Asian Market Update – Thursday: Coins drop after South Korean crackdown; Asian stocks weaken

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South Korea preparing ban on cryptocurrency trading

Cryptocurrencies ranging from bitcoin to ethereum and ripple were all down during the Asian trading session on Thursday, as news broke that the South Korean government is preparing legislation that would effectively ban cryptocurrency trading.

During afternoon trading in Asia, bitcoin was down by 7 percent for the day, after recovering from an even steeper fall earlier in the morning. The fall today means that bitcoin is back below the $14,000, a level last seen during the final days of 2017.

Ethereum also fell sharply after the news broke, before it recovered large parts of the losses later in the trading session. By 5 pm in Hong Kong, ethereum was down a slight 0.65 percent to $1,239.

Ripple XRP, which recently lost its postion as the number 2 coin to ethereum, was down by nearly 9 percent at the time of writing, after recovering from an even greater loss earlier in the morning.

Bitcoin’s silver, litecoin, was down by around 5 percent at the same time.

The news about a possible cryptocurrency trading ban out of South Korea hit the markets hard, causing most coins to sell off sharply in an immediate reaction, before recovering some of the losses.

According to Yonhap News, and quoted by CCN, South Korea’s minister of justice stated:

“The ministry is preparing legislation that basically bans any transactions based on a virtual currency through the trading floor. We have grave concerns about [the craze over] virtual currency and [a shutdown] would be one of the goals we are aiming for.”

Main Market Movers – Midday Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 23,710 -0.33%
China-Shanghai Composite Index 3,425 0.10%
Hong Kong – Hang Seng 31,120 0.15%
South Korea-KOSPI 2,487 -0.47%
Australia-ASX 200 6,068 -0.48%
S&P 500 E-Mini Futures 2,753 0.10%

Asian stocks were mixed on Thursday, with some news reports citing concerns about protectionism from the US as reason for the muted trading.

At the end of the trading day in Japan, the Nikkei 225 index was down by 0.33 percent to 23,710.

In Hong Kong, the Hang Seng Index was up a slight 0.15 percent to 31,120 at midday, making Hong Kong the brightest spot among Asian stock markets today.

In China, the Shanghai Composite Index was up 0.10 percent at midday on Tuesday to 3,425.

According to a report by the South China Morning Post, Trump may be ready to take “tough action” on trade with China. Trump has previously hinted that China has received preferential treatment from him in an effort to solve the North Korean nuclear situation. If that situation calms, all signs point to a much tougher stance on trade with China in the coming months and years.

In South Korea, the Kospi Index was down by 0.47 percent to 2,487 by the end of the trading day.

Down under, the ASX 200 was 0.48 percent lower, ending the day at 6,068.

The S&P 500 E-Mini Futures was down 0.10 percent to 2,753.

Currencies

The Japanese yen lost 0.17 percent against the US dollar as Tokyo trading ended on Thursday, changing hands at 111.59 per dollar.

The Chinese yuan lost 0.07 percent against the US dollar, trading at 6.5070 per dollar.

The loss in the yuan today came after a sharp sell-off in the US dollar yesterday, following media reports and widespread speculation that China may stop investing in US Treasury bonds. China has long been the world’s largest investor in US debt.

The Australian dollar firmed 0.34 percent on the US dollar, changing hands at 1.2707 per US dollar at the end of Australian trading.

Commodities

WTI Oil was up 0.35 percent to $63.69 per barrel on Thursday.

Brent Crude gained 0.23 percent to $69.27 per barrel.

Gold was up 0.13 percent to $1,318 an ounce.

News across Asia

In China, there are worries that Trump’s tax and trade policies may force the country to slow down the opening up of their currency and financial markets. According to Hong Kong-based newspaper SCMP, US politics and other international events may force Beijing to postpone its goal of making the Chinese Yuan a freely convertible currency, a significant shift from the current capital and foreign exchange restrictions.

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.