Bitcoin rose struck a fresh record high Monday but stock markets mostly fell as traders awaited more signals on the outlook for US interest rates.
Bitcoin peaked at $72,385 Monday as the world’s most popular cryptocurrency won further support on greater trading accessibility and dollar weakness.
Gold was at $2,188.30 an ounce Monday, holding near its record high of $2,195 it hit Friday.
“Years of persistent inflation and the depreciation of fiat currencies have heightened interest in gold and bitcoin, viewed by many as the ultimate store of value and a reliable hedge against inflation,” said Fawad Razaqzada, analyst at FOREX.com.
Bitcoin has also been boosted by moves by US authorities and now regulators in Britain to allow exchange-traded funds for bitcoin, which opens up the cryptocurrency to news classes of investors.
“The launch of BTC Spot ETFs has transformed the market structure, providing institutions with convenient, secure, and regulated entry points into the digital assets market,” said Matteo Greco, analyst at Fineqia International. “Major financial institutions are now actively involved in holding and trading BTC.”
Meanwhile, all the main US equity indexes were lower in midday trading, while European stocks finished mostly lower.
Equities on both sides of the Atlantic have risen sharply since the start of the year, but the rally stalled last week as investors looked for further clues about when interest rates may be cut, and as they digest the recent sharp run-ups in a handful of tech stocks.
“As we start the week, it seems like a reality check is beginning to take hold,” said Stephen Innes, managing partner at SPI Asset Management.
Last week’s report on US nonfarm payrolls failed to settle the debate on when the Fed will feel comfortable enough with the inflation outlook to start easing interest rates.
The next major US statistics release will be consumer prices on Tuesday, followed by retail sales on Thursday.
“Friday’s Non-Farm Payroll release was ‘Goldilocks’ when revisions were taken into account –- not too hot, not too cold,” said David Morrison, senior market analyst at FCA.
“Much depends on any change in sentiment we may see after we get the latest US inflation updates tomorrow and Thursday.”
Traders are now factoring in three US rate cuts this year, compared with six that were pencilled in three months ago.
On the corporate front, shares in Telecom Italia slumped nearly 10 percent following heavy losses last week on a badly-received strategy update centred on reducing debt. They ended the day down 4.6 percent while the overall Milan market was down 0.3 percent
In Asia, Japanese equities were weighed down by a tech sell-off after losses Friday for the sector in New York, while exporters took a hit from a stronger yen as the Bank of Japan considers tightening monetary policy, in contrast to rivals gearing up for rate cuts.
There was little reaction to news that the Japanese economy narrowly avoided a recession in the final months of last year.
Hong Kong and Shanghai rose, however, following figures showing a bigger-than-forecast jump in Chinese consumer prices last month.
– Key figures around 1630 GMT –
New York – Dow: DOWN 0.1 percent at 38,676.17 points
New York – S&P 500: DOWN 0.2 percent at 5,112.66
New York – Nasdaq Composite: DOWN 0.2 percent at 16,047.82
London – FTSE 100: UP 0.1 percent at 7,669.23 (close)
Paris – CAC 40: DOWN 0.1 percent at 8,019.73 (close)
Frankfurt – DAX: DOWN 0.4 percent at 17,746.27 (close)
EURO STOXX 50: DOWN 0.6 percent at 4,930.42 (close)
Tokyo – Nikkei 225: DOWN 2.2 percent at 38,820.49 (close)
Hong Kong – Hang Seng Index: UP 1.4 percent at 16,587.57 (close)
Shanghai – Composite: UP 0.7 percent at 3,068.46 (close)
Euro/dollar: DOWN at $1.0929 from $1.0942 on Friday
Dollar/yen: DOWN at 146.82 yen from 147.06 yen
Pound/dollar: DOWN at $1.2812 from $1.2854
Euro/pound: UP at 85.30 pence from 85.09 pence
West Texas Intermediate: UP 0.4 percent at $78.31 per barrel
Brent North Sea Crude: UP 0.6 percent at $82.56 per barrel
