Category: Reuters

Weak US data raises uncertainty for Asian stocks

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian stocks dithered on Tuesday as investors grappled with inflation concerns in the wake of the surprise cuts to the OPEC+ group’s oil output targets, while treasury yields retreated after frail U.S. manufacturing sector data.

An announcement on Sunday of output target cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, propelled oil prices higher and complicated the inflation outlook. Brent crude was up 0.5% to $85.39 per barrel, after jumping over 6% overnight.

Investors were also assessing Monday’s economic data, which showed U.S. manufacturing activity in March slumped to its lowest level in nearly three years as new orders plunged, and analysts said activity could decline further due to tighter credit conditions.

“A weakening trend has been in place since May last year, but recent banking turmoil may have dented confidence further,” ANZ analysts said in a note.

“Manufacturing is one of the most rate-sensitive sectors of the economy as goods like autos are primarily bought on credit. There continues to be encouraging news on goods inflation.”

Early in the Asian day, MSCI’s broadest index of Asia-Pacific shares outside Japan was trading steady.

Japan’s Nikkei stock index rose 0.24% while Australian shares were up 0.1%.

China’s blue-chip CSI300 index edged down 0.16% in early trade, while Hong Kong’s Hang Seng index opened 0.64% lower.

On Monday, gains in energy shares helped lift world stock indexes following the surprise OPEC+ group’s new production cuts that could push oil prices toward $100 a barrel.

The S&P 500 energy sector index surged 4.9% with Chevron Corp, Exxon Mobil Corp and Occidental Petroleum Corp all rallying more than 4%.

However, the prospect of higher oil costs added to inflation worries on Wall Street just days after evidence of cooling prices raised expectations that the U.S. Federal Reserve might soon end its aggressive monetary tightening campaign.

The Dow Jones Industrial Average rose 0.98%, the S&P 500 gained 0.37% and the Nasdaq Composite dropped 0.27%.

Shares of Tesla Inc dropped 6.1% after disclosing March-quarter deliveries rose just 4% from the previous quarter, even after CEO Elon Musk slashed car prices in January to boost demand.

Market watchers have been trying to gauge how much longer the Fed may need to keep raising interest rates to cool inflation and whether the U.S. economy may be headed for recession.

Treasury yields retreated after the U.S. manufacturing data, which increased expectations for some investors the Fed will cut rates later this year as the economy slows. Separate data also showed U.S. construction spending weakened in February.

The yield on benchmark 10-year Treasury notes was last at 3.4263% compared with its U.S. close of 3.432% on Monday.

The two-year yield, which rises with traders’ expectations of higher Fed fund rates, touched 3.9841% compared with a U.S. close of 3.98%.

The dollar reversed some losses but remained on the defensive after losing ground on Monday in the wake of the weak U.S. economic data.

The U.S. dollar index which tracks the greenback against a basket of currencies of other major trading partners, was last up at 102.11. The euro was a touch higher at $1.0904, while against the Japanese yen, the dollar was off 0.09% at 132.35.

Gold was slightly lower. Spot gold was traded at $1982.19 per ounce. [GOL/]

(Editing by Shri Navaratnam)

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Gold prices ease as traders gauge OPEC+ output cuts, weak US data

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gold prices edged lower on Tuesday as traders assessed the likely path of the Federal Reserve’s monetary policy after data showed a slump in U.S. manufacturing activity and as OPEC+’s production cut sparked inflationary risks, reports Reuters.

Spot gold was down 0.2% at $1,980.39 per ounce, as of 0314 GMT. U.S. gold futures dipped 0.1% to $1,997.70. The dollar index was slightly higher, making bullion expensive for overseas buyers. [USD/]

Gold in the near term could see “consolidative price action in absence of a fresh catalyst and as markets monitor the extent of price gains in oil as that may throw a curve ball on inflation outlook and complicate monetary policy decision,” said OCBC FX strategist Christopher Wong.

Oil prices steadied with investors’ attention shifting to demand trends and the impact of higher prices on the global economy.

Gold prices dropped on Monday after a surprise cut in OPEC+ crude production was announced over the weekend. But prices reversed course to rally by 1% as the dollar stumbled following the release of weak U.S. economic data.

U.S. manufacturing activity slumped in March to the lowest level in nearly three years as new orders plunged. Analysts said activity could decline further due to tighter credit conditions.

Bullion is seen as a hedge against inflation, but higher rates increase the opportunity cost of holding the non-yielding asset.

Markets see a 60.1% chance of the U.S. Fed hiking rates by a quarter point in May. But the likelihood of a rate cut later this year also rose.

“Over the short-term (Q2), we expect gold to be further supported by a scenario where both inflation and interest rates could peak,” Edward Meir, a metals analyst at Marex, wrote in a note.

“If we are right, this should send the dollar lower and clear the ‘runway’ for an additional move higher.”

Spot silver slipped 0.5% to $23.88 per ounce, platinum eased 0.1% to $984.99 and palladium ticked 0.1% lower to $1,458.42.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India extends export curbs on gasoline, diesel

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India has extended restrictions on the export of diesel and gasoline, the government said in a notification, as New Delhi tries to ensure the availability of refined fuels for the domestic market.

The government had imposed the curbs on gasoline and gasoil exports through the end of the financial year on Friday. The latest notification, issued late on Saturday, did not specify how long the curbs would remain in the place. It asked refiners to commit to selling 50% of their annual volume of gasoline exports and 30% of their diesel exports in the domestic market.

The extension may discourage some Indian refiners, mainly non-state companies, from buying Russian fuel for re-export to other countries, including to European importers that have stopped purchases of refined products from Russia due to its invasion of Ukraine.

New Delhi last year imposed the rare restrictions after non-state refiners Reliance Industries and Nayara Energy, key Indian buyers of discounted Russian supplies, began reaping substantial profits by aggressively boosting fuel exports instead of increasing domestic sales.

That forced state refiners to fill the void and meet demand at home by selling fuel at lower, government-capped prices.

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EU adopts fifth round of sanctions against Russia, including coal import ban

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The European Union on Friday formally adopted its fifth package of sanctions against Russia, including bans on the import of coal, wood, chemicals and other products.

The measures also prevent many Russian vessels and trucks from accessing the EU, further crippling trade, and will ban all transactions with four Russian banks, including VTB.

The ban on coal imports will be fully effective from the second week of August. No new contracts can be signed from Friday, when sanctions are to be published in the EU’s official journal.

According to the sanctions, existing contracts will have to be terminated by the second week of August. This means that Russia can continue to receive payments from the EU on coal exports until then.

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“These latest sanctions were adopted following the atrocities committed by Russian armed forces in Bucha and other places under Russian occupation,” EU’s top diplomat, Josep Borrell, said in a statement.

The Kremlin has said that Western allegations that Russian forces committed war crimes by executing civilians in the Ukrainian town of Bucha were a “monstrous forgery” aimed at denigrating the Russian army.

In addition to coal, the new EU sanctions ban imports from Russia of many other commodities and products, including wood, cement, fertilisers, seafood and liquor, for a total value estimated in 5.5 billion euros ($5.9 billion) a year.

The EU also restricted export to Russia, of a number of products, including jet fuel, quantum computers, advanced semiconductors, high-end electronics, software, sensitive machinery and transportation equipment, for a total value of 10 billion euros a year.

Also read: Gold price subdued, caught between US rate hike expectations and Ukraine economic crisis

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China relies on traditional medicine to fight COVID surge in Shanghai

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shanghai is distributing to residents millions of boxes of traditional Chinese medicine (TCM), such as herbal products and flu capsules, which it says can treat COVID-19 in the battle to control its largest virus outbreak.

China’s commercial capital, now under an extended lockdown, reported more than 17,000 new COVID-19 infections on April 5, including 311 symptomatic cases, among a population of more than 26 million.

”Facing the extremely transmissible Omicron variant, we should use TCM treatment as soon as possible,” said Fang Min, president of the city’s Shuguang Hospital.

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”For general public, including high-risk groups, taking TCM treatment when the epidemic is severe has good preventive effect,” he told a news briefing on Tuesday, adding that such treatments for more than 21 million people had been handed out.

Several residents told Reuters they had received free boxes of over-the-counter flu medicine Lianhua Qingwen from neighbourhood committees in recent weeks. Others who caught COVID said they got TCM medication to be dissolved in hot water.

About 98 percent of Shanghai’s COVID-19 patients are taking TCM treatment, and teams of TCM workers have fanned out to designated hospitals and quarantine sites since the latest outbreak began in March, Fang said.

China’s health authority has recommended several TCM drugs and ingredients, such as Lianhua Qingwen, for use by COVID-19 patients, although a lack of reliable clinical data limits their use outside the country.

Singapore, which has a large ethnic Chinese population, said in November there was no scientific evidence from randomised clinical trials that any herbal product, including Lianhua Qingwen, could be used to prevent or treat COVID-19.

It advised the use of all herbal products formulated for common cold and flu only to manage symptoms such as headaches, runny or blocked noses, sore throats and coughs.

In 2020, the U.S. regulator the Food and Drugs Administration, warned vendors of Lianhua Qingwen to stop selling it as a COVID-19 treatment.

Officials in Shanghai’s district of Hongkou have distributed 722,000 boxes of Lianhua Qingwen capsules, and aim to give all residents preventive TCM medicines such as herbs and tea bags, said the Shanghai Daily, which is owned by the local government.

Shijiazhuang Yiling Pharmaceutical, the maker of Lianhua Qingwen, has said a 2020 clinical trial showed that it could, along with conventional therapy, relieve COVID-19 symptoms such as fever and cough.

China approved several treatments including Pfizer Inc’s Paxlovid and Brii Biosciences Ltd’s antibody-based medicine to treat COVID patients, but it is not clear how widely they are used.

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Analysis: Bogged down in Ukraine, Russia moves war goalposts

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Russia has reframed its war goals in Ukraine in a way that may make it easier for President Vladimir Putin to claim a face-saving victory despite a woeful campaign in which his army has suffered humiliating setbacks, military analysts say.

Russia attacked its neighbour by land, air and sea on February 24 and pushed as far as the capital Kyiv – where its forces have been stalled for weeks – in what Ukraine and the West said was a bid to topple the democratic government of President Volodymyr Zelenskyy.

On Friday, however, a senior military official said the real objective was to “liberate” the Donbass region of eastern Ukraine, where Russian-backed separatists have been fighting the Ukrainian army for the past eight years.

“The main objectives of the first stage of the operation have generally been accomplished,” said Sergei Rudskoi, head of the Russian General Staff’s Main Operational Directorate.

“The combat potential of the Armed Forces of Ukraine has been considerably reduced, which … makes it possible to focus our core efforts on achieving the main goal, the liberation of Donbass.”

Donbass, where Putin has accused Ukraine without evidence of waging “genocide” against ethnic Russians, has long occupied a prominent place in Moscow’s litany of grievances against Ukraine.

But if capturing the whole of Donbass had been the objective from the start, Moscow could have mounted a much more limited offensive and spared itself the effort and losses involved in invading Ukraine from the north, east and south.

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“Obviously, they have completely failed in everything they’ve set out to do and so now they are redefining what the purpose is so they can declare victory,” said Ben Hodges, a former commander of US army forces in Europe who now works for the Centre for European Policy Analysis.

“Clearly, they do not have the ability to continue sustained large-scale offensive operations… Their logistics problems have been apparent to everybody, they’ve got serious manpower issues and the resistance has been way beyond anything they could have possibly imagined.”

High costs

The costs of Russia’s “special military operation” have been steep. Rudskoi, the General Staff official, on Friday acknowledged 1,351 deaths among Russian soldiers. Ukraine claims the real figure is more than 10 times as high.

Oryx, a Dutch military blog that records both sides’ equipment losses based on verifiable photos and video, says Russia has lost 1,864 pieces of hardware including 295 tanks, 16 planes, 35 helicopters, three ships and two fuel trains. It has verified Ukrainian losses of 540 items, including 77 tanks.

Each side makes regular claims of the amount of enemy equipment it is destroying, but neither confirms its own losses.

Thwarted in its offensive, Russia has resorted to pounding cities to rubble with rockets and artillery.

“The advance is stalled or at best very slow at this stage,” said Nick Reynolds, a land warfare analyst at the RUSI think-tank in London.

“Its original strategy is now completely unachievable. Its original strategy was to decapitate the Ukrainian government or cause it to collapse by just moving the military into the country… Obviously that didn’t happen; quite the opposite.”

Russia has more work ahead to achieve even the more modest goal of driving Ukraine’s forces out of the east. Of the two regions that make up the Donbass, its defence ministry says Russian-backed forces control 93 percent of Luhansk but only 54 percent of Donetsk.

Meanwhile Ukraine is sounding increasingly confident.

Deputy Chief of Staff of Ground Forces Oleksandr Gruzevich said on Friday that Russia would need three to five times more forces to take Kyiv, and was being blocked in its efforts to establish a land corridor across the south coast to link up annexed Crimea with Donbass.

Hodges, the retired US general, said the question now was whether the West would be bold enough to overcome its fears of a Russian escalation using chemical or nuclear weapons – which he said would offer no tactical advantage to Moscow – and step up support to Ukraine even further.

He said more equipment such as long-range rockets, artillery and drones, coupled with provision of Western intelligence, could enable Kyiv to move from defence to attack.

“We’re only parcelling out support to Ukraine instead of flooding them,” he said. “It feels like we want to keep them from being defeated but we’re not willing to let them win.”

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Chelsea owner Roman Abramovich’s second yacht also docks in Turkey

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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A second superyacht belonging to Chelsea football club owner and sanctioned Russian oligarch Roman Abramovich has docked in a resort in southwestern Turkey a country which is not applying sanctions on Russia over its invasion of Ukraine, Turkish media reports said Tuesday.

The private DHA news agency said the Bermuda-registered Eclipse docked at a port in the resort of Marmaris, amid international efforts to freeze assets belonging to top Russian businessmen linked to Russian President Vladimir Putin.

A day earlier, Abramovich’s Bermuda-flagged luxury yacht My Solaris arrived in the nearby resort of Bodrum, triggering a protest by a group of Ukrainians who boarded a small motorboat and tried to prevent the yacht from docking.

Last week, the European Union updated a list of individuals facing asset freezes and travel bans over their ties to the Kremlin and began imposing sanctions on Abramovich. The 55-year-old had already been punished in Britain.

NATO-member Turkey has close ties to both Russia and Ukraine. It has criticized Moscow’s invasion of Ukraine but has also positioned itself as a neutral party trying to mediate between the two.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Former Ukraine striker Andriy Shevchenko steps up relief efforts for his country’s war victims

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Former Ukraine striker Andriy Shevchenko said he will use his platform to tell the world the truth about Russia’s invasion of his country and step up efforts to raise humanitarian aid for victims of the crisis.

One of Ukraine’s greatest players and a former coach of the national team, Shevchenko said he was in shock for the first two days of the invasion, which Moscow describes as a “special military operation.”

“But I soon got to thinking about how best I could help my country. I decided the best way was to use my platform, speak up, tell people the truth about what’s going on and raise humanitarian aid,” Shevchenko told the Times newspaper.

Shevchenko told the Times that he plans to welcome two Ukrainian refugee families into his home in Surrey.

“I have the ability and capacity to have people in my home, so why would I not do that? These are people who have nothing, and the world has to help — right now,” the 45-year-old said.

“The response from all around the globe has been fantastic, but the situation is getting worse. More people are dying, so we all need to do more, and we need to do it now.”

Thousands of people have been killed in the fighting while the U.N. refugee agency says some 10 million people have been displaced by the war.

Shevchenko has launched a campaign called “Play Your Part for Ukraine https://www.justgiving.com/campaign/play-your-part” which hopes to raise an initial two million pounds ($2.64 million) to help those affected. Donations stood at nearly 294,000 pounds on Tuesday.

Shevchenko also hailed the leadership of Ukrainian President Volodymyr Zelenskyy.

“The reaction of the president has been amazing. He has united the nation,” Shevchenko said. “He is an inspiring message of solidarity, and the world reaction has given our people hope.”

Also Read: Russia-Ukraine war – Key things to know about the conflict

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China team pull out of Swiss Open due to COVID, injuries

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Chinese team withdrew from the Swiss Open Super 300 event in Basel on Tuesday due to a number of COVID-19 cases and injuries, global governing body Badminton World Federation (BWF) said.

The BWF added that there were several COVID-related pullouts at the $180,000 World Tour event.

“The Chinese Badminton Association reported a few positive cases as well as some injuries to players in their team,” the BWF said in a statement.

“Citing concerns to the welfare and safety of all participants at the tournament, Team China have subsequently withdrawn all their players from the YONEX Swiss Open 2022.”

China are a traditional badminton powerhouse, winning 10 Thomas Cups (men’s team competition), 15 Uber Cups (women’s team competition) and 12 Sudirman Cups (mixed team competition).

They are the most successful country in badminton at the Olympics with 20 gold medals.

The Swiss Open starts later on Tuesday.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Naomi Osaka takes equity stake in crypto exchange FTX

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Tennis star Naomi Osaka has taken an equity stake in FTX and will be receiving compensation in crypto, the Bahamas-based cryptocurrency exchange, one of the most valuable startups in the world, said on Monday.

The four-time Grand Slam winner signed a long-term partnership agreement with FTX, as part of which Osaka will be focused on bringing women onto its crypto platform and will play an active role in directing and producing content.

FTX, the owner and operator of crypto platform FTX.com, has been rapidly raising capital over the past year. SoftBank’s Vision Fund 2 invested $400 million in the company in January, major funding that catapulted FTX’s valuation to $32 billion.

Prior to her investment in FTX, Osaka backed salad chain Sweetgreen Inc was listed in New York last year. She is also an adviser to a special purpose acquisition company, Disruptive Acquisition Corporation I, along with other well-known athletes such as Patrick Mahomes and Robert Lewandowski.

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3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow