The MSCI APAC index saw its largest drop in a month, reflecting fading momentum in Chinese stocks.
Analysts expect investors to shift focus back to cryptocurrencies amid declining equity performance in China.
Near-term risks from earnings and CPI releases could challenge the current stock market valuations.
The rally in Chinese stocks has ended after a week-long holiday. This decline follows a government briefing that did not announce any new economic stimulus measures. As a result, the MSCI APAC equity index had its largest decline in a month.
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US equities also fell overnight, driven by mega-cap tech stocks and rising geopolitical tensions. The VIX index rose to 22 points, showing increased market volatility. Interestingly, cryptocurrency volatility remained stable during this period, with front-end implied volatilities trading at 43%. This figure is a 3-vol discount compared to the seven-day historical realized volatility.
Chinese Investors Shift Strategy
Bloomberg reported that Chinese investors may have sold Tether (USDT) to fund stock purchases since the end of September. Meanwhile, Bitcoin (BTC) has stay…
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