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Ukraine reaches Russia's energy goals after US-brokered truce ends
Ukraine resumed drone attacks on Russia’s oil refineries on Wednesday, just two days after the three-day ceasefire that was proposed by U.S. president Donald Trump had expired. As the four-year conflict continues, Ukraine has targeted Russian oil infrastructure to reduce Moscow's revenue from the energy industry and dent its military strength. The Russian defence ministry announced on Wednesday that two-hundred and eighty-six Ukrainian drones were intercepted, destroyed and destroyed over Russian regions. Authorities in southern Krasnodar said that a 'drone fragment' fell near an industrial facility and caused a fire. The village of Volna is where the oil products terminals at Taman Port are located. Authorities in the region of Astrakhan, Russia, said that debris from a separate Ukrainian attack on a drone caused an?incident at a gas-processing plant which also produces fuel. Igor Babushkin wrote on Telegram that "all enemy aircraft have been either shot down or neutralized by electronic warfare systems." The debris started a fire. Babushkin said that there were no injuries or casualties and the fire is expected to be put out 'within hours. The plant is located 1,675 km from the Ukrainian border. Sharon Singleton, Editor and Reporter (Reporting).
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Australia shares drop as CBA drops 10% on earnings missed, housing tax changes
Australian shares fell on Wednesday as investors sold Commonwealth Bank and other lending institutions. The?top?bank's missed profit heightened fears that Canberra's proposed curbs to tax incentives for property-investors could slow down mortgage demand. The S&P/ASX 200 closed 0.5% lower, at 8,630.40. This brings its overall decline to 2.8% in the last four sessions. Australia's biggest mortgage lender Commonwealth Bank plunged 10.4%, posting its weakest ever session. The bank erased a market value of?A$29.93 billion ($21.66billion) after an earnings missed and new Middle East-related provisions bleakened the outlook for the banking industry. The financials index is down 4% at a five-month low. The budget proposes to limit negative?gearing on newly constructed homes and replace the 50% capital gain tax discount with an inflation indexation. These changes are intended to shift?investor demand from existing properties toward new housing. Reduced tax incentives to property investors could slow the buying and selling existing homes. Dilin WU, Research Strategist, Pepperstone, says that the tax burden for most long-term investors will be higher under the new regime. This anticipated behaviour adjustment could impact rate-sensitive sectors of the financial services sector, and cause a wave?of prereform sales as July 2027 approaches. These stocks are owned by retirement funds and retail investors for the yield and franking credit. You can change the marginal buyer by changing the calculation of after-tax returns. It's a slow but real burn." In contrast, the real estate sector gained 1.2% on optimism that the budget's?first home buyer support would help to drive demand for new construction. Mirvac and 'LendLease' rose by 3.9% and 1,3% respectively. The copper price has boosted the miners to a 2.1% increase, a two-month high. BHP and Rio Tinto, two mining giants, jumped by 2.9%?and 1.9%?to new record highs. S&P/NZX50, the benchmark index for New Zealand's stock market, fell 0.1% at 13,063.06 following a budget that was tight on spending.
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Gold falls as US inflation data weighs down on Fed rate-cutting hopes
Gold prices ?extended losses on Wednesday as uncertainty ?in the Middle East and stronger-than-expected ?U.S. ?Inflation data dampened hopes for Federal Reserve rate reductions, as attention was also focused on the Trump-Xi Summit this week. As of 0613 GMT spot gold was down 0.1% at $4,710.37 an ounce. This is a further retreat from the three-week high reached in the previous session. U.S. Gold Futures for June Delivery gained 0.7%, to $4.717.50. The markets have begun to price in the possibility of a rate hike by the Fed as early as this year. Kyle Rodda is a senior financial analyst at Capital.com. Data revealed that U.S. consumer inflation rose further in April. The annual rate posted its biggest gain in three year, further reducing the hopes that the Fed would cut interest rates in this year. According to CME Group’s FedWatch, traders have priced in a rate cut by the Fed this year. Markets now see a 30% probability of a rate hike by December. Investors will be watching the Producer Price Index later today, as well as the meeting between U.S. president Donald Trump and Chinese president Xi Jinping, which is scheduled to take place in Beijing from Thursday through Friday. Trump said Tuesday that he "doesn't think" he will need China to help him end the war against Iran. This is despite the fact that hopes of a lasting deal have dwindled, and Tehran has tightened its grip on the Strait of Hormuz. Indian gold and silver futures rose after New Delhi increased import tariffs from 6% to 15% as part of its efforts to curb overseas purchases and reduce pressure on the country's reserves. Spot'silver' was unchanged at $86.53 an ounce after reaching its highest level since the 11th of March earlier in the day. Palladium rose 0.1% to $1,492.75, while platinum fell 0.3% to $2120.29. (Reporting and editing by Subhranshu sahu, Rashmi aich and Pablo Sinha from Bengaluru)
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MSCI's latest May revision added four Indian stocks and removed four others from its key global index.
The global index provider MSCI announced earlier on Wednesday that it had added four Indian stocks to its Global Standard Index, which is widely tracked. These changes will take effect on May 29, 2026. Federal Bank, Multi Commodity Exchange of India, National Aluminium, and Indian Bank are included in the index. Hyundai Motor India, Jubilant Foodworks, Kalyan Jewellers, and Rail Vikas Nigam are excluded. India's weighting in the MSCI Global Standard Index is broadly unchanged, at 12.3%. This compares to a?12.4% following the review of February, and the number Indian constituents remains at 165. Adani Energy Solutions, originally seen as a temporary addition, was left out when it was placed under the NSE's Additional Surveillance Mechanism Framework, a watchlist of unusual trading activity that disqualifies the stock for inclusion. MSCI indexes, which are important global benchmarks that large passive funds track, have a major impact on stock flows. Inclusions usually attract new passive capital while deletions can often cause outflows of funds as funds rebalance their portfolios. Nuvama's Quantitative Alternative Research?expects a passive inflow of $491 Million into Federal Bank, 373 Million into MCX and $308,000,000 into National Aluminium. The projected outflows for Hyundai Motor India, Jubilant Foodworks?, Kalyan Jewellers?, and Rail Vikas?Nigam will be $281 million each, $161 millions, $137 millions, and $136million respectively. Adani Power, BPCL and FSN E-Commerce,?Trent, Oracle Financial Services, are expected to also?draw inflows because of higher weightages. Weights for HUL, Bajaj Finance. TCS, ONGC.and Ultratech Cement, among others,.were trimmed. MSCI's Small-Cap Index had a greater number of exclusions. India's count was reduced from 474 to 459, while the Global Standard Index experienced a balanced mix of additions and removals.
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Mike Dolan: The stress of the long-term bond issue in the G7 is intensifying.
The rise in government borrowing costs over the long term is not slowing down, and there are more aggravators every day. If you have been enthralled by the gravity-defying markets of this year, then look no further for where stress is growing in world markets. The debt, oil, inflation and interest rate risks, combined with the domestic political and geopolitical uncertainties, as well as the waning demand from the private and public sectors for long-term bonds, have pushed borrowing costs in the Group of Seven (G7) advanced economies to their highest level in over 20 years. According to ICE Bank of America's indexes, the implied yield of buckets of G7 Government Debt with maturities of ten years or more has risen this week above 4,6% for the first since 2004. This is the latest in a series of events that have culminated in the end of decades-long government borrowing rates that were ever cheaper. Bloomberg's long-term G7 Bond Investment Index has almost halved its price since its peak 10 years ago and is still falling. The 30-year U.S. Treasury's borrowing costs have topped 5% this week, the highest level in nearly two decades. Britain's gilt yields for 30-years reached their highest levels since the 1990s. Japan's equivalents also are on the verge of new record highs. The Iran War and its associated energy shock ended some stabilization in early this year. The impact of the Iran war is highlighted by Tuesday's news that U.S. inflation surged to its highest level in almost three-years in April. After 11 weeks of war, the hopes for a peaceful agreement have once again been dashed, and crude futures year-end are now climbing towards $100 per barrel. U.S. Treasuries, which account for almost half of the total G7 government's debt, are the elephant of the room. This is despite the fact that the grouping of rich countries has a number of domestic concerns. Futures have wiped out all expectations of Federal Reserve rate cuts in this year. Inflation is now expected to be higher than 4% by May, which is more than double the central bank's goal. The markets are almost 80% pricing in the next Fed rate hike to occur as early as April next year. This is despite President Donald Trump's appointee Kevin Warsh, who will be taking over as Fed chair later this week. Whatever the outcome of?Warsh’s view on interest rates, his position on the Fed's $6.7 billion balance sheet of bonds will cause the long end to shake. Over a third (33%) of the debt on the Fed's balance sheet is made up of bonds with a maturity of at least 10 years. LONG BOND SHIVER The long-term debt situation in Japan is even worse. Its government debt exceeds a fifth the total of the G7. The return of inflation after a long absence, the normalization of Bank of Japan rates following decades of near-zero interest rates and a new round of government spending stimulus from newly-installed Prime Minister Sanae Takaichi sent borrowing costs for long-dated loans soaring. The yields on 30-year bonds have more than doubled over the past two years. The BoJ is pushed to tighten its belt by the ongoing battle to stabilize Japan's ailing yen. Meanwhile, Japan's life insurers and pension funds are losing their appetite for long-term debt due to ageing demographics. The energy shock in the eurozone has been felt more than anywhere else. Markets are already pricing rate increases from the European Central Bank as early as next month. This puts even more pressure on France's worrisome debt dynamics. The 30-year French debt rates are nearing their highest level in 17 years, amid ongoing political and budget tensions. Even in Germany, the 30-year yields on bunds have reached 15-year-highs following its sudden defense spending spree. The UK gilt market will also be rattled by a rise in interest rates from the Bank of England. Even that would have been acceptable if Keir's predicament as Prime Minister this week hadn't made it so. The bond market was shaken by a possible challenge to his leadership from the left-wing of the ruling Labour Party, similar to what happened in Japan last year. This was due to?concerns about the UK's budget being loosened. In recent years, the demand for super-long-duration bonds has been structurally shifted away in Europe. Dutch pension funds can now invest beyond this sector. British defined-benefit funds have also?retreated' since the budget and bonds shock of 2022. The frantic rush by the so-called hyperscaler tech companies to invest hundreds of billions in the artificial intelligence datacenter boom is also prompting significant bond sales, many of which are in multiple currencies with super-long maturities. The competition between governments to raise long-term bond finance is also increasing. But markets have not yet viewed this as a true crisis. One unavoidable result may be to front-load national debts with shorter maturities. Without a reduction in the overall debt, this will only increase refinancing risks, rollovers and potential volatility for sovereign borrowers. Some say that the woes of government bonds are part of why savers and investment firms?seem to have no other choice than high-flying stock prices. A deepening squeeze in the bellwether government lending markets, which are the foundation of global finance would be difficult to ignore by any investor or wider economy. The opinions expressed are those of Mike Dolan a columnist at. This column is great! Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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India races to protect its economy from the oil shock caused by the war in Iran and capital stress
India's macroeconomic prospects have been clouded by a sustained rise in energy prices caused by the Iran 'war'. This has prompted policymakers to take crisis-era measures to shield Asia's third largest economy from external headwinds. India's external sector is being impacted by the most severe disruption in global energy supply in history that began in late February. This has made imports more expensive and kept overseas investors away. Economists have revised down their growth projections, raised inflation projections and forecast persistent pressure on rupee as India faces a third year in a row of a deficit balance of payments. India's reliance on imported oil makes it particularly vulnerable to the Iran crisis. About 90% of India's?oil and 50% of its gas needs are imported. V. Anantha Nageswaran, chief economic advisor, said that India's current account must be managed credibly and that it needs to be financed. It also has to prevent further currency depreciation. India's current-account deficit is expected to increase to 2.5% in fiscal year 2027, from 0.9% the year before. A record pace of outflows of foreign portfolios has put pressure on India's capital account. Since the start of the war, foreign investors have pulled more than $20 billion out of Indian stocks. Year-to-date, outflows are exceeding last year's records. The rupee, which reflects the strain on both sides, has fallen by more than 5% in the past few weeks since the war with Iran began. It is now the worst performing Asian currency for 2026. To manage the strain on the economy, policymakers are focusing their attention on crisis-era strategies. This includes urging citizens to reduce consumption that uses up foreign currency. On Sunday, Indian Prime Minister Narendra Modi urged the government to take a number of measures in order to conserve foreign currency reserves. Late on Tuesday night, the central government raised tariffs on imports of precious metals to reduce demand and cushion the rupee. The central bank has taken rare regulatory measures to support the currency, including selling down its dollar reserves. The emphasis on the "external" sector is reminiscent of previous episodes, such as the Russia-Ukraine War in 2022. However, it comes at a time when the Indian economy has a better start. Before the war, inflation was low and growth was strong.
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Gold falls as US inflation data weighs down on Fed rate-cutting hopes
Gold prices ?extended losses on Wednesday as ?uncertainty in the Middle East and stronger-than-expected ?U.S. Gold prices?extended losses on Wednesday as?uncertainty in the Middle East and stronger-than-expected?U.S. As of 0423 GMT spot gold was down 0.3% at $4,702.09 an ounce. This is a further retreat from the three-week high reached in the previous session. U.S. Gold Futures for June Delivery gained 0.5%, to $4.710.70. The markets have priced in the possibility of a rate hike by the Fed as early as this year. Kyle Rodda is a senior financial analyst at Capital.com. Data revealed that U.S. consumer inflation rose further in April. The annual rate posted its biggest gain in three year, further reducing the hopes that the Fed would cut interest rates in this year. According to CME Group’s FedWatch, traders have priced in a rate cut by the Fed this year. Markets now see a 30% probability of a hike before December. Investors will be watching the Producer Price Index later today, as well as the meeting between U.S. president Donald Trump and Chinese president Xi Jinping scheduled for Thursday and Friday in Beijing. Trump said Tuesday that he does not think he needs China's assistance to end the Iran war, even though hopes of a lasting deal were fading and Tehran tightened its grip on the Strait of Hormuz. Indian gold and silver futures rose after New Delhi increased import tariffs from 6% to 15% as part of its efforts to?curb overseas purchases and ease pressure on the country’s foreign exchange reserves. Silver spot rose by 0.2%, to $86.68 an ounce. It had previously reached its highest level since 11 March. Palladium remained at $1,490.86 while platinum fell 1% to $2106. (Reporting and editing by Subhranshu sahu, Rashmi aich and Pablo Sinha from Bengaluru)
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MSCI pulls six companies out of its index after review
Indonesia's Financial Services Authority said that on Wednesday, there was no panic sale of shares following MSCI's removal of?six companies from its Indonesia Global Standard Index. They added that they would continue their efforts to reformate the stock market. After a review of the MSCI Indonesia Index, the index provider announced that Amman Mineral International and Chandra 'Asri'Pacific had been removed from it. Dian Swastatika Sentosa was also removed, as well as Barito Renewables Energy, Petrindo Jaya Kreasi, and Sumber Alfaria. On Wednesday, the Jakarta Composite Index fell by up to 1.92% and reached its lowest level in more than a year. Shares in the majority of affected companies also dropped by over 10%. Sumber Alfaria Trijaya was the exception, with its shares trading at 2.47% less, after it was added to MSCI Indonesia Small Cap Index. This revision follows comments made by MSCI last month that it would extend its review to Indonesia's stock market until June to assess the reforms announced in the Southeast Asian nation. Indonesia took action in January after an alert from the index provider triggered a stock market crash and exodus of foreign investors. Hasan Fawsi is the OJK chief of capital markets supervision. He told reporters that OJK will continue to push forward with reforms. He said that the drop on Wednesday was "within normal range" and that the volume and frequency in which stock transactions occurred suggested no panic. Once the May 29 rebalancing takes effect, it could lead to forced sales of passive index tracking funds. Gary Tan, portfolio manager at Allspring Global Investments, said: "We expect to see continued pressure in the May 29th rebalance as well as early June due to passive funds adjusting." He said that the sales were concentrated in names that are tightly held, with low free-floats and no active foreign ownership. Index provider warned that Indonesia's status could be changed from "emerging" to "frontier", citing concerns about highly concentrated ownership structures and problems with transparency. Prajogo Pangestu, an Indonesian businessman, has controlling stakes at Chandra Asri Barito Renewables?Petrindo Jaya Kreasi. Dian Swastatika Sentosa belongs to the Sinar Mas Group. This is one of the largest conglomerates in the country, owned by the billionaire Widjaja Family. Emails seeking comment from the?companies were not responded to immediately. The Financial Services Authority of Indonesia (OJK), which oversees the financial sector, is currently scrutinizing some of these companies due to their high concentration of ownership and failure to meet the new threshold free-float rules. MSCI removed 13 Indonesian companies from its Small Cap Index list on Tuesday. These included state miner Aneka Tambong, palm oil conglomerate Astra Group’s Astra Agro Lestari and Sinar Mas Group’s Bumi Serpong Damai. MSCI announced in April that it would continue to limit the increase in shares available to foreign investors as well as the number of Indonesian securities. It will not add Indonesian stocks to the investable market indexes, and it will not allow upward migration between size segments. Reporting by Gayatri Sroyo, Rae Wee, and Ankur Banerjee. Writing by Fransiska Nanangoy. Editing by Martin Petty & David Stanway.
Asia stocks turn green as AI cheer trumps Iran, inflation gloom
After an initial selloff, Asian stocks recovered their footing on Thursday. This was helped by a rebound in Korean shares.
MSCI's broadest Asia-Pacific share index?outside Japan rose 0.3%, after a decline as high as 1%. Japan's Nikkei rose by 0.8% while S&P500 e-minis futures gained 0.2%.
The Korean stock market fell by as much as 3.2 percent on the news that Samsung Electronics failed to reach an agreement with its union on pay. However, the shares recovered to close at a record high of 2.6% on the back of reports the government is trying to control the situation.
In recent weeks the Korean market has exploded, breaking records on an AI-led rally. Some traders believe that this was due for a correction.
Nomura analysts wrote in a report that "Robust AI exports from South Korea, and to a lesser degree, Japan, Singapore, and Malaysia, are buffering energy price shock." U.S. president Donald Trump stated on Tuesday that he did not believe he would need China's assistance to end the conflict with Iran. This was ahead of his meeting later this week with President Xi Jinping. Morgan Stanley stated in a research report that the U.S. China summit could lead to moderate index gains if the ceasefire continues. The firm also raised its price targets for several Chinese benchmarks. The report noted that earnings were improving, supply chain dominance was growing and the yuan was stronger.
The bank upgraded its recommendation for developed market equity to overweight. The bank said that the Middle East conflict has created a wide range of returns, but fundamentals on the micro- and macro-level are generally supportive. "AI and capex related AI will remain relevant across asset classes, and regions." Investors expressed scepticism about the meeting between Trump and Xi leading to a significant improvement in relations.
Phillip Wool, Chief Research Officer and Head of Portfolio Management at Rayliant Investment Research, said: "We have seen this movie before.?And we know that it won't end with an agreement that resets U.S. China relations."
"This creates a low bar for success. As long as Trump can get along with Xi and the trade detente is maintained, this should be enough for both sides to consider this meeting a success." Brent crude fell 1.4% to $106.32, ending a three-day rally. Since late February when U.S., Israeli and Tehran strikes against Iran and the effective closure of Strait of Hormuz by Tehran rattled supply, oil prices have remained at or above $100 per barrel. Samsung Electronics' shares in Seoul fell as much as 6.1% on Wednesday after the electronics giant failed to reach an agreement with the South Korean labour union. This set the stage for over 50,000 employees to strike. Stocks rose by 1.8% later after South Korean PM Kim Min-seok stated that the government would support any talks to avoid a strike, Yonhap News Agency reported. The S&P 500 fell 0.2% and the Nasdaq Composite dropped 0.7% on Tuesday after U.S. Consumer inflation rose by the'most in three year in April. This increased the risk that the Federal Reserve would be forced to increase rates sooner than expected. According to CME’s FedWatch Tool, the markets have priced in any possibility of a Fed rate cut this year. Meanwhile, expectations for an increase?of atleast 25 basis points?at the December meeting are now over 35%, up from 22% earlier that week. The yield on U.S. Treasury bonds 10-years was down by 1.0 basis points to 4.459%. This is a slight retreat after reaching its highest level since July. The U.S. Dollar Index, which measures the strength of the greenback against a basket six major counterparts, held steady at 98.369 and is on course for its third straight day of gains. The dollar was 0.1% higher at 157.73 yen after the Japanese currency briefly surged on Tuesday due to "rate-check" speculation. This is often seen as an indication of intervention.
Sources claim that Tokyo intervened to stop the decline of the yen in the last two weeks. Early European trades saw pan-regional futures up 0.9%. German DAX Futures climbed 0.8%, and FTSE Futures gained 0.6%. Gold was down by 0.1% to $4,708,24. Bitcoin was up by 0.5% to $81,110.13, and ether was up 0.8% at $2,301.66. (Reporting and editing by Shri Navaratnam, Sam Holmes, and Gregor Stuart Hunter)
(source: Reuters)