LONDON: Bitcoin struck a fresh record high on Monday, but stock markets fell as traders awaited more signals on the outlook for US interest rates.

Bitcoin peaked at $72,385 on Monday before paring gains slightly.

Gold was at $2,185.00 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 and European equity indexes were slightly lower soon after the New York opening.

Equities on both sides of the Atlantic have also 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. The overall Milan market was down 0.4 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.

Oil mixed

Oil prices were little changed on Monday as concern eased that fighting in the Middle East would disrupt supply and Chinese data suggested weak demand, while an increase in US refining limited any selling.

Brent futures gained 16 cents at $82.24 a barrel by 1:05 p.m. EST (17:05 GMT), and US crude lost 10 cents to $77.91 per barrel.

Published in Dawn, March 12th, 2024