Asian shares showed mixed results on Monday, pressured by a decline in Hong Kong stocks. In contrast, bitcoin reached a three-month high as “Trump trades” gained momentum. Gold also hit a record high, driven by global uncertainty regarding the Middle East conflict and a closely contested U.S. presidential election.
Investor optimism over recent stimulus measures from Beijing, announced in late September, has turned cautious as they await further details on fiscal support. While China cut its benchmark lending rates on Monday, this move was widely expected.
China’s blue-chip index oscillated between losses and gains in early trading but rose by the afternoon, supported by technology companies. The index increased by 0.4%, while the Shanghai Composite Index climbed 0.31%. The Beijing Stock Exchange 50 Index surged 14% to a record high after the exchange announced plans to assist small- and medium-sized tech companies with training and financing.
However, this did not positively affect Hong Kong markets, which saw stocks drop by more than 1%. As a result, MSCI’s broadest index of Asia-Pacific shares outside Japan fell by 0.26%, reflecting a shift in sentiment after U.S. stocks recorded their sixth consecutive week of gains on Friday. Japan’s Nikkei rose slightly by 0.12%.
Investors might have to wait until late October or early November for concrete details on Chinese stimulus plans, according to Chaoping Zhu, a global market strategist at J.P. Morgan Asset Management in Shanghai.
European stock futures indicated a mixed opening, with EUROSTOXX 50 futures down 0.1% and FTSE futures up 0.17%. Nasdaq futures eased by 0.08%, while S&P 500 futures remained flat.
With two weeks until the Nov. 5 U.S. election, market bets on a Donald Trump victory are increasing. His policies on tariffs, taxes, and immigration are seen as inflationary, potentially negatively impacting bonds but positively affecting the dollar. Additionally, he is viewed as more favorable toward cryptocurrencies.
Tony Sycamore, a market analyst at IG, noted, “With Trump leading in key battleground states, markets began factoring this in last week, resulting in stronger equities, higher yields, and a robust dollar, along with bitcoin’s nearly 10% gain over the past week.”
Bitcoin rose by 0.5% to $69,080.72, having reached a session high of $69,487. The cryptocurrency gained 9.6% last week and is up over 8% this month. Sycamore expressed optimism, stating, “Things look good for bitcoin right now. I think it can continue higher.”
The dollar remained near a two-month high against a basket of currencies, with the dollar index at 103.49. Sterling fell 0.05% to $1.3041, and the euro decreased by 0.06% to $1.0861.
In the bond market, the benchmark 10-year U.S. Treasury yield was at 4.0809%, while the two-year yield remained stable at 3.9531%.
Spot gold reached a record of $2,732.73 an ounce, extending its rally after gaining more than 2% last week. Arun Sai, a senior multi-asset strategist at Pictet Asset Management, remarked, “Gold has been one of the clearest Trump trades, given his aggressive stance on trade and his willingness to weaponize the dollar, which keeps demand for diversification strong among emerging central banks.”
Oil prices also rose on Monday, recovering from last week’s steep decline. Brent crude futures were up 0.6% at $73.49 per barrel, while U.S. crude increased by 0.7% to $69.70 per barrel.
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