the ASX 200 climbed 0.54 percent to 5,725.

In Japan, the Tokyo Stock Exchange was closed Monday for a public holiday.

The gains in Asian stocks on Monday followed a week of turmoil, as geopolitical tensions on the Korea Peninsula continued brewing, with North Korea constantly threatening war with South Korea, the US and Japan, and firing off missiles.

Though investors should be used to North Korea missile launches by now, stocks still suffer for at least a short period every time the rogue regime makes a move.

However, it seems investors are now more concerned with monetary policies. This week all eyes are on the meeting of the US Federal Open Market Committee (FOMC), as markets are looking for clues on direction of US monetary policies. The meeting will be held on Thursday.

Currencies

The Japanese yen lost 0.44 percent against the US dollar at Midday on Monday. The USD/JPY rate was at 111.18. The greenback has been in an uptrend against the yen since Friday.

The Chinese yuan strengthened 0.04 percent to 6.5474 per dollar, shooting down expectations that the yuan would decline following adjustments from China’s central bank that allows the yuan to move more freely.

The Australian dollar gained 0.24 percent on the dollar, changing hands at 1.2457 per dollar at midday.

Commodities

WTI Oil was up 0.16 percent to $49.88 per barrel.

Brent Crude gained 0.4 percent to $55.70 per barrel.

Gold was also down 0.73 percent to $1,317 an ounce.

Business News across Asia

In China, a growing number of Chinese homebuyers are rushing into some Southeast Asian countries such as Thailand and Cambodia to buy houses. Though the US and Australia remain the top two most favored places for Chinese homebuyers, tight restrictions placed on the use of foreign currencies means more investors turn to Southeast Asia, which is covered by policy supports under China’s Belt and Road initiative.

Take away: With foreign exchange restrictions most likely to remain in place for the foreseeable future, expect more investment from China in real estate and other sectors in countries along the Belt and Road routes.

In India, a visit from Japanese Prime Minister Shinzo Abe still generates much of the news headlines in India. The visit took place last week, during which India and Japan signed a slew of deals on cooperation in India’s massive infrastructure sector, including Japanese investment in railroads and other projects.

Take Away: It is rare that a trip of foreign leaders receive such massive media attention. However, the laser-like focus on Abe’s visit highlights the close ties of the two countries, with Japanese companies enthusiastically discovering great potentials in India.

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.