Asian Market Update – Monday: Ethereum Rallies as Bitcoin Tumble; Asian Stocks Higher

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Ethereum goes berserk in the new year

Ethereum continued on its wild ride higher during the Asian trading session Monday. By 4 pm in Hong Kong, ethereum was up 7 percent to $1,196, after reaching an all-time high of $1,228 earlier in the morning.

The solid gain on Monday morning extended a strong uptrend that started at the beginning of the year. Since December 31, ethereum has gained more than 50 percent.

With no specific news or triggers evident that could explain the rally, the ethereum rally right now appears to be driven primarily by psychology, fear of missing out (FOMO), and trend-following traders jumping on the bandwagon.

While ethereum rallied, bitcoin continued to tumble. By afternoon in Asia, bitcoin was down 2.7 percent to $15,710 on Coinbase. Bitcoin lost about 5.4 percent on Sunday, ending a 5-day winning streak, which saw the virtual currency gaining around 21 percent.

Litecoin price also lost about 3 percent to $264 at midday in Asian trading. The virtual currency sold off about 2.6 percent on Sunday, after moving up by 15 percent since Friday.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 23,714 0.89%
China-Shanghai Composite Index 3,403 0.35%
Hong Kong –Hang Seng 30,749 -0.04%
South Korea-KOSPI 2,513 0.62%
Australia-ASX 200 6,129 0.11%
S&P 500 E-Mini Futures 2,745 0.09%

Major Asian equity markets pointed higher on Monday, extending a New Year’s rally and shooting for new all-time highs. A brighter outlook for the global economy appears to be boosting investors confidence, while geopolitical and other market driving forces remaining quiet so far.

Japanese stocks led the way on Monday morning, with the Nikkei 225 index gaining 0.89 percent at midday to 23,714. The benchmark has gained nearly 500 points since Thursday, up from 23,225.

Japanese Prime Ministry Shinzo Abe called on the Bank of Japan to maintain efforts to prop up the Japanese economy, but remained mum about the appointment of the BOJ’s next chief. The current chief has advocated a continuation of ultra-easy monetary policies despite missed inflation targets.

In South Korea, the Kospi was up 0.62 percent to 2,513 at midday.

On the Chinese mainland, the Shanghai Composite Index was up 0.35 percent at midday on Monday to 3,403. In Hong Kong, the Hang Seng Index was down 0.04 percent to 30,749 at midday.

The People’s Bank of China skipped a scheduled cash injection into the market through its open market operations for the 11th straight trading day, as the central bank has determined that liquidity levels were “relatively high.”

Down under, the ASX 200 was 0.11 percent higher at 6,129 at midday.

The S&P 500 E-Mini Futures was up 0.09 percent to 2,745.

Market sentiment has improved by a slew of upbeat data last week, including manufacturing PMI in China and Japan, a solid US jobs report. This week, investors are waiting for China’s inflation data on Wednesday, US consumer prices and retail sales, expected on Friday, and global trade figures on Friday.

Currencies

The Japanese yen lost 0.14 percent against the US dollar at midday Monday, changing hands at 113.17 per dollar.

The Chinese yuan up gained a slight 0.01 percent against the US dollar at 6.4866 per dollar.

The Australian dollar lost 0.25 percent on the dollar, changing hands at 1.2746 per dollar at midday.

Commodities

WTI Oil was up 0.02 percent to $61.58 per barrel at midday on Monday.

Brent Crude gained 0.03 percent to $67.73 per barrel.

Gold was down 0.02 percent to $1,320 an ounce.

News across Asia

In China, French president Emmanuel Macron has arrived in the northwestern historic city of Xi’an for his first official visit to China. Macron is due to arrive in Beijing and hold talks with his Chinese counterpart Xi Jinping on Tuesday. As is customary for such visits, Macron’s trip is expected to see a slew of business deals between Chinese and French companies.

Take away: Chinese companies have already invested heavily in France, with about 6 billion euros of Chinese investments in France so far. Though Chinese investments overseas have declined in recent months, companies are still eyeing opportunities overseas.

In Vietnam, a campaign to crack down on fraud and mismanagement in state-owned energy companies and banks have gathered case, as the country started the high-profile trial of 22 executives of the state oil firm PetroVietnam on Monday. The executives are accused of mismanagement that resulted in severe losses for the oil firm, and some could reportedly face the death penalty.

Take away: Vietnam has been trying to crack down on fraud and mismanagement in its state-owned assets, amid wide-spread corruption in sectors such as energy and banking.

Featured image from Pixabay.

Disclaimer: The author owns bitcoin, ethereum and litecoin. He holds investment positions in the coins, but does not engage in short-term trading.

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.

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