Asian Market Update – Tuesday: Cryptocurrencies extend rally; Asian stocks mixed on China woes

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The big question: Will we see bitcoin $10,000 today?

Prices of main cryptocurrencies were in a strong uptrend overnight and showed signs of reaching new highs following a slight sell-off late Monday.

Since 4 am Hong Kong time today, bitcoin has surged more than $210, from about $9,553 to about $9,850, breaking the previous high seen on Monday. As of midday Tuesday, bitcoin was up 0.83 percent for the day to trade just below the $10,000 mark.

In earlier trading on Tuesday morning, bitcoin dropped to as low as $9,553 before regaining momentum.

The price of ethereum also posted a gain of about $7 from 4 am this morning to about $478 at 6 am before it came back down. As of midday, ethereum was still down a slight 0.1 percent to $477.

After reaching a record high of $492 on Monday afternoon, ethereum went down into a fall, dropping to as low as about $471.

Litecoin also followed the trends of bitcoin and ethereum. Since 4 am this morning, litecoin surged from $88 to $91 at 7 am. As of midday in Asian trading, litecoin was up 1.3 percent to $92, after hitting a record high of close to $94 on Monday.

The recent solid rally in cryptocurrency prices have prompted fresh skepticism, mostly aimed at the speculative nature of cryptocurrency investments. Latest is Bob Doll, a wall street strategist, saying that the record-high bitcoin price rally feels speculative, according to CCN. But Doll, who is the chief equity strategist at Nuveen Asset Management, added that it has been an “amazing run.”

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 22,543 0.21%
China-Shanghai Composite Index 3,311 -0.33%
Hong Kong –Hang Seng 29,554 -0.44%
South Korea-KOSPI 2,518 0.42%
Australia-ASX 200 5,990 0.03%
S&P 500 E-Mini Futures 2,599 -0.10%

Most major Asian equities markets were in a mixed mode on Tuesday morning, further selling off from the decade highs reached earlier, as the market in China continued to point lower, prompting some to fear that another round of sharp sell-offs could take place.

On the Chinese mainland, the Shanghai Composite Index was off 0.33 percent to 3,311 before midday, extending a downtrend that started on Thursday, when the index dropped more than 2 percent – its largest loss in a single day this year.

Mainland stocks have been relatively stable this year compared to last year and the year before that when it crashed, but the downturn on Friday has some worried that investors could be preparing for another big sell-off.

The worries came on the heel of tightened financial regulations to fend off systemic risks under a new powerful committee that’s recently been formed to coordinate efforts by the country’s regulators.

In Hong Kong, the Hang Seng Index lost 0.44 percent to around 29,554 before midday. That’s nearly 200 points lower than the level around the same time yesterday. Though the Hong Kong stock market is independent from the mainland, it’s often impacted by sentiment on the mainland.

In Japan, the Nikkei 225 was up 0.21 percent to 22, 543 at midday on Tuesday.

In South Korea, the Kospi gained 0.42 percent to around 2,518 shortly after midday.

Down under, the ASX 200 was up 0.03 percent to 5,990.

The S&P 500 E-Mini Futures was down 0.1 percent to 2,599.

Investors in Asia are also looking at developments of the US tax reform efforts. The US House of Representatives and the Senate are scheduled to take various votes this week to pave the way for the final bill, though Republicans don’t appear to have enough votes and thus continues to lobby some GOP lawmakers to vote for it.

Currencies

The Japanese yen depreciated 0.15 percent the US dollar at midday Tuesday to 111.24 per dollar.

The Chinese yuan lost 0.17 percent against the US dollar at 6.6078 per dollar.

The Australian dollar firmed 0.05 percent on the dollar, changing hands at 1.3146 per dollar at midday.

Commodities

WTI Oil was down 0.16 percent to $57.73 per barrel.

Brent Crude lost 0.06 percent to $63.67 per barrel.

Gold was up 0.01 percent to $1,294 an ounce.

News across Asia

In Japan, Guoshi Kataoka, a board member of the Bank of Japan, has called on the central bank to expand stimulus further to reach the inflation target in an effort to avoid any negative impact of monetary easing on the economy. He said the country is premature in talking about ending its massive stimulus program.

Take away: In the latest decision by the BOJ last month, it decided to keep its monetary policy steady and signaled that the central bank should exit the stimulus programs.

In China, a sweeping effort by Beijing authorities to eradicate fire risks after a huge fire that killed 19 people have impacted logistics companies in the capital region. Authorities have been clearing illegal renting at risky apartments in the suburbs that are filled with logistics workers, often hidden in the basements of distribution centers and factories.

Take away: The effort could further impact food deliveries and other services that residents in the Chinese capital have become used to as many workers are reportedly forced out of their apartments.

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.