Asian shares laze in holiday lull; bitcoin powers higher

Reuters Tokyo/New York | Updated on February 12, 2021 Published on February 12, 2021

Many bourses shut for Lunar New Year; bitcoin sets record on more signs of acceptance; weak 30-year Treasury auction pushes up yields

Asian shares hovered just below a record high on Friday as mixed US economic data caused some investors to show restraint after a global stock market rally pushed many bourses to dizzying heights.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.03 per cent, trading just shy of an all-time high reached in the previous session. Australian stocks lost 0.31 per cent. Shares in Tokyo fell 0.32 per cent, pulling back from 30-year highs.

Futures for the S&P 500 were off 0.12 per cent.

Also read: ‘Indian stock markets are now a stock picker’s delight’

Markets in Greater China and most of Southeast Asia are closed on Friday for the Lunar New Year holiday. China's stock and bond markets, foreign exchange and commodity futures markets are closed through February 17 for the holiday.

Bitcoin surged yet again to a new record high after BNY Mellon said it will offer custodian services for cryptocurrencies. The dollar headed for a weekly loss, stung by bitcoin's assent and disappointing US economic data.

Trading in the United States and Europe on Thursday did not move prices enough to provide much direction, said Tom Piotrowski, a market analyst at CommSec in Sydney.

"We didn't get much of a lead-in from the northern hemisphere," Piotrowski said. "Markets are in a bit of a holding pattern waiting for the next catalyst and it is just a question of whether that catalyst is going to be a positive one or a negative one."

World stock markets were holding close to record highs on Thursday as investors weighed some tepid economic data against increasing vaccinations against Covid-19 and the prospect that more government spending and continued cheap money from central banks will drive higher growth and, eventually, inflation.

The MSCI world equity index, which tracks shares in 49 countries, fell 0.12 per cent on Friday, also pulling back from a record high.

On Wall Street, the Nasdaq and S&P 500 eked out gains of 0.4 per cent and 0.2 per cent, respectively, while the Dow Jones Industrial Average slipped 0.02 per cent.

Prices held near records as investors bet on more government spending, although enthusiasm was tempered when US President Joe Biden said that China was poised to "eat our lunch," raising fears of renewed strain on Sino-US ties.

US weekly unemployment claims fell less than expected and core consumer prices rose at a slower pace, which caused some traders to temper the optimism about the economic outlook. Cryptocurrency bitcoin reached a record high of $49,000 before paring gains to trade up 0.57 per cent at $48,282. BNY Mellon said it will form a new unit to help clients hold, transfer and issue digital assets.

That came just days after Elon Musk's Tesla revealed it had bought $1.5 billion worth of the cryptocurrency and would soon accept it as a form of payment for its cars.

Spot gold fell 0.22 per cent to $1,821.86 per ounce. US gold futures fell 0.19 per cent to $1,823.30. Gold prices are still on track for their best week in three amid broad dollar selling.

The dollar index drifted 0.02 per cent lower on Friday, on course for a 0.6 per cent weekly decline.

Soft demand at an auction of $27 billion of new 30-year Treasuries on Thursday continued to weigh on prices in Asia on Friday.

The yield on 10-year US Treasuries rose to1.1632 per cent, while the 30-year yield edged up to1.9468 per cent.

Brent crude fell 0.69 per cent to $60.72 a barrel, having dropped half a per cent the previous session. US oil fell 0.81 per cent to $57.77 a barrel, after falling by 0.8 per cent on Thursday.

OPEC cut its demand forecast and the International Energy Agency said the market was still oversupplied, which cast a gloom over energy markets.

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Published on February 12, 2021
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