Market Update: Asian Stocks Open Lower as Cryptocurrency Correction Deepens

Asian equities opened lower on Monday, while cryptocurrencies languished in correction territory as investors geared up for an active week in the markets headlined by geopolitics, economic data and corporate earnings.

Stock Markets Edge Lower

Stocks were down across Asia on Monday, as investors shrugged off the biggest advance in U.S. markets in nearly four weeks Friday.

Japanese equity benchmarks were down at least 0.3% but continue to outperform the global market over the past month. The 225-issue Nikkei was down 0.5% by midday. It gained 5% over the past four weeks.

The Hang Seng Index, which trades in the Special Administrative Region of Hong Kong, was down 0.2%.

Down Under, Australia’s S&P/ASX 200 Index rose 0.4% on Monday.

At the time of writing, the MSCI Asia Pacific index had not begun trading. The benchmark has declined in each of the last two weeks.

North American and European futures markets were trading mostly higher on Monday, with Europe’s benchmarks set for an explosive open. The U.K.’s FTSE 100 futures contract was up 62.50 points, while Germany’s DAX contract surged 124 points.

Dow Jones mini futures were up 49 points and the S&P 500 mini climbed 5 points.

Cryptocurrencies Fail to Extend Rally

Cryptocurrencies pulled back sharply from two-month highs at the start of the week, with the total market falling $34 billion to $438.3 billion.

The correction follows four consecutive weeks of upward traction in cryptocurrency prices. Over that period, crypto assets added a combined $220 billion in market cap, signaling the end of the bear market. Bitcoin, the world’s largest digital currency by market cap, also exhibited its longest period of price stability in almost six months as prices came within $34 of $10,000.

The pullback on Monday was accompanied by a slight decline in trading volumes. All majors reported losses, with bitcoin, Ethereum, Ripple XRP and bitcoin cash declining by at least 5.5%.

Contrary to speculation, prices have not declined because of Warren Buffett. who recently compared bitcoin to rat poison. Nor was the decline attributed to CoinMarketCap, which quietly removed from its BTC page over controversy surrounding bitcoin cash. (As we reported Sunday, bitcoin cash actually rose to more than three-month highs amid the controversy, which centers on which cryptocurrency represents the truest expression of Satoshi Nakomoto’s original vision.)

Rather, the declines appear to represent a normal correction in the market following a series of oversized gains. With cryptos averaging $50 billion gains over the last four weeks, profit-taking is to be expected as the bulls attempt new milestones. As we reported Friday, the $500 billion mark is the next critical test for cryptocurrencies.

Market-Moving Events This Week

Investors can expect a deluge of market-moving events over the next five days, beginning with the resumption of NAFTA talks on Monday. President Donald Trump will also decide whether to uphold the Iran nuclear accord or re-impose sanctions on the Islamic state.

On Wednesday, Japanese Prime Minister Shinzo Abe will host South Korean President Moon Jae-in and Chinese Premier Li Keqiang for high-level talks.

On the monetary policy front, the Bank of England (BOE) is scheduled to deliver a policy decision Thursday.

The economic calendar will feature several high-profile reports, including Chinese trade data and U.S. consumer inflation.

In earnings, Walt Disney (DIS), 21st Century Fox (FOXA), Petrobras (PETR4) and Ambev (ABEV3) are scheduled to report quarterly results.

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.

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi