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Indian shares slump with Asian markets as US-Iran standoff continues
The Indian stock market fell and the rupee hit a new record low on Monday morning as oil prices rose after a drone strike?on an?assault?on a nuclear?plant?in the United Arab Emirates?intensified the tensions in Middle East. The mood was further dampened by U.S. president Donald Trump's warning that "the time is running out" for Iran as the Middle East conflict appears to be stalling. As of 10:05 a.m. IST, the Nifty 50 index fell 1.26%, to?23.347.2. The BSE Sensex dropped 1.20%, to 74.335.62. 15?of 16 major sectors fell. Small-caps and midcaps both lost 1.6% and 2.1%, respectively. The rupee fell to a record low after higher oil prices pushed global bond yields sky high. Brent crude oil rose to $112 per barrel, the highest price in two weeks. Other Asian markets declined 0.8%. Drone attacks in the Middle East are driving up oil prices, according to G. Chokkalingam. He is the founder and head researcher at Equinomics. "High crude oil prices and the widening trade deficit that results are placing significant pressure on the rupee. This, in turn is fueling the continued outflow of foreign capital and weighing down on domestic equity. The foreign portfolio investor has sold Indian stocks valued at $23.52 billion so far this fiscal year, surpassing the previous record of?2025. HDFC Bank and Reliance Industries, two heavyweights in the financial sector, lost 1,4% and 1% respectively. Tata Steel fell 5% after the steelmaker posted a smaller-than-expected fourth-quarter ?profit. Power Grid's shares fell 4.1%, despite its electric power transmission company reporting a profit increase of nearly 10% for the March quarter. Motilal attributed the growth in profit to a deferred tax of 52.8 billion rupees and said revenue and operating profits missed its estimates. Gland Pharma, which bucked the trend and jumped by 13.4% following its 97% increase in net profit for the March quarter, was the only company to do so.
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India restricts the import of most silver to reduce import bills and support rupee
India has curbed the imports of silver in nearly all forms, with immediate effect. The government order was issued on Saturday. India, the world's largest consumer of this metal, is trying to reduce shipments to ease the pressure on the rupee. The restrictions are expected to result in a reduction of silver imports, and a tightening of domestic supplies. This could potentially increase premiums on the local market. India's lower demand, which imports more than 80% its total consumption, could have an impact on global prices. The order stated that India had placed imports of 99.9% pure silver bars and other semi-manufactured silver forms under the'restricted category' with immediate effect. In the past fiscal year, silver imports from both categories totaled more than 90%. This move will tighten the supply of silver on the local market and reduce imports, said Chirag Thakkar. He is chief executive officer at Amrapali Group Gujarat. "Silver has been trading at a discounted price since the government increased import duties. It is expected to trade at a premium rate in the next few weeks." This week, the South Asian nation raised import duties on gold and silver from 6% to 15% as part of its efforts to reduce overseas purchases and to ease pressure on foreign exchange reserves caused by rising oil prices. India spent $12 billion in total on silver imports during the fiscal year 2025/26 that ended in March. This is a record amount compared to $4.8 billion just a year earlier. Silver imports in April jumped by 157% compared to a year ago, reaching $411 million, according to data from the trade ministry. Silver is used for jewellery, coins and bars in India, as well as industrial applications from solar energy to electronic devices. Silver ETFs have seen record-high inflows. India imports silver from the United Arab Emirates, Britain and China. A Mumbai-based bullion seller with a private banking firm said, "It seems the government will allow limited imports of silver for 'industrial use' while discouraging investment products for the short term." Reporting by Rajendra Jhadhav in Mumbai, and Anusha S Shah in Bengaluru. Editing by Louise Heavens & Joe Bavier
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China's economy slowed in April, as retail sales and output fell far below expectations
China's economy slowed in April, as retail sales and industrial output?growth fell short of expectations. The Asian powerhouse was also struggling with a sluggish demand and higher energy costs due to the Iran War. The 'National Bureau of Statistics' (NBS), released data on Monday, showing that the factory output increased by?4.1%?from last year. This compares to a 5.7% increase in March, and a poll predicted a growth of 5.9%. This was the lowest growth rate since July 2023. Retail sales, which are a measure of consumption, grew by just 0.2% last month, down from a 1.7% increase in March. This is the lowest gain since December 2022. These figures were also far below the forecast of a 2% rise. The household consumption remains?fragile. Domestic car sales fell 21.6% from a year ago in April, the seventh consecutive month of decline. Fixed-asset investments?decreased 1.6% in the four-month period of 2026 compared to a 1.7% increase?in January-March. The drop in the official purchasing managers' index for construction and the heavy rains in southern China are some of the factors that have slowed investment growth. Early signs of China's first quarter momentum were evident in April. Beijing's target for the full year is a range of 4.5% to 5.00%. Analysts warn that the economy is still recovering unevenly as industrial production continues to exceed domestic demand. The Middle East conflict has exposed the economy to external risk at a time when domestic consumption is fragile. In April, China's property investments contracted by a greater amount than in the previous year. Exports that were better than expected and China's fuel price controls at home have helped to weather the energy shock. However, higher input costs could squeeze manufacturers' margins further and hurt household spending in the event the conflict continues. Top Chinese leaders pledged to strengthen the country's security in energy, to accelerate its technological?self sufficiency and to seek greater control over supply chains as a response to external shocks. The Politburo reiterated China's fiscal policy as "proactive", and its monetary policy as "appropriately lax". This was in line with the previous meeting and suggested that no additional stimulus plans were imminent. Reporting by Ethan Wang and Joe Cash Editing by Shri Navaratnam
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White House: China has agreed with US concerns about rare earth shortages
The White House said on Sunday that China will address U.S. concern about a'shortage of certain specialty rare Earths due to?Beijing’s export controls. China's export controls on rare earths, introduced in April 2025 as a retaliation to President Donald Trump's Liberation Day Tariffs, continue to restrict the exports of some rare earths. This is despite an agreement last October that China agreed to let shipments flow freely. Beijing's 'grip' has been most tightened on specialty?rare Earths like yttrium and scandium. Both are used in defence, chipmaking, aerospace, and other industries. It read: "China will address U.S. concern regarding supply chain shortages of rare earths, and other 'critical minerals', such as yttrium scandium neodymium and indium." The summary released by the Ministry of Commerce of China on Saturday did not mention rare earths. The factsheet also stated that Beijing would address U.S. concerns about China's export limitations on rare?earth?processing equipment and technology. China refines 90% of all rare earths in the world and has dominated this industry for decades. Its technology and expertise are tightly guarded, and foreign companies cannot access them.
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Asia shares slip, oil prices pile pressure on bonds
Asia share markets fell on Monday, as new drone attacks in Gulf drove up oil prices and bond yields. Meanwhile, the AI boom will be tested this week by the earnings of tech-diva Nvidia. Saudi Arabia intercepted three drones as U.S. president Donald Trump warned that Iran must "act fast" to reach an agreement. The Strait of Hormuz, which used to transport 20% of world oil trade, is still closed to all but the smallest of ships as Tehran attempts to formalise control of this waterway. Capital Economics analysts warned that the closure was draining oil stocks worldwide fast. "Inventories may reach critical levels before the end of June, which could lead to Brent reaching $130-140pb or even higher." If the strait closes by year's end and oil remains around $150pb in 2027, this would drive inflation near 10% in UK and Euro zone, sending rates back to recent peaks, and lead to a global recession. Brent crude was up 1.2% to $110.63 per barrel. U.S. crude rose 1.0% to $106.42 per barrel. G7 Finance Ministers meet in Paris to discuss the Strait?Hormuz, and crucial raw material supplies. Global bond markets were hammered by fears that energy costs will remain high, and therefore continue to drive inflation. The yields on U.S. 10-year notes are up to 4.584% after a surge of 23 basis points in the last week. 30-year bonds have risen 18 basis points. Investors feared that central banks around the world would tighten up to stop an inflationary spiral. A hike by the Federal Reserve this year is seen as a 50% chance. The minutes of the Fed’s last meeting were released on Wednesday. They should show how much pressure was put on the committee to adopt a neutral position and move away from a bias towards easing. Japan's Nikkei index eased by 0.4% after falling 2% in the previous week, though this was still from records highs. South Korean stocks dropped 2.1% as the hot market cools a bit after semiconductor demand drove it to record highs. MSCI's broadest Asia-Pacific share index outside Japan fell 0.6%. China's stock markets reached their highest level in over four years last Thursday, but they will need to deal with data on April retail and industrial output in the later session. AI, RETAIL EARNINGS TO TEST FOR THE BULL RUN S&P futures dropped 0.4%, while Nasdaq Futures lost 0.5%. Analysts at Citi note that while Wall Street was boosted by positive earnings, half of it came from special items like tariff add-backs or asset markups. The gains in both profits and overall indexes are also closely correlated. In a note, Scott Chronert, an analyst at?Chronert & Co. wrote: "We identified 20 stocks that contributed to the majority of index earning upside." "Forward Guidance increases also demonstrate a similar focus." He added that "Broadening" is necessary for indexes to move upwards. This will require a clearer view of the Iran conflict's winding down. Earnings from Nvidia, the world's largest company and most valuable in terms of market value, are due to be released on Wednesday. Expectations for this company are high. Nvidia's shares have risen 36% from the low of March, while the Philadelphia SE?semiconductor Index has soared 60%. This is due to the fervent demand for chips, as tech companies invest massively in AI-related infrastructure. This week, Walmart will release a number of retail results that will give a glimpse into the consumer's reaction to high energy costs. The greenback has been the most liquid currency in the forex market because of risk aversion. The United States? The?U.S. The euro was at $1.1620 after losing?1.4% in the last week. The pound sank to $1.3318 after a 2.3% drop last week, as political instabilities added to the already high pressure on gilt markets. The dollar remained steady against the yen, at 158.64. Only the threat of Japanese interference prevented another speculative attack on the 160.00 chart. Gold was unchanged at $4,540 per ounce on the commodity markets. It has received little support as a safe-haven or a hedge against inflation. (Reporting and editing by Jacqueline Wong; Reporting by Wayne Cole)
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Oil reaches 2-week high following drone attack on UAE Nuclear Power Plant
Oil prices?extended their gains on Monday, as 'efforts to halt the U.S. and Israeli war against Iran seemed to have stalled. After a nuclear power station in the United Arab Emirates was attacked and U.S. president Donald Trump is expected discuss military options for Iran. Brent crude futures rose $1.44 or?1.32% to $110.70 per barrel at 2337 GMT, after reaching their highest level since May 5,?earlier that day. U.S. West Texas Intermediate is now at $107.26 per barrel, an increase of $1.84 or 1.75 percent, after reaching its highest level since the 4th of May. Last week, both contracts rose more than 7% as the hopes of a peace agreement that would stop ship attacks and seizure around the Strait of Hormuz faded. ?Last weeks talks between Trump's and Xi Jinping's Chinese counterparts ended without any indication that the world's largest oil importer would be able to resolve the conflict. Concerns about an escalation of the conflict were raised by drone attacks against the UAE and Saudi Arabia, and the rhetoric coming from the U.S. Emirati officials confirmed that they were investigating the cause of the attack on the Barakah Nuclear Power Plant and that the United Arab Emirates had every right to respond in kind to "terrorist" attacks. Saudi Arabia warned that it will take all necessary measures to protect its sovereignty and security if anyone attempts to violate its sovereignty. Tony Sycamore, IG's market analyst, said: "These drone attacks are a stern warning - new U.S. or Israeli attacks on Iran may trigger further proxy attacks by Iran...or its regional proxies on Gulf energy...and critical infrastructure." Axios reports that Trump will meet with his top national security advisors on Tuesday in order to discuss military options regarding Iran.
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Australia orders China-linked investor to sell Northern Minerals stake
Australian Treasurer Jim Chalmers announced on Monday that he has 'ordered six shareholders to sell their shares in Northern Minerals, after a 'concern about Chinese parties attempting to control the rare earths mining company. Northern Minerals has developed the Browns Range Heavy Rare Earths Project in Western Australia, at a moment when Western governments seek to loosen China’s stranglehold on?the industry. Heavy rare earths play a vital role in industries like semiconductors and defense. Chalmers stated in a press release that the?decision is intended to protect national interests and ensure compliance with its foreign investment framework. He said that "we operate a robust, non-discriminatory framework for foreign investment and will take additional action to protect our national interest in this regard." Northern Minerals spokesperson had no immediate comment. In recent years, the government has intervened on several occasions in relation to the company's shareholder base. The first intervention was in 2024 when five Chinese parties were required to sell their shares of the miner for national interest reasons. Australian authorities found that some of these parties sold shares to a related party at the time, Hong Kong based investor Ying Tak. Treasurer Chalmers issued an interim order to Ying Tak in April, which prohibited it from voting at Northern Minerals annual meeting or selling its shares. The announcement made by the Treasurer on Monday did no name the six investors. Ying Tak's phone number and email address are not listed in Hong Kong's company registry. Reporting by Melanie Burton and Alasdair Pala in Melbourne; Editing by Himani Sarakar and SonaliPaul
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Bloomberg News: NextEra will discuss paying $76 per Dominion share
Bloomberg News reported that the U.S. power firm NextEra Energy was in talks with Dominion Energy about a deal that would value Dominion Energy at $76 per share, or $66 billion. The two companies would form one of the biggest power companies in America, measured by their market value. Calculations show that the offer represents an increase of approximately 21%?over Dominion's May 15 closing price. The?Bloomberg article added that NextEra would exchange about 0.8 shares of its stock per outstanding share?of Dominion in a deal which could be announced by Monday. The report stated that while NextEra intends to pay mostly in stock, the deal will also include a small amount of cash. NextEra shareholders will own approximately 75% the combined company. The report could not be verified immediately. Companies did not respond immediately to requests for comments outside of regular business hours. According to LSEG, Florida-based NextEra is one of the largest energy developers in the world, with a market cap of $194.69 Billion, compared to?about $54.29 Billion for Dominion. Financial Times reported the news of the merger on Friday. Citing sources, the Financial Times said that the deal would result in a company worth?about 400 billion dollars, including debt. The record U.S. electricity consumption of 2025 will continue to rise?overthe next two years as the AI boom?drives the data-center operators?to lock in utility supply agreements, boosting the sector profits amid increasing demand. (Reporting and editing by Chris Reese, Nick Zieminski and Chandni shah in Bengaluru)
MORNING BID - Bonds taste the destruction of demand for oil
Wayne Cole gives us a look at what the future holds for European and global markets. There's a limit on 'wishful thinking. The markets had assumed that the U.S. would?see sense and reach a deal with Iran at any time. Tehran still seems to favor?attack drones and President Trump tweets in ALL CAPS. Investors have realised that the Strait of?Hormuz won't be opening anytime soon. There are still some ships passing through but not as many as the average pre-war of 136 per day. Global inventories are also steadily shrinking. Analysts estimate that 1 billion barrels will be lost by May at current levels.
Demand destruction will be needed to bring the market back into balance, which means higher prices. Brent is now back above $111.00, and the contract for September has reached $100. This is bad news for global inflation, but it's also perfect timing for summer driving season. It has already taken a toll on Chinese economy activity. Retail sales in April rose by just 0.2%, well below the expected 2.0%, and industrial output was disappointing.
Bonds are continuing their decline as the 10-year Treasury yields, at 4.631% and 5.159% respectively, have reached their highest levels since February 2025. The increase in borrowing costs will add to Washington's already large budget deficit. Inflation and repayment worries are now added to the list of concerns. The current administration is not showing any intention to reduce debt. Instead, they are arguing for $1.5 trillion in defence spending, and spending a billion dollars on a new ballroom, as well as who knows how many millions on a victory arch. When G7 finance minsters and central banks meet today in Paris, war, oil, inflation rates, and deficits are all on the menu. Kevin Warsh will have to balance Trump's desire for low rates with the outlook for inflation.
Higher yields will also increase the discount rate on future corporate earnings. This could put pressure on already stretched equity valuations. Analysts at Citi warn that while?earnings are generally?upbeat?, the improvement is largely due to windfalls such as tariff repayments. The companies are the ones who get the money and not the people who paid for it.
Citi estimates that only 20 stocks accounted for almost all of the earnings surprise. If AI and energy are excluded, S&P 500 estimates for earnings in 2027 were flat. This sets up nicely for AI-diva Nvidia's Wednesday, where expectations are high. Street?calls for revenue of $78.5 billion, an 80% increase from a year ago, and adjusted earnings between $1.75 and $1.78. But fans are hoping for more. The stock fell after the bell, despite the fact that the company had beaten expectations.
Market developments on Monday that may have a significant impact
France hosts the G7 Finance Ministers and Central Bankers meeting in Paris
(source: Reuters)