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

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falling

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.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.3 stars on average, based on 37 rated postsFredrik 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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Market Overview

Relatively Vigorous

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Hi Everyone,

Social media is abuzz with the news that Instagram’s founders are leaving the company and handing the keys over to Mark Zuckerberg.

When they initially sold Instagram to Facebook for $1 billion in 2012, Mike Krieger and Kevin Systrom were kept in post, to manage the creative development of the rapidly growing platform.

However, after many clashes with their parent company and its founder over politics and product features, it seems the two are ready to move on to their next adventure.

Several $FB holders that I’ve spoken with recently have shrugged off the recent trend of users migrating away from Facebook by stating that the social network giant has managed to buy out most of the competition.

After the co-founder of WhatsApp famously urged his followers to delete facebook in April, the bigger question now becomes, will Zuckerberg manage to retain the attention of the public while those responsible for building up these platforms are working against him.

Facebook’s stock has had a rather turbulent year so far. It will be interesting to see how the shares open up today.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Knife to Throat Negotiations
  • Don’t Rush Central Bankers
  • Backtracking Crypto Slander

Please note: All data, figures & graphs are valid as of September 25th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Stocks in Asia are down sharply today, as authorities are using vivid imagery as a negotiating tool with the United States.

It’s clear that China is willing to talk and the latest rhetoric seems to be more about respect than leverage. A gentle reminder that it’s difficult to negotiate when you’re backed into a corner.

The China50 index has now revealed a new trading range (solid yellow lines) between 10,750 and 12,000 points. Both of these levels have proven to be critical junctures (dotted yellow lines) over the last two years.

In Japan, on the other hand, stocks are flying as the central bank has offered even more support to the market.

Central Bank Yapping

The Bank of Japan has been among the most aggressive institutions when it comes to monetary policy and quantitative easing. A speech this morning from BoJ governor Kuroda confirms that this attitude isn’t about to change…

This means that, despite printing trillions of Yen and owning more than 75% of Japan’s ETFs, the Bank hasn’t quite accomplished its goals yet.

In a surprise turn of events, Governor Kuroda did acknowledge that there may be side effects to this aggressive policy. Yet, he insists that the bank is ready to ease further if needed.

Over in Europe, Mario Draghi from the European Central Bank is making waves of his own, saying that there has been a “relatively vigorous pick-up in inflation.”

Personally, I’m wondering how to interpret this statement. What does “relatively vigorous” mean, anyway?

Nonetheless, any sort of pick-up in inflation, no matter what adjectives we use to describe it, could move the ECB’s timetable forward. We’re seeing a relatively vigorous pick-up in the Euro, which is now testing $1.18.

Tomorrow, we’ll get a critical interest rate decision from the US Federal Reserve, with the odds in favour of a 0.25% hike. More on that in tomorrow’s update. Trading stands a good chance of being muted going into the announcement.

Crypto Backtracking

As crypto prices seem to be walking back their gains from last week, another financial institution seems to be backtracking on their crypto policy.

The Bank of International Settlements has put out a new study, which reveals that news events regarding crypto regulations do in fact have a fair impact on market prices.

As indicated above, their report includes the following statement…

This represents a complete turnaround in the BIS’s sentiment towards cryptocurrencies and comes in stark contrast to a statement made in February by BIS General Manager…

So not only have they flipped their opinion of whether or not it should be traded, they’re now giving advice to cryptotraders on how to trade. Hooray!!

Have a wonderful day ahead!

Wishing you an amazing weekend ahead!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan | Twitter: @MatiGreenspan | LinkedIn: MatiGreenspan | Facebook:MatiGreenspan

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 129 rated postsSenior Market Analyst at Etoro.com.




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Market Overview

Market Update: U.S. Stocks Rattled by Trade War; Cryptocurrencies Pull Back from Multi-Week High

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U.S. stocks declined sharply on Monday, with the Dow and S&P 500 pulling back from record highs on news that China and the United States had cancelled upcoming trade talks. Meanwhile, cryptocurrencies slipped from recent highs on profit-taking.

Stocks Fall

All of Wall Street’s major indexes posted declines on Monday. The S&P 500 Index slipped 0.4% to 2,919.37, with seven of 11 primary sectors finishing in negative territory. Consumer staples were the biggest decliners percentage-wise; industrials and materials also finished firmly lower.

Shares of energy companies bucked the downtrend, rising more than 1% on average, as international crude prices hit four-year highs.

The much narrower Dow Jones Industrial Average declined 181.32 points, or 0.7%, to 26,562.18. The technology-focused Nasdaq Composite Index reversed losses in afternoon trading, rising 0.1% to 7,993.25.

The CBOE VIX, also known as the fear index, rose 5.2% to 12.29. VIX typically rises when stocks fall and vice versa. Levels below 20 generally point to complacent market conditions.

U.S.-China Trade Talks Cancelled

Equity markets were under pressure as new tariffs on U.S. and Chinese goods came into effect. Both countries have also cancelled upcoming trade talks after the Trump administration announced a 10% levy on $200 billion in Chinese goods. In response, Beijing slapped import duties on 5,000 U.S. products and rescinded its proposal to send a trade delegation to China.

The new round of tariffs on Chinese goods came into effect on Monday. The current rate of 10% is set to rise to 25% by year-end if China doesn’t comply with Washington’s demands.

The Trump administration is doubling down on its threats because China cannot match the U.S. dollar for dollar in a trade war. Beijing’s massive surplus with the U.S. gives Washington more leverage in negotiating the new terms of trade.

Cryptocurrencies Stabilize After Sharp Correction

The cryptocurrency market was valued at roughly $220 billion Monday afternoon, well off its most recent high of $230 billion. The sharp pullback affected all major coins, though altcoins were disproportionately impacted.

XRP and XLM, the market’s top performers last week, were each down double digits through the early morning session. By the afternoon, XRP had pared its losses to 7.5% and was trading at $0.524. Meanwhile, Stellar’s XLM was worth $0.264, having declined 5.7% over 24 hours.

Bitcoin stemmed its intraday loss to less than 1% as markets continued to stabilize. The leading digital currency is currently trading around $6,643 for a 52% share of the overall market.

As Hacked reported earlier, a pullback in the market was expected following the rapid gains in altcoins and tokens over the past five days. Although the gains were largely predicated on positive fundamental news, the bulls have yet to make a convincing break higher. This means the status quo of lower for longer is still very much in effect.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 613 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Analysis

Stocks Pull Back as China Exits Trade Talks

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Global stock markets have spent the better part of the day in the red, although the losses are muted, and markets are slightly choppy before Wednesday’s Fed meeting. China pulled out of the scheduled trade talks with the US following last week’s tariff-escalation and that put pressure on risk assets globally. Chinese and Japanese markets were closed today, and that also attributed to the lower than usual liquidity and trading activity.

Dow 30 Index Futures, 4-Hour Chart Analysis

European Central bank President Mario Draghi warned of a “vigorous” pick-up in inflation, which triggered a selloff in the dollar and bonds across the globe, while putting more pressure on risk assets too. The dollar almost regained all of its losses since Draghi’s speech and with the looming fed decision in mind, further choppy and nervous trading is expected in the Greenback, especially following the recent surge in Treasury yields.

Russell 2000, 4-Hour Chart Analysis

The Dow and the S&P 500 both continued to retreat off last week’s record highs, as Friday’s trend resumed, and despite the bounce in the market leading tech giants, the Nasdaq is also lower. On a negative note, small-caps are trading at a 1-month low, as measured by the Russell 2000, which could mean that the US market might be ready to roll over into a correction.

The main European indices are holding on to most of last week’s gains in the meantime, but only the energy segment is clearly positive today, with the help of the strong rally in the price of crude oil.

Dollar and Euro in Focus Before the FED

EUR/USD, 4-Hour Chart Analysis

The EUR/USD pair will see fireworks for sure this week, and although the pair reached the 1.18 level today, it’s still in a zone with strong resistance and bulls still can’t conclude a successful breakout, with the 1.1675 level still being close form a technical perspective. For now, the short-term uptrend is intact, but a quick move below 1.1750 could mark a reversal.

Emerging market currencies are mixed, with the Turkish Lira trading notably higher thanks to the possible release of Pastor Brunson, who has been a major catalyst for the diplomatic troubles between the US and Turkey. The release of the Pastor could stabilize the currency, but another major global risk-off shift could hurt the vulnerable country again, as yields continue to rise globally.

WTI Crude Oil Futures, 4-Hour Chart Analysis

As Saudi Arabia basically ignored Trump’s call for lower oil prices, the recent strength in the commodity culminated in a break-out to new 10 week highs in the WTI contract, which topped the $72 per barrel level for the first time since early July. Natural gas hit $3, and it is on the verge of breaking out to a new 7-month high too, as the whole energy segment is rallying.

Elsewhere in the commodity segment, the Dollar’s choppy price action led to a mixed picture, with copper pulling back slightly from last week’s highs, while gold is still fighting to stay above the $1200 per ounce level as it has been the case for several weeks now.

Featured image from Shutterstock

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 353 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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