While cryptocurrencies were bruised by China’s fresh ban on their transactions, they were not alone in facing pressure. — Reuters picTOKYO, May 19 — Asian stocks dipped and cryptocurrencies extended losses today as uncertainties over inflation prompted investors to reduce exposure to riskier assets for now.
The S&P 500 lost 0.85 per cent, with telecom shares leading the decline, while the Nasdaq Composite dropped 0.56 per cent. The Federal Reserve has stuck to the narrative that a recent rise in inflation would be transient and that it therefore should keep its easy monetary policy settings. Yet an unexpected pickup in consumer inflation and signs of a labour shortage in the United States have prompted investors to dump assets that had risen sharply over the past year.Bitcoin dropped as much as 5.3 per cent to hit its lowest level since early February and last stood at US$40,973, having lost more than a third of its value from a peak of US$64,895 hit just over a month ago.
Some commodities that have benefited from reflation trade have also lost steam, with US lumber futures losing almost 25 per cent in the last three sessions.