Markets volatile as Asian stocks tumble, bitcoin soars

·3 min read
Bitcoin was boosted by electric carmaker Teslam which expressed fresh support for the world's most popular cryptocurrency

Financial markets kicked off the week on a volatile note Monday, as Asian stocks tumbled and bitcoin soared.

European stocks were mixed at the close, while the Dow Jones index was just slightly stronger in midday New York trading.

Traders were focused on a meeting of the US Federal Reserve on Wednesday and company results this week from tech heavyweights including Alphabet, Amazon, Apple, Microsoft and Tesla.

In Asia, Hong Kong stocks led losses early in the day after Beijing at the weekend cracked down further on China's tech firms, while education companies were hammered as the Beijing government unveiled sweeping reforms of the sector.

Traders also continued to worry over the fast-spreading Delta coronavirus variant, which has sent infections spiking and forced some governments to reimpose economically painful lockdowns or other containment measures.

Tokyo closed higher however, as traders returning from a Japanese public holiday caught up with gains made elsewhere last week, when stocks in New York reached record highs.

This week, "uppermost in investors' minds will be the Federal Reserve rate meeting" starting Tuesday, commented Michael Hewson, chief market analyst at CMC Markets UK.

The meetings "are always important for the markets, especially when we are getting closer and closer to the time when there will be a shift in the central bank’s policy stance," added Fawad Razaqzada, an analyst at ThinkMarkets.

In China meanwhile, education companies were battered after China unveiled reforms that will make a huge change to how they do business.

Arguing that the sector had been "hijacked by capital", Beijing said it would prevent firms teaching school curriculums from making a profit, raising capital or going public.

JP Morgan Chase analysts said it was uncertain whether firms could continue to be traded on stock markets. "In our view, this makes these stocks virtually un-investable," it said.

- Bitcoin nears $40,000 -

Bitcoin leapt close to $40,000 after electric automaker Tesla expressed fresh support for the world's most popular cryptocurrency.

The unit gained 15 percent in Asian trade to a one-month high at $39,681, buoyed also by reports that US retail titan Amazon was mulling the use of crypto technology.

Bitcoin later eased to $38,550 in Europe, far from its record of close to $65,000 reached in April.

"The bulls are back in town, and this time it seems like they are back with a vengeance," said AvaTrade analyst Naeem Aslam.

"One of the biggest events was (Tesla boss) Elon Musk once again showing support for bitcoin and indicating the fact that Tesla would likely start accepting bitcoin again," Aslam remarked.

- Key figures around 1600 GMT -

New York - Dow: UP less than 0.1 percent at 35,085.69 points

EURO STOXX 50: DOWN 0.2 percent at 4,102.59

London - FTSE 100: FLAT at 7,025.43 (close)

Frankfurt - DAX 30: DOWN 0.3 percent at 15,618.98 (close)

Paris - CAC 40: UP 0.2 percent at 6,578.60 (close)

Hong Kong - Hang Seng Index: DOWN 4.1 percent at 26,192.32 (close)

Shanghai - Composite: DOWN 2.3 percent at 3,467.44 (close)

Tokyo - Nikkei 225: UP 1.0 percent at 27,833.92 (close)

Euro/dollar: UP at $1.1810 from $1.1770 on Friday

Pound/dollar: UP at $1.3833 from $1.3754

Euro/pound: DOWN at 85.37 pence from 85.61 pence

Dollar/yen: DOWN at 110.31 yen from 110.51 yen

Brent North Sea crude: DOWN less than 0.1 percent at $74.01 per barrel

West Texas Intermediate: DOWN 0.4 percent at $71.70 per barrel


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