The Japan Times - Stocks weighed down by Crypto 'meltdown', tariff uncertainty

Concerns about the global economy fuelled by fears of a global trade war, coupled with disappointing results this week from AI chip darling Nvidia, have led investors to exit investments seen as risky.

One of the most volatile assets currently is bitcoin, which briefly dived below $80,000 on Friday for the first time since November.

Its low of $78,225.84 was more than 25 percent off the levels above $109,000 touched last month as Trump entered office, and was down 20 percent in the past week alone.

"The crypto sector is suffering a bit of a meltdown today," said Trade Nation analyst David Morrison.

He noted that another popular cryptocurrency, ethereum, has lost nearly half of value since mid-December.

"According to some analysts, that represents not just a correction, but a full-blown bear market," he added, noting bitcoin has lost most of the gains it made since Trump was elected in November.

Morrison said the gains were driven by hopes of a much friendlier regulatory environment, which have now unravelled to some extent.

City Index and FOREX analyst Fawad Razaqzada said that the broad tech-sector weakness and tariff threats were also putting downward pressure but that $80,000 was a key resistance level.

"A decisive break below $80K would bring into focus the long-term support area" of around $70,000 he said.

After a relatively upbeat month on equity markets, Trump dealt a fresh blow this week by confirming that 25 percent tariffs on products from Mexico and Canada would be effective from March 4.

He also announced another 10 percent hike on Chinese goods would go into effect next week, and warned the European Union that it could be hit with 25 percent duties.

"The countdown to Trump's tariffs coming into force is now in the final few days and investors have got the jitters," said Russ Mould, investment director at AJ Bell.

Hong Kong and mainland Chinese stock markets fell sharply Friday, with China hitting back saying further US tariffs would "seriously impact dialogue" between the two countries on narcotics control, Trump's stated reason to hike tariffs.

"Tariffs are back in the crosshairs, and a market that had reduced its sensitivity to recent tariff headlines has had to reconsider that reaction function," said Chris Weston, head of research at the broker Pepperstone.

Eurozone stocks fell for a second day, while London edged out a gain after Trump held out the prospect of a "great" trade deal with Britain after meeting with Prime Minister Keir Starmer at the White House on Thursday.

Wall Street opened mixed on Friday after the US Federal Reserve's preferred inflation measure cooled slightly, dipping to 2.5 percent in the 12 months to January.

eToro US investment analyst Bret Kenwell said the reading "takes some of the recent inflation worries off the table" and "may help spark a relief rally in stocks".

Stocks have struggled in recent weeks with many analysts warning that Trump's plans to slash taxes, regulations and immigration will reignite inflation.

A number of weak economic readings have also stoked concerns that the US economy is slowing down.

Tech stocks have also struggled, with shares in Nvidia continuing to be hit by profit-taking despite posting solid results on Wednesday.

- Key figures around 1430 GMT -

New York - Dow: UP 0.2 percent at 43,317.78 points

New York - S&P 500: UP FLAT at 5,863.16

New York - Nasdaq Composite: DOWN 0.3 percent at 18,483.15

London - FTSE 100: UP 0.4 percent at 8,790.58

Paris - CAC 40: DOWN 0.3 percent at 8,076.14

Frankfurt - DAX: DOWN 0.5 percent at 22,445.90

Tokyo - Nikkei 225: DOWN 2.9 percent at 37,155.50 (close)

Hong Kong - Hang Seng Index: DOWN 3.3 percent at 22,941.32 (close)

Shanghai - Composite: DOWN 1.9 percent at 3,370.52 (close)

Euro/dollar: UP at $1.0411 from $1.0398 on Thursday

Pound/dollar: UP at $1.2604 from $1.2600

Dollar/yen: UP at 150.50 from 149.79 yen

Euro/pound: UP at 82.61 pence from 82.52 pence

West Texas Intermediate: DOWN 1.1 percent at $69.57 per barrel

Brent North Sea Crude: DOWN 1.1 percent at $72.77 per barrel

burs-rl/gv

K.Inoue--JT