HONG KONG – Asian markets fell today in holiday-thinned trade, with investors awaiting developments in United States stimulus talks, while bitcoin hit a new record as it crept towards US$50,000 (RM202,125).
Oil prices also retreated from their 13-month highs after investors were given a reality check on expectations for demand this year, despite expectations of a strong global economic recovery.
Equities across the world have rallied this year on the back of Covid-19 vaccine roll-outs, falling infection and death rates, and optimism that US President Joe Biden will push through most of his US$1.9 trillion rescue package.
Hopes for his spending deal were given a boost yesterday by news that first-time claims for unemployment benefits fell less than estimated last week.
The S&P 500 and Nasdaq hit new records again, though the Dow was marginally lower.
With most of Asia closed for the Chinese New Year holiday, business is limited. Tokyo, Sydney and Wellington were all in the red.
But, Axi strategist Stephen Innes said: “With vaccination roll-outs on turbo boost and the current lockdown abatement doing what it is supposed to do by taming the virus spread, there is a solid chance that reported Covid-19 cases could shift close to zero in the second quarter.”
He said Biden’s fiscal package and a planned infrastructure programme that is in the works will provide a “double lift-off. As a result, the economic mood music should attune higher in March, and the recovery could be set to surge in the second quarter”.
Bitcoin continues to hit new highs, peaking at US$48,930 today, having been given another boost after MasterCard and US bank BNY Mellon moved to make it easier for people to use the cryptocurrency.
This comes days after Tesla announced it has bought US$1.5 billion in the currency, and will soon accept it as payment.
However, a former top US regulator warned against buying into the unit.
Sheila Bair, who was chair of the US Federal Deposit Insurance Corporation during the global financial crisis, said: “Stay away from it.”
She told Bloomberg Radio: “It’s volatile. It’s at nosebleed levels now. We don’t know how sustainable that is.
“If you’re a very wealthy person with some money to risk, fine, but no – I don’t have a lot of confidence in it.”
Oil prices extended yesterday’s drop, having risen for more than a week to highs not seen since January last year.
The commodity took a hit after the International Energy Agency said demand will not be as strong as forecast.
“Renewed lockdowns, stringent mobility restrictions and a rather slow vaccine roll-out in Europe have delayed the anticipated rebound,” it said in a monthly report.
Analysts said traders will keep a keen eye on next month’s meeting of the Organisation of the Petroleum Exporting Countries and other top producers, with speculation that they could begin turning the taps on after cutting output for most of last year in reaction to a price rout.
Key figures around 0215 GMT
Tokyo – Nikkei 225: DOWN 0.2% to 29,490.35
Sydney – S&P/ASX 200: DOWN 0.3% to 6,827.80
Shanghai – Composite: Closed for holiday
Hong Kong – Hang Seng: Closed for holiday
Pound/dollar: DOWN at US$1.3801 from US$1.3816 at 2200 GMT
Euro/dollar: DOWN at US$1.2125 from US$1.2131
Euro/pound: UP at 87.88 pence from 87.77 pence
Dollar/yen: UP at ¥104.82 from ¥104.74
West Texas Intermediate: DOWN 0.8% at US$57.79 per barrel
Brent North Sea crude: DOWN 0.7% at US$60.74 per barrel
New York – Dow: FLAT at 31,430.30 (close)
London – FTSE 100: UP less than 0.1 to 6,528.72 (close). – AFP, February 12, 2021
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