Stock Markets Firm as Bitcoin Futures Make Debut

Asian stocks strengthened Monday after a quiet start, building on Friday’s bounce that led to a global rally, while investors also kept an eye on the start of trading in bitcoin futures.

Prices for the volatile cryptocurrency jumped back above $15,000 as futures trading began on a Cboe Global Markets exchange and within four hours had eclipsed $16,000, according to CoinDesk. Just 24 hours earlier, bitcoin had been at $13,000. It was recently trading at around $16,400.

Market participants have been intrigued by bitcoin’s rise and might look at reinvesting profits there following recent profit-taking in Asian stocks in the wake of big gains across the market this year, said Alex Wijaya, head of Southeast Asia at AxiCorp Financial Services.

After little initial movement, shares in Hong Kong and China rallied as the morning progressed. The Hang Seng Index was recently up 0.8%, helped by 2% gains in oil company Cnooc and banking giant HSBC and a 1% rise in Tencent.

Investors in Hong Kong expect higher interest rates to benefit big banks like HSBC, said Ivan Ip, a stock strategist at UOB Kay Hian. The Hong Kong dollar is loosely pegged to its U.S. counterpart and local banks typically track U.S. interest rates.

In China, the Shenzhen Composite Index climbed 1.3 and startup-heavy ChiNext Price Index gained 1.2%.

The Chinese central bank injected a net 20 billion yuan ($3.02 billion) into money markets Monday after draining liquidity for two weeks, providing a lift to equities traders’ moods in China.

Japanese stocks perked up after the lunch break despite the yen’s weakness, with the Nikkei Stock Average rallying into the close to finish up 0.6%.

After its best week of the year, the dollar broadly posted slight gains in Asia on Monday and was at Yen113.55 from Yen113.39 at the end of Japanese stock trading Friday.

Given the index’s 20% gains this year, it isn’t unexpected to see some profit-taking toward the year-end, said Andrew Clarke, head of trading at Mirabaud (Asia).

New Zealand’s stock benchmark finished at session highs, rising 0.5% to notch another record close. But Australia’s S&P/ASX 200 rose less than 0.1% despite gains in commodity stocks as most bank majors pulled back.

Oil futures were recently down 0.2%, reversing some of Friday’s increase.

Taiwan stocks held on to early gains, with the Taiex ending up 0.7% as Apple product assembler Hon Hai Precision Industry rebounded 2.6%.

S&P 500 futures were recently up less than 0.1%.

The initial muted trading in Asia could suggest a wait-and-see approach investors are taking as they await policy statements from central banks in the U.S., U.K. and eurozone later this week, watching for potential road maps for 2018.

“Investors have continued to take a sanguine view of the potential impact” of easy-policy unwinding, said Camilia Goh, an executive director for equity research at the Bank of Singapore. That could lead to a period of “potentially higher market volatility” as monetary tightening starts amid stretched equity-market valuations, she said.

Source: Dow Jones

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