Asia shares fluctuated on Monday, with pressure from weakness in Chinese stocks, while bitcoin reached a three-month peak as Trump trades continued to gain momentum.
Gold reached another record high due to conflict in the Middle East and the closely contested U.S. presidential election, with the yellow metal expected to remain popular amid global uncertainty.
Investor optimism over Beijing’s stimulus measures announced in September has turned into caution as they await further details on fiscal support from policymakers.
Although China lowered its benchmark lending rates on Monday, the move was anticipated.
Equities in Hong Kong were down 0.6%, while China’s blue-chip index fluctuated between losses and gains. The Shanghai Composite Index gained 0.36%.
This limited gains in MSCI’s broadest index of Asia-Pacific shares outside Japan, which was slightly up, following six consecutive weeks of gains in U.S. stocks.
Japan’s Nikkei rose 0.34%.
More information on Chinese stimulus measures may take some time to emerge.
According to Chaoping Zhu, global market strategist at J.P. Morgan Asset Management in Shanghai, concrete plans may not be revealed until late October or early November.
With just two weeks left until the Nov. 5 U.S. election, there is a growing belief in financial markets that a Donald Trump victory is possible.
Trump’s policies are viewed as inflationary, potentially negative for bonds and positive for the dollar. He is also perceived as having a favorable stance towards cryptocurrencies.
Bitcoin reached $69,100, up 9.6% last week and over 8% for the month so far.
Market analyst Tony Sycamore from IG stated, “Things look pretty good for bitcoin right here. I think it can continue higher.”
The dollar remained near a high of over two months against a basket of currencies, with the dollar index at 103.46.
In the bond market, the benchmark 10-year U.S. Treasury yield rose slightly, while spot gold reached a record high of $2,727.39 an ounce.
Oil prices increased slightly on Monday, with Brent crude futures at $73.36 a barrel and U.S. crude at $69.52 per barrel.
According to Arun Sai, senior multi-asset strategist at Pictet Asset Management, “One of the clearest Trump trades so far has been gold, given his belligerent stance on trade and willingness to weaponize the dollar, keeping demand for diversification well supported among emerging central banks.”
(Reporting by Rae Wee; Editing by Edwina Gibbs)