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Indian benchmarks have their worst session in the last three weeks due to US tariff fears.
India's benchmark indices fell on Tuesday. It was their worst session in the last three weeks. Fears of reciprocal tariffs by the U.S. were to blame. The NSE Nifty50 closed 1.32% lower, at 23,071.8. Meanwhile, the BSE Sensex dropped 1.32%, to 76,293.6. Blue-chips dropped for the fifth consecutive session, and their largest single-day percentage decline since January 21. In five sessions, the indexes lost around 3%. The benchmarks have fallen about 12% from the record highs they reached on September 27, 2024. Meanwhile, smallcap and midcap indices are moving into bear market territory. They are down 20% from their respective all-time-highs of December 12 and September 24. The more domestically-focussed small and midcaps indexes tumbled 3.5% and 3% each on the day, taking the combined drop from their record highs to 18.5% and 16.5%, respectively. Analysts believe that small and midcap stocks could face further pressure from investors as the earnings growth does not justify high valuations. In the meantime, U.S. president Donald Trump raised tariffs on imports of steel and aluminum to 25% on Monday and announced plans to impose reciprocal levies against several countries within two days. Multiple brokerages have said that India is likely to be the country most affected by reciprocal tariffs because of its large tariff differentials. Trump's tariff threat continues to harm market sentiment and trigger selling pressure. Vinod Nair is the head of research for Geojit Financial Services. The testimony of Federal Reserve Chair Jerome Powell later in the afternoon will be closely evaluated for its commentary on U.S. Tariffs and Inflation. Investor sentiment has been affected by both tariff concerns and the slowing of domestic corporate earnings. Eicher Motors, the maker of Royal Enfield motorcycles, was the biggest percentage loser among individual stocks. This is because it missed quarterly profit and margin expectations.
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India's thermal coke imports are down for the second consecutive year
Industry officials have said that India's thermal imports will fall in 2025 for the second consecutive year due to a decreasing reliance on coal as a power source, slowed economic activity, and record-high inventories. The six Indian and foreign coal traders who spoke at the Coaltrans India Conference in New Delhi all expected that shipments would decline this year. Three traders predicted that imports would plummet by about 10%, to 155 million tons. Two traders predicted a drop of 1-2% while the third forecasted a decline of 7-8%. The traders did not want to be named as they weren't authorised to talk to the media. The lackluster outlook for India, the second-largest importer behind China of the dirty fuel, comes at a time when traders are concerned about an oversupply of coal in the global market. A lower Indian appetite for coal imports could put further pressure on prices. Data from the consultancy Bigmint revealed that India's imports fell by about 2% in 2024 to 173 millions metric tons. This was primarily due to the booming production of Coal India, the world's biggest coal miner, which drove stockpiles to record levels at power plants. Data from Indian coal trading company I-Energy revealed that Coal India's increased production has helped India reduce its dependence on imports over the past decade by 5.5 percentage point to 20,5% by 2024. Data showed that the drop in imports was also due to an increase in demand for petroleum coke from the cement industry. The data indicated that the price-sensitive markets preferred the cheaper alternative. In his presentation, Vasudev Pamanani, Director at I-Energy, said that the price of petcoke would be more competitive than thermal coal by 2025. He also noted that increased production by private mines resulted to a reduction in buying by traders.
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Lower wind supply boosts spot prices
The European spot electricity prices for Wednesday increased on Tuesday, as the wind power generation was expected to decline. However, gains in France were slightly offset by higher temperatures that will reduce demand. At 0949 GMT, the German power for day-ahead was up by 26.5% at 151.75 Euros per Megawatt Hour. LSEG data shows that the French baseload rate for the day was 151.5 euros/MWh. This is an increase of 5.9%. Florine Enengl, LSEG analyst, says that residual load in Germany is expected to increase on Wednesday, due to a sharp decrease in wind supplies. Imports are expected up until evening. LSEG data revealed that on the supply side Germany expected wind output to drop by 12.5 gigawatts to 18.2 GW, while French output was predicted to fall 430 Megawatts to 2 GW per day. The French nuclear capacity remained unchanged at 82%. LSEG data shows that power consumption in Germany will increase by 130 MW on Wednesday to 63.5 GW, while France's demand is expected to fall 1.9 GW to 64.66 GW. This is due to the fact that temperatures are expected to rise 1.2C to 7.2C. The German baseload contract for the year ahead was down by 0.8% to 100.75 Euros/MWh. In France, it fell 1.5% to 73.70 Euros/MWh. The benchmark contract for 2025 on the European carbon market was down by 0.8%, at 82.28 Euros per metric ton. Analysts at Energi Danmark said that the European benchmark gas price initially declined in early trading, and this should lead to falling prices for German forward curves, even though the market is still very volatile. European policymakers concerned about energy prices have shot their own foot in the mouth - twice. Two rules designed to manage the gas market of the region run the risk instead of overheating the market during the summer months, when stocks should be refilled. (Reporting and editing by Kim Coghill; Forrest Crellin)
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Trump tariffs drive safe-haven Gold to record high
Gold prices reached a new record on Tuesday due to demand for safe-haven assets as President Donald Trump’s new tariffs against steel and aluminum imports raised concerns over a potential global trade war. Gold spot reached a high of $2,942.70 an ounce during Asian trading hours, before falling to $2,909.49, up 0.1%, as of 0916 GMT. Bullion's 8th record high for 2025 brought $3,000 into view, as investors navigated growing uncertainty over the repercussions U.S. Trade policies. U.S. Gold Futures increased 0.1% to $2.936.10 and are currently trading at a higher price than the current spot price of about $25. Lukman Otunuga is a senior research analyst with FXTM. He said that uncertainty and unpredictability regarding Trump's presidency may increase appetite for gold. Trump has raised the tariffs on imports of steel and aluminum to a flat rate of 25%, "without any exceptions or exclusions". He hopes this will help struggling industries in America but risks triggering a multi-fronted trade war. Technical analyst Wang Tao stated that gold could extend its gains to as high as $2,950 - $2,962 an ounce before it reverses its upward trend. The Federal Reserve chair Jerome Powell’s testimony on Wednesday and the U.S. Inflation data will provide traders with new clues about the outlook for interest rates in the largest economy of the world. The Fed is likely to delay cutting rates until the next quarter, according to a poll. Tariffs may increase inflation in the United States and delay rate cuts. Otunuga said that any surprise in Powell’s testimony, or a surprise to the downside in the CPI report could cause gold's technical correction. Bullion is a good hedge against inflation, but rising interest rates make it less attractive. Silver spot fell by 0.8% per ounce to $31.77, while platinum slipped 0.9% to $985.20, and palladium dropped 1.4% to $969.25.
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EU warns Trump tariffs may trigger firm countermeasures
Ursula von der Leyen, President of the European Commission, pledged "firm and proportionate" countermeasures in response to U.S. president Donald Trump's decision on Tuesday to impose tariffs for all steel and aluminum imports. This heightened fears of a possible trade war. Trump signed a proclamation late Monday night to increase tariffs on steel and aluminum imports by 25%, without any exceptions or exclusions. An official at the White House said that these measures would go into effect on March 4th. Von der Leyen stated in a press release that she regretted the U.S.'s decision. She added that tariffs are taxes that are bad for businesses and even worse for consumers. In the last decade, EU steel exports have averaged around 3 billion euros (3.10 billion dollars) per year to the U.S. "Unjustified tariffs against the EU won't go unanswered. They will trigger firm, proportionate countermeasures." "The EU will protect its interests," said she. Von der Leyen didn't provide any details about the response. One option is to reactivate tariffs that the EU imposed on the United States in 2018, but were suspended as part of a truce between von der Leyen, and Joe Biden, the former U.S. president. Tariffs on U.S. goods such as motorcycles, orange juice and bourbon are suspended by the EU until March 31. Maros Sfcovic, EU Trade chief, described the U.S. ruling in an address to the European Parliament. "lose-lose scenario". He said that the Commission is now evaluating the scope of U.S. actions and the appropriate EU reaction. Trump's latest trading salvo drove gold prices to record highs on Tuesday, on the back of safe-haven demand. The precious metal hit $2,942.70 early in trading. A videoconference of European Union Trade Ministers scheduled for Wednesday will allow the Commission to hear from its 27 EU member states on their response. Joe Biden, Trump's successor, suspended the steel and aluminum tariffs that Trump imposed in 2018. They were replaced by quotas. Exports of EU steel to the United States have dropped by around 1 million tonnes to 2.2 millions in 2019-2024. Tariffs could lead to a re-direction of 15 million tons that the United States imported from non-EU countries last year. ($1 = $0.9692 euros) Reporting by Philip Blenkinsop Editing Peter Graff and Sharon Singleton
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BestChange, a crypto exchange platform, is in the dark about Russia's block.
BestChange, a cryptocurrency exchange platform, has stated that it does not know why Roskomnadzor's website was blocked. However it says it is working with the central banks to try and lift the ban. In Russia, it is illegal to circulate and advertise digital currencies, but cryptocurrency mining is legal. Roskomnadzor has restricted bestchange.ru in Russia, the platform responded late Monday to a comment request. "Unfortunately, this is not the reason for which it happened. We are in communication with the central banks to identify the cause and we're interacting with regulators to clarify the issue and lift the ban. Roskomnadzor lists bestchange.ru on its website as being blocked. Roskomnadzor told RIA that the block was due to "legal violations in the financial sphere". Roskomnadzor didn't immediately respond to an inquiry for comment. BestChange says that new crypto regulations or a problem with a service user could be the cause of the ban. Russia legalised cryptocurrency miner and introduced taxes which could generate up to 200 billion Rubels ($2 billion per year) from miners. Since then, Moscow has restricted crypto mining to some Siberian areas in order to avoid power shortages. In order to avoid payment delays caused by Western sanctions, Russia allows businesses to use cryptocurrency in international trade. However, a trial period has yet to begin.
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Stocks of Chinese steelmakers fall as Trump's new tariffs increase uncertainty over exports
The shares of major listed steelmakers, the top steel producer in China, fell on Tuesday after President Donald Trump's new tariffs stoked fears about possible impacts on steel exports for this year. Trump raised the tariffs on imports of steel and aluminum to a flat rate of 25% on Monday, "without any exceptions or exclusions", in an effort to help struggling domestic industries. However, this move increases the risk for a multi-fronted trade war. Shares of Baoshan Iron and Steel, HBIS Co., Angang Steel, Hunan Valin Steel Co., Shandong Iron and Steel Co., Jiangsu Shagang Co., and Shandong Iron and Steel Co., fell between 0.14% and 2.63%. The Shanghai Futures Exchange closed the daytime trading with a loss, while the CSI Steel Index fell 0.52%. The fear is that the new tariffs could add to the uncertainty surrounding China's exports of steel this year. Trade tensions are already a threat, but the impact on Chinese direct steel exports to the U.S. will be limited due to the small proportion of trade flows. Customs data revealed that China's direct exports of steel to the U.S. in 2017 were 890,000 tons. This represents just 0.8% its total exports, which reached a nine-year record at 110.72 millions tons. China's strong steel exports helped offset the dwindling demand at home, which was hampered by the prolonged property crisis and lower than expected consumption in the infrastructure sector. In a recent note, analysts from consultancy Fubao stated that "both direct exports as well as transit trade would feel some impact" if the tariffs are implemented more strictly. Transshipment or transit trade is the practice of buying cheap steel from China and then reselling it to another country, such as the U.S., to avoid tariffs. Pei Hao is a senior analyst with international brokerage Freight Investor Services. Some countries transshipping steel will need to reduce their purchases from major producers. The manager of an East China steelmaker who requested anonymity because he was not authorized to speak with the media warned about "a butterfly-effect on the market which takes time for it to manifest." The manager refused to divulge any further details, saying that "the bad news hasn't started yet".
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UniCredit pledges to maintain 2025 profits and increase payouts
UniCredit posted earnings on Tuesday that were better than expected for 2024 and stated it would keep profits stable in spite of declining rates this year, while promising to increase shareholder reward levels between 2025-2027. After years of record profits, investor payouts, and the ECB rate hike cycle, European lenders have been looking for new profit-generating strategies. Some have turned to mergers & acquisitions. UniCredit, under the leadership of CEO Andrea Orcel, has launched an aggressive expansion plan. It acquired a 28% stake at Germany's Commerzbank, and made an all-share offer for Banco BPM, a smaller competitor in Mexico. In early February, the bank revealed that it had acquired a 4,1% stake in Generali. The bank's investment in Italy's largest insurer gives it a lot of influence over other takeovers and boardroom fights in Italian finance. UniCredit is returning 9 billion euros to its shareholders as dividends and share buybacks. The company's 2024 profits still benefitted from an increasing net interest margin - a measure that measures the profit generated by the difference between deposit and lending rates. Analysts at JPMorgan said that the capital distribution exceeded expectations as well as the guidance to make an even greater distribution in 2025. UniCredit’s profit target for 2027 of 10 billion euro was also higher than market expectations. In a note, KBW analysts stated that the management outlook was positive. "UniCredit shares have outperformed SX7E (European Banking Index) by 6% in the last month. But with these results, we believe the market won't be disappointed." UniCredit's shares dropped 2.7% at the opening of trading on Monday, falling behind other European banks. The drop was a result of a report in the Corriere della Sera on Tuesday, which cited banking sources and stated that Delfin (the holding of the Del Vecchio Family) is looking into the possibility of selling their 2.7% stake in UniCredit. Delfin did not respond to a request for comment. UniCredit's share price has nearly six-folded since Orcel arrived in 2021. This gives UniCredit a powerful hand when it comes to merger deals that are paid in shares. Orcel also has billions of Euros in cash that is above the targeted capital reserve. Orcel plans to return a portion of the cash to shareholders in 2027. UniCredit stated that it would only pursue growth opportunities outside the company "if they met strict strategic and financial criteria". UniCredit predicted that its net interest income would decline "moderately" by 2025 due to the lower interest rates in the euro zone but also to efforts to shrink their Russian business. UniCredit is under pressure from the European Central Bank to accelerate its exit. It said that a "mid-single-digit" fee increase projected for 2025 wouldn't be enough to offset lower rates. Net revenues would exceed 23 billion euros ($24billion) as opposed to 24.2 billion dollars last year. The profit for the period October-December totaled 1.97 billion euros, above a consensus estimate of 1.63 billion euros gathered by companies. This was despite provisions for loan loss that were higher than expected. This compares to 2.8 billion euros last year, when tax credits related to losses in the past were more than double as large. (1 dollar = 0.9706 euro) (Reporting and editing by Alvise Armllini and Kate Mayberry).
BTG Pactual's net income for Q4 rose 15% despite macro-challenges
BTG Pactual, a Brazilian bank, reported a net profit of 3,28 billion reais (568.12 million dollars) for the fourth quarter of 2018. This is up 15% from a year ago on stronger revenues in spite of a worsening economy.
In a LSEG poll, the bottom line was slightly lower than the market expectation of 3.43 billion reais. Analysts noted that the earnings missed should not impact the positive prospects for the coming quarters.
BTG shares rose 1% Monday, while the benchmark Bovespa stock index increased 1.3%.
BTG, like other financial firms, such as Bradesco pointed out that the largest economy in Latin America is facing challenging economic trends. Brazil's activity has slowed and rates have been raised to curb rising consumer prices.
The investment bank stated that "our ability to increase returns in this difficult scenario demonstrates our diverse and "all-weather" business model," citing the "deterioration of the macroeconomic environment over the course the year."
In a filing with the Securities Commission, the lender reported that total revenues for the period had reached a record of 6.73 billion reais. This is a 19% increase on the previous year. The LSEG poll of analysts expected 6,96 billion reais.
BTG reported higher revenues in its five major business units in the fourth quarter, but corporate lending and business banks stood out with an increase of 35%. The main sales and trading unit saw a 10% increase year-on-year.
Analysts at JPMorgan said that they would "add on any weakness" today. The small miss can be explained by sales and trading, as it does not seem to reflect significant gains from the power plants/Eneva transaction. This will likely have a positive impact on future quarters.
Last year, Eneva, a power firm with BTG as its largest shareholder, bought thermoelectric plants from the bank.
BTG's ROAE, a measure of profitability that is based on return on average equity, fell 0.4 percentage points in the third quarter to 23%. The full-year ROAE was 23.1% and met the previously announced outlook that it would exceed 2023's level of 22.7%.
The bank stated that it was confident about its ability to achieve sustained growth and increase ROAE. "We are very optimistic about our business model's future success."
BTG has acquired the brokerage Orama as well as the U.S.-based lender MY Safra, and Julius Baer Brazil's wealth business.
Citi analysts noted that the bank's revenue streams are diverse, as they cited the "already demanding ROAE" guidance.
Citi stated that "despite our expectations of a challenging macro-scenario in 2025, the results have shown a consistent performance with improved fundamentals and growth within resilient business units." ($1 = 5.8086 Reais) (Reporting and Editing by Bernadette, Louise Heavens, David Evans and Gabriel Araujo)
(source: Reuters)