European and US equities struggled Friday as investors awaited further stimulus and vaccine news, but Bitcoin forged a new record as it crept toward $50,000.
Bitcoin soared to a new high of $48,930 in Asian trade, after MasterCard and US bank BNY Mellon moved Thursday to make it easier for people to use the cryptocurrency. It later slid back under $48,000.
In European equity trading, London and Paris each added 0.2 percent, while Frankfurt was 0.4 percent lower in afternoon trading.
“Recent gains brought about from US stimulus and vaccination optimism has faded to bring a more ‘wait-and-see’ approach from markets,” said Joshua Mahony, senior analyst at online trading firm IG.
London sentiment was dented somewhat by news that the coronavirus-ravaged UK economy shrank by a record 9.9 percent in 2020, despite an upturn in the second half.
FASTFACT
$48,930 Bitcoin soared to a new high of $48,930 in Asian trade, after MasterCard and US bank BNY Mellon moved Thursday to make it easier for people to use the cryptocurrency. It later slid back under $48,000.
Meanwhile on Wall Street, the blue-chip Dow fell 0.1 percent at the start of trading. Both the broader S&P 500 and tech-heavy Nasdaq Composite dropped from record closes.
“Nothing awful is happening out here just that the current narrative — strong earnings, vaccine rollout, and stimulus hopes are getting a touch stale,” said analyst Stephen Innes at Axi.
Equities have rallied this year on the back of vaccine rollouts, falling infection and death rates, and optimism Biden will push through his $1.9 trillion stimulus.
Innes noted that the earnings season has gone well in the US and Europe, while the number of COVID-19 infections has been dropping faster than in previous waves.
He said it was unclear why the rally in equity markets has paused, but suggested that perhaps “investors need some good old proof in the economic pudding before taking that next leap of faith.”
