Stock markets go nowhere as bitcoin smashes record

A Bitcoin logo is displayed at the Bitcoin Center New York City in New York’s financial district in New York on July 28, 2015. (REUTERS/Brendan McDermid/File Photo)
Updated 07 December 2017

Stock markets go nowhere as bitcoin smashes record

LONDON: The world’s stock markets struggled for direction Thursday as investors paused for breath, while bitcoin spiked to a dizzying record above $15,000 on frenzied speculative buying, dealers said.
Paris stocks crept 0.2 higher and Frankfurt gained 0.4 percent, but London turned 0.4 percent lower.
Wall Street rose modestly, with the Dow adding 0.3 percent and the tech-heavy Nasdaq Composite climbing 0.7 percent. Analysts said investor sentiment was still hamstrung by coming political battles surrounding a US tax reform plan.
Much focus, meanwhile, was on bitcoin which set a fresh record as investors’ jaws dropped at the cryptocurrency’s meteoric rise.
Bitcoin, which is not traded on traditional currency market, powered to a fresh high of $15,969.99, before falling back according to Bloomberg data.
The controversial virtual unit has soared more than 50 percent in just one week, but analysts warn that the snowballing rally could melt in the run-up to Christmas.
“While the European stocks indices try and shake off yesterday’s politically-driven bearish trading, bitcoin — seemingly unencumbered by anything in the real world — has continued its astonishing march,” Spreadex trader Connor Campbell told AFP.
“The rolling wave of speculation has given bitcoin a huge amount of momentum, a snowball effect that may be melted when the cryptocurrency’s futures are launched in a few weeks.”
“Bitcoin is continuing to travel at break-neck speed,” CMC Markets analyst David Madden told AFP.
“The alternative investment is proving to be very popular at a time when traditional assets like gold are under pressure,” he added, noting the precious metal had touched a four-month low.
Bitcoin received a major boost in October when exchange giant CME Group announced it would launch a futures marketplace for bitcoin, which has not been listed on a major bourse before.
“Bitcoin... has registered yet another milestone in its never-ending rally,” added IG analyst Chris Beauchamp.
“There seems no end to the supply of willing buyers, with the endless progression of higher prices simply fueling the mania.”
Tokyo stocks rallied on Thursday after three days of losses, but regional Asian markets were dogged by political concerns, the latest being US President Donald Trump’s controversial decision to recognize Jerusalem as Israel’s capital.
After a blockbuster year for most global markets — helped by bets on Trump’s promise to cut taxes and ramp up spending — geopolitical worries and dealers winding down for the year’s end have put them on course for a painful December.
Trump’s Jerusalem decision drew swift global condemnation and fanned fears about the overall prospects for stability in the Middle East.
That followed news this week that one of the president’s former close advisers had admitted lying to investigators in a probe into Russian meddling in the US election, bringing it closer to the White House.
Elsewhere, Britain’s struggles to hammer out a deal with the EU on the Irish border question have left Brexit talks in limbo, meaning the second phase of the negotiations — on trade — cannot yet go ahead.
_ _ _

London — FTSE 100: DOWN 0.4 percent at 7,320.75 points (close)
Frankfurt — DAX 30: UP 0.4 percent at 13,045.15, (close)
Paris — CAC 40: UP 0.2 at 5,383.86 (close)
EURO STOXX 50: UP 0.2 percent at 3,567.50
New York — DOW: UP 0.3 percent at 24,201.53
Tokyo — Nikkei 225: UP 1.5 percent at 22,498.03 (close)
Hong Kong — Hang Seng: UP 0.3 percent at 28,303.19 (close)
Shanghai — Composite: DOWN 0.7 percent at 3,272.05 (close)
Euro/dollar: UP at $1.1799 from $1.1795 at 2200 GMT
Pound/dollar: UP at $1.3421 from $1.3393
Dollar/yen: UP at 112.65 yen from 112.27 yen
Oil — Brent North Sea: UP 75 cents at $61.97 per barrel
Oil — West Texas Intermediate: UP 41 cents at $56.37

Gulf economies to take coronavirus exports hit says S&P

Updated 17 February 2020

Gulf economies to take coronavirus exports hit says S&P

  • S&P expects oil prices to remain at $60 per barrel in 2020 and decline to $55 from 2021
  • The ratings agency expects the impact on the banking sector to be low, with little direct exposure to Chinese companies

LONDON: Gulf states already hurt by a weak oil price could reap further economic pain from the impact of the coronavirus on their exports, S&P Global Ratings warned on Monday.

The ratings agency believes there is a risk that the economic impact of the virus could increase unpredictably with implications for overall economic growth, the oil price and the creditworthiness of some companies. Still, its base case scenario anticipates a limited impact for now.

“Given the importance of the Chinese economy to global economic activity, S&P Global Ratings expects recent developments could weigh on growth prospects in the GCC, already affected by low oil prices and geopolitical uncertainty,” it said in a report.

Although the rate of spread and timing of the peak of the new coronavirus is still uncertain, S&P said that modeling by epidemiologists indicated a likely range for the peak of between late-February and June.

Notwithstanding the spread of the virus, S&P expects oil prices to remain at $60 per barrel in 2020 and decline to $55 from 2021.

It sees the biggest potential impact on regional economies to be felt in terms of export volumes. S&P estimates that GCC countries send between 4 percent and 45 percent of their exported goods to China, with Oman being the most exposed (45.1 percent) and the UAE the least exposed (4.2 percent).

Beyond the trade of goods, the Gulf’s hospitality sector could also feel the effect of reduced tourist arrivals with hotels and shopping malls likely to suffer. The impact could be further amplified because of the high-spending nature of Chinese tourists.

On-location spending by Chinese tourists is the fourth largest in the world at $3,064 per person, according to Nielsen data. About 1.4 million Chinese tourists visited the GCC in 2018 with expectations of that figure rising to 2.2 million in 2023, and with the UAE as the main destination.

Chinese passengers also accounted for 3.9 percent of passengers passing through Dubai International Airport in 2018.

S&P said that if the effect of the new coronavirus is felt beyond March, the number of visitors to Expo 2020 in Dubai could be lower than expected.

The ratings agency expects the impact on the banking sector to be low, with little direct exposure to Chinese companies.