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As trade tensions ease, copper prices rise
The price of copper rose on Friday as a result of signs that trade tensions are easing between Washington and Beijing. This is despite the fact that China, which is the world's largest metal consumer, has reduced its imports. Benchmark three-month Copper on the London Metal Exchange rose 0.6% to $10,739 per metric ton at 1041 GMT. The 21-day moving-average at $10 776 was a strong resistance. Metal used for power and construction is down 4% from its record high of 11,200 dollars on October 29, when fears about a tighter supply globally pushed the metal to that level. Dan Smith, managing Director of Commodity Market Analytics, said that copper demand was still increasing, but it wasn't as strong as expected as of the previous month. The global macro-story is fairly good with solid PMIs. However, China's story got weaker in October due to weak PMIs and lower imports of copper. Official data revealed that China's copper exports fell 9.7% in October compared to the previous month, due to consumers' hesitations about restocking. Exports in China fell unexpectedly after months of a front-loading of U.S. orders. This was done to beat President Donald Trump’s tariffs. Imports grew at the slowest pace in five months. Freeport-McMoRan reported in a SEC document that Freeport Indonesia had restarted two mines within its Grasberg Copper Complex. Smith stated that LME aluminium and copper look "a little wobbly" in the short-term, with potential bearish signals coming from algorithmic computer models which place buy and sale orders based largely on fund movement signals. LME aluminium increased 0.5% to $2.857.50 per ton. Zinc rose by 0.8% to $3,000, lead gained 0.6% to $1,045; tin rose 0.3% to $35,890, and nickel climbed 0.4% to $15 095. (Reporting and editing by David Goodman Additional reporting by Dylan Duan)
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Indian beauty retailer Nykaa reports a profit increase of more than three times on strong makeup demand
The quarterly profit of Indian beauty retailer Nykaa more than tripled on Friday. This was boosted by the steady demand for skincare and makeup products, as well as through new partnerships with global brands. The company, which was formerly known as FSN e-Commerce Ventures posted a profit for the quarter ending September 30 of 344.4 millions rupees (about $3.9 million), up from 100.4million rupees one year earlier. Nykaa's quarterly results reveal that it is focusing on profitability and doubling down on the core beauty business. This has meant expanding the offline presence and securing strategic partnerships, including Katrina Kaif’s Kay Beauty and Rihanna’s Fenty Beauty. Nykaa has been able to cater for India's beauty and personal care $28 billion market, which has remained resilient in spite of a general slowdown in consumption. The beauty industry's revenue grew 25%, to 21,32 billion rupees. This was boosted by premium brands like Chanel, Korean skincare brand Aesura and sunscreen manufacturer Supergoop. The fashion vertical of the company, which includes clothing and accessories from brands like Victoria's Secret, Titan's Mia and others, saw a 21% increase in sales, increasing overall revenue to 23,56 billion rupees. Nykaa has added 19 new beauty stores to its 262 total during the third quarter. The focus on premium products helped to increase gross margins from 43.8% in the previous year. ($1 = 87.8950 Indian Rupees) (Reporting and editing by Ronojoy Mazumdar in Bengaluru)
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Congo suspends operations at Chinese mine following spill
After a spill in the south of this resource-rich nation, the Democratic Republic of Congo suspended operations at a Chinese operated mining site. Mines Minister Louis Watum Kabamba announced late Thursday. Congo Dongfang International Mining, which sources mainly copper and cobalt in Central Africa, is an arm of China's Zhejiang Cobalt. Watum told X he had come to Lubumbashi, Congo's second largest city, after learning about a spill that had affected many neighborhoods. He claimed that the company did not meet the environmental standards and was causing serious water pollution, which exposed the public to health risks. He added that the three-month suspension could be extended, if needed. Watum stated that "CDM should fully repair any environmental damage, pay its employees, compensate the populations affected, and adhere to the Mining Code." He added that an investigation into the incident would take place. Congo, which accounts over 70% of global output of cobalt, frozen exports of the metallic in February to curb supplies and drive prices up. The authorities lifted the export ban on October 16 in order to resume exports based on a quota-system. Sources in the industry said last month that cobalt producers were still waiting on government approval before they could restart shipments. (Reporting and writing by Congo Newsroom, Anait Miridzhanian, Editing by Kim Coghill).
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Gunvor's asset bid should not be considered by the Kremlin, says Kremlin after Lukoil drops its bid
The Kremlin stated on Friday that the international interests of Russian oil giant Lukoil should be respected, after Swiss commodity traders Gunvor announced they had withdrawn their proposal to purchase Lukoil’s foreign assets. Gunvor made its move after the U.S. Treasury labeled it Russia's puppet and indicated that Washington opposes the deal. When asked about the latest development, Kremlin spokesperson Dmitry Peskov stated that it was a commercial matter, and that it related to illegal U.S. Sanctions on Moscow. However, it was vital that Lukoil’s interests be protected. Peskov said: "We are of the opinion that any legitimate interest of a large international company including a Russian, such as Lukoil in international trade and economic relationships must be respected." Lukoil had to sell off its foreign assets last month after the U.S. sanctioned the company along with Rosneft - another Russian oil giant. Washington claimed that the sanctions were part of a campaign to bring Russia to the table for negotiations over Ukraine. Lukoil is a company that has operations in countries as diverse As well as significant assets in post Soviet countries such as Kazakhstan, Uzbekistan, and Azerbaijan, there are also large amounts of money held by Finland, Switzerland and Iraq. (Reporting and writing by Gleb Stlyarov, Lucy Papachristou, Andrew Osborn).
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Gold prices rise on hopes of a US rate cut and government shutdown problems
Gold prices rose on Friday, as the Federal Reserve's expectations of further rate cuts and concerns about the U.S. economy amid the prolonged shutdown of the government boosted demand. As of 0925 GMT, spot gold rose 0.8% to $4,010.72 an ounce. U.S. Gold Futures for December Delivery gained 0.7% per ounce to $4,019.50. Independent analyst Ross Norman said, "The bull market is still going on." The central banks' gold purchases and rate cuts are still on the table. Data showed that the U.S. economy lost jobs in October, mainly due to losses in the retail and government sectors. Cost-cutting and artificial intelligence adoption by companies also led to an increase in announced layoffs. Rate cuts are more likely to occur when the job market is weak. The market participants are now predicting a 67% probability of a Fed rate reduction in December. This is up from 60% just before the report. Last week, the Fed cut rates and Chairman Jerome Powell said it could be the last time the borrowing costs are reduced for the year. Soni Kumari is a commodity analyst with ANZ. She said that the focus now is on macroeconomic numbers, and when the U.S. government shutdown will end. This is helping to boost safe-haven gold demand. The longest government shutdown in U.S. history has been caused by a congressional impasse. Investors and the Fed, who rely heavily on data, have had to rely instead on indicators from the private sector. Silver spot climbed by 1.7% to $48,80 an ounce. Palladium rose 1.5% and platinum 0.9%, respectively, to $1,554.66. Both metals will still suffer a loss for the week. (Reporting from Brijesh Arora and Ishaan Patel in Bengaluru, Editing by Ronojoy Mazumdar).
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Blog finds that climate risk rarely causes ECB collateral to be downgraded
In a Friday blog post, the ECB stated that the European Central Bank already factors climate-related risks into the assessment for collateral used when borrowing money from the bank. However, this rarely results in credit rating changes. In its 2021 climate action plans, the ECB made the integration and assessment of climate risks a priority. The bank also expects that climate risk will be factored in to the credit ratings of assets provided by banks when borrowing from the central banking. The blog post, which is not necessarily the ECB, argued that "while climate risks are widely acknowledged, they rarely result in rating changes." "Several persistent obstacles still limit the full integration of climate risk into credit rating." Both the ECB's own internal credit assessment systems as well as external rating agencies are used to assess climate risk, but neither has had a significant impact on collateral value. The blog stated that when using its own system, the percentage of credit ratings that are affected by climate risk is less than 4%, and most adjustments only affect one rating grade. The blog post stated that in the case of external agencies environmental, social and governance factors account for approximately 13% to 20% of all rating decisions across the major agencies. However, climate change-specific ratings are only 2% to 7 percent of the total. The blog stated that while actual risk might be higher, it is difficult to assess because banks may mask the vulnerability of certain debtors. Risk mitigation strategies can also reduce their perceived risk. Rating horizons tend to be short and medium term, but climate risks are usually long-term. It argued that "Furthermore reliable, granular data on climate change remain scarce," especially for smaller issuers. Reporting by Balazs Coranyi Editing Tomasz Janovowski
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Commissioner: EU must protect the car industry against Chinese competitors
In an interview published Friday, the European Union's chief of industry said that it must defend its auto industry against Chinese competition. This includes reassessing its zero-emissions target for new cars, vans and trucks by 2035. Stephane Sejourne stated that the EU also needs to diversify its exports, and create new rules for protecting production in Europe. "We need to be less naive and bring ourselves up to the level of the major economies around the world." The former French Foreign Minister told Italian newspaper La Stampa that we are the only continent lacking strategic thinking in industrial policy. He warned "if we don't intervene, the number of cars sold and produced in Europe in ten (millions) years will drop from 13 to 9 million". He said, "We must be flexible in our goal to eliminate all internal combustion vehicles by 2035." In response to automakers who claimed that a complete switch to electric vehicles is no longer possible, the EU will review the target before the end of this year. Sejourne stated that European automakers should look to new markets and reduce bureaucracy. He said earlier this week that the European Commission intended to announce a new category affordable small electric vehicles to counter Chinese competition, and to revive the internal markets, as part a broader strategic plan to be announced on December 10. The Industry Commissioner also hinted that measures would be taken against Chinese production facilities in Europe. In Spain and Hungary, there are now manufacturers who assemble Chinese vehicles in Europe using Chinese components and Chinese staff. Sejourne stated that this was unacceptable. Sejourne, when asked whether Europe should adopt protective measures, said that "it is important to introduce conditions for foreign investment in Europe", and added that tariffs would however create trade tensions as well as hurt production. He said that to reduce the dependence on China, Europe must look at new suppliers, such as Brazil, Canada, and African countries. It should also introduce restrictions on the use of rare earth minerals and increase recycling.
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China registers platinum and palladium Futures
China has approved the registration of palladium and platinum futures and options. This is a major step towards the start of derivatives trading for the metals that are used by automakers. China Securities Regulatory Commission announced on Friday it will supervise the Guangzhou Futures Exchange in order to ensure a smooth and successful launch of palladium and platinum futures and options. The regulator has not disclosed a launch date. The Guangzhou bourse announced its plans in July of last year. It was founded in 2021, and it focuses mainly on green energy products. Industry insiders claim that the exchange has been in communication with futures companies and producers on the design of proposed contracts. The tight supply of palladium and platinum has pushed up prices this year. Analysts have increased their price forecasts for palladium and platinum in 2026. They cite tight mine supplies, tariff uncertainty, and a shift from gold investment. Reporting by Amy Lv and Xiuhao chen, Editing by David Goodman
AI rally hits speedbump, tech stocks drop to weekly low
Investors became uneasy over the extent of the artificial intelligence rally, and yen and bonds were stable.
S&P 500 and Nasdaq futures were up about 0.3% by the afternoon in Asia. This was after a Nasdaq drop of 1.9% on Thursday.
The world's largest tech index has fallen 2.8% this week, and if that trend continues, it will be the biggest drop in a single week since April when tariffs were first announced. Since then, the Nasdaq index has gained over 50%.
European futures and FTSE Futures both fell by 0.3%.
Japan's Nikkei dropped 1.2%, resulting in a loss of 4.1% per week, the biggest since April. In Seoul, the KOSPI declined 1.8%, resulting in a weekly drop of 3.7%, the biggest since February.
Softbank Group Corp, a tech investor, fell nearly 20% in the past week. Chip and cable manufacturers were also amongst the worst performers. Bitcoin, which is sometimes used as a barometer for tech sentiments, has fallen 8% this week to $101,090.
MOOD SHIFT
The pullback of AI-related shares has not been triggered by any obvious event, but the reaction to recent results reveals that some fears are beginning to surface about the possibility of a bubble and profitability questions.
Meta's stock plunged late last month after it revealed large capital expenditures as the company builds data centres to support its AI push. Palantir Technologies, a data and AI company, has also seen its shares fall despite exceeding earnings expectations.
Herald van der Linde is the head of equity strategies for Asia Pacific, HSBC.
"And another one says it. Then a third. A fourth person says that these three are all selling. It's possible that I am selling, too. It's just a change in market sentiment. This could be happening now."
Overnight, the S&P 500 index closed down 1.1% and the Philadelphia SE Semiconductor Index fell 2.4%.
BONDS, YEN HIGHER
Bond markets rose on the back of a demand for safety, and as second-tier U.S. data indicated a wave layoffs which could support future rate cuts in the U.S.
The benchmark 10-year U.S. Treasury rates fell 6.4 basis point to 4.09% Thursday, after Challenger, Gray & Christmas, a firm that specializes in outplacement, said that there was a spike in the number of announced job cuts for October. On Friday, the yields remained unchanged.
These private surveys have attracted attention on the market, while a long-term U.S. shutdown has stopped official U.S. data publishing.
The dollar was dragged down by the lower yields, but it was still set to have a relatively steady week. The euro was largely stable throughout the Asia session, at $1.1535.
The safe-haven Japanese yen is expected to rise modestly by 0.3% per week, last trading at 153.47 yen for every dollar.
The pound jumped in value after the Bank of England held interest rates, but the possibility of a rate cut in December limited gains. It traded at a slight discount in Asia and was trading at $1.3115.
Brent crude oil held steady at $63.58 per barrel and Safe-haven Gold briefly traded above $4,000 per ounce.
The price of soybeans is expected to drop by a week, but there are no signs yet that China will be buying 12 million tons before the year's end. (Editing by Lincoln Feast, Jacqueline Wong and Jacqueline Feast)
(source: Reuters)