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Australian shares fall as Trump's threat of tariffs dampens sentiment
Australian shares dropped on Tuesday. Heavyweight miners, financial stocks and other sectors led the losses. Global risk sentiment was soured by escalating tensions following U.S. President Donald Trump's threat to impose extra tariffs against Europe. As of 0007 GMT, the?S&P/ASX 200 was down 0.5% to?8,832.9. The benchmark closed Monday 0.3% lower. Overnight, global stocks fell as Trump announced he would add 10% to the tariffs imposed on eight European nations that oppose his takeover Greenland. U.S. stock markets were closed for a public holiday. S&P 500 Eminis futures fell 70.75 points or 1.01% early on Tuesday. Meanwhile, Japan's Nikkei dropped 0.5%. The "Big Four", which comprise a large portion of the benchmark, fell between 0.6% to 0.9%. The mining subindex fell by almost 1%. Iron ore fell to a two-week low following data from China, the largest consumer. BHP shares fell 0.7% as the sector's heavyweight announced that it had accepted lower iron ore prices during annual contract negotiations in China and also flagged a 20 percent increase in costs at its Jansen Potash project in Canada. However, the miner reported record-breaking?first half iron ore production. Rio Tinto, due to announce its fourth quarter production results on Tuesday, has also slipped 0.7%. Market participants will also be watching the December jobs data to determine the Reserve Bank of Australia rate cut trajectory. The broader mining sub-index lost 0.3% of its value as the price of safe-haven gold retreated from record highs. Real estate stocks dropped 0.9% on their way to their steepest single-day drop since earlier this month. Technology stocks, which were bucking the mood of gloom, added 0.7%. Healthcare and consumer discretionary stocks, on the other hand, rose by 0.2% and 0.4% respectively. New Zealand's benchmark S&P/NZX50 index fell by 0.4%, to a low of 13,523.19.
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BHP flags price concessions, reports record HY ore production
BHP Group accepted lower prices during annual contract negotiations. It said this on Tuesday as it reported record production in the first half of steelmaking's key ingredient. The miner has also reported a 20% increase in the costs of its Jansen Potash Project in Canada. BHP?said that it is currently negotiating a contract?terms of annual with the state iron ore buyer, China Mineral Resources -Group (CMRG). BHP stated in a press release that "during negotiations, we continue optimising product placement distribution channels as well as taking?actions? within our operations so to preserve 'operational flexibility and productivity". This has had some impact on the realised price. BHP has separately announced that the estimated total investment for its Jansen Stage 1 project is now $8.4?billion, up from an earlier estimate of between $7 billion and $7.4 billion. The cost increase was attributed to the construction hours and materials used that were not included in earlier estimates. The world's biggest listed miner reported that?iron ore produced from its Western Australia operations was 146.6 metric?tons on a 100 percent basis in the six-month period ended December 31. This is a 1% rise from the same time last year. (Reporting from Rajasik Mukherjee, Bengaluru. Editing by Jamie Freed.)
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UK targets struggling water sector through new regulator
Britain will announce plans on Tuesday to improve England's Water Sector. They promise a "new regulator" with the power to check more on infrastructure and prevent sewage spills?and?supply outages. After years of underinvestment in the water sector, the government declared that the privatised system was broken. Meanwhile, the biggest provider of the country, Thames Water, struggles to survive, having been?loaded with debt. Two incidents in the last six weeks left thousands of homes in south east England with no water for several days. Last July, the creation of a regulator that would "combine existing authorities" was suggested. Environment Minister Emma Reynolds said new legislation planned by the government would ensure improved performance from water companies. Water companies won't be able to hide their poor performance. Customers will receive the service they deserve. Investors will see an?system designed for the future", she said. Thames Water is attempting to get regulatory approval for a plan of rescue led by some of its lenders. However, the heavy fines that it has to pay prevent it from investing in order to improve performance. The government announced a plan to create a "Performance Improvement Regime" that would help "underperforming companies recover quicker". The government did not give any further details. The new regulator will also be able to perform "health checks" of water companies' infrastructure and pipes. (Reporting and editing by Paul Sandle, Sarah Young)
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UK to overhaul its antitrust system to drive growth
Britain wants to improve its competition regime. It has launched a formal consultation to see if it can be made "faster, predictable, and more proportionate". The government announced that it would speed up and simplify the anti-trust investigations, "working closely" with CMA (competition regulatory body) while maintaining its independence. It added that the consultation proposed changes to the way the CMA makes merger decisions and market investigations. This would ensure market remedies were regularly reviewed and businesses could be more certain about whether they will face merger controls. The CMA's decision-making independence will not be affected by these proposals, it was added. The CMA announced on Monday that they would review their historical interventions in order to determine if any of them were still needed to reduce the burden?of compliance. They identified 33 market'remedies' - 60 percent of all those already in place – that might no longer be necessary. The government has also announced that the state-owned bank for development will invest in Kraken Technologies 25 million pounds ($34million) as its largest direct investment, supporting the AI energy software company ahead of an eventual London listing. The government announced that the investment in Kraken, valued at $8.45billion after its spinoff from UK-based Octopus last year, follows reforms made to the British Business Bank mandate, allowing them to take larger, more risky stakes in important scale-ups. Peter Kyle, the business minister, said that Britain's most promising businesses have been looking abroad for support to help them grow. "We are cutting red tape and backing innovators who can really 'firepower'. According to a statement, The BBB, 'owned by the Government's Business Department but operatingly independent', will invest separately 50 million pounds in Epidarex Capital and IQ Capital. Kraken, a company that provides energy software to utilities, energy groups, and companies such as EDF, National Grid U.S., and Tokyo Gas, has 70,000,000 global customers. It "may list in London", the government said, following its demerger.
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The Russian budget deficit in 2025 was 2.6% of the GDP, which is the highest level since 2020
The Finance Ministry announced on Monday that Russia had a budgetary deficit of 5.6 trillion roubles, or 2.6% of GDP, by 2025. This is the largest deficit in terms of percentage of GDP since 2020 and in roubles since 2006. In 2024, Russia's fiscal deficit was equal to 1.7% of its GDP. The?government increased the deficit target in 2025 from the initial?1.2 trillion Rubbles or 0.5% GDP due to the shrinking energy revenue and a strong Rouble. Budget revenues were 37.28 trillion rubles, down 7.5% on the original target. This was due to the 24% drop in oil and gas revenue, which reached its lowest level since 2020 despite the corporate profit and income tax increases. Budget spending, at 42.93 trillion rubles, was up 6.8% from 2024, and 3.5% more than the original?budget plan. Analysts doubt that the government will be able to meet its target, despite the fact that the government has raised the value added tax in order to keep the deficit this year at 1.6% of GDP.
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Italian fashion great Valentino dead at 93
His foundation announced that Valentino Garavani, the Italian designer of fashion, died on Monday. Valentino, who is usually only known by his first name, was 93 years old and had Retired in 2008 Valentino, the founder of his eponymous label, was a pioneer in haute couture, who built a successful business empire, and also introduced to fashion a new color, the so-called "Valentino Red". The foundation posted on Instagram that "Valentino passed away today in a?his Roman home, surrounded by his loved ones." It added that the funeral would take place at 11am (1000 GMT) on Friday in Rome. Valentino, along with Giorgio Armani, Karl Lagerfeld and other great designers of an era when fashion was not a globalized industry dominated by marketing executives and accountants but rather a highly commercialized one. Lagerfeld The year 2019 has seen the death of many people. Armani Died in September. (Written by Alvise Armillini, edited by Gavin Jones).
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Ghana's mining reforms could choke off investment, warns industry body
Ghana's main mining industry group said that changes in the country's tax and royalties terms could deter investment, and slow?output. Last week, it was reported that Africa's largest gold producer planned to cancel long-term mining investments stability agreements and double royalty payments under sweeping reforms. These changes will result in the termination of the?stability agreement with Newmont, AngloGold Ashanti, and Gold Fields. The mining regulator stated that the change was intended to increase state revenue and crackdown on companies abusing their licenses. The draft bill, which is expected to be presented to the parliament in March, proposes a royalty rate of 9%, rising to 12% when gold reaches $4,500 an ounce or more, about double the current range of 3% to 5%. Fear of Stalemated Projects, Lost Jobs In a statement released on Monday, the Chamber of Mines - which represents the 'big mining companies' - said that they supported the principle of a sliding scale royalty system, which would allow the government to earn more when gold prices are higher. It warned, however, that the current proposal could push Ghana up the global effective taxes curve and potentially cause projects to be halted or jobs to be lost. "We understand why a sliding scale is used, but it must be structured in a way that the government can secure sustainable revenues?while industry continues to grow and reinvest," said Chief Executive Kenneth Ashigbey. The current proposal fails to strike this balance. The chamber did not offer a "counterproposal". The Minerals Commission and the Lands and Natural Resources Ministry of Ghana did not respond immediately to comments. The chamber of commerce said that Ghana's large scale miners pay a 3% growth levy and a flat 3-5% royalty rate. Both are levied based on gross revenue, not profit, and include a 35% corporation income tax, an 8% dividends tax and a 10% state-free carried interest. It said that stability and development agreements need to be improved, but not repealed outright. The chamber welcomed the ongoing consultations between Ghana's Lands and Natural Resources Minister and stressed that a competitive, predictable fiscal regime is essential to sustaining investment. Maxwell Akalaare Adombila, Robbie Corey Boulet and Susan Fenton edited the report.
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Gold and silver record highs amid Greenland dispute
Gold and silver reached record highs on Monday as investors fled to safety following the warnings from U.S. president Donald Trump about extra tariffs being imposed on certain European countries over a dispute regarding Greenland. By 12:05 pm, spot gold had risen 1.7% to $4672.49 per ounce. After reaching a record high of $4,689.39, ET (1705 GMT) was reached. U.S. Gold Futures for February Delivery increased 1.8% to $4677.70 per ounce. Trump threatened several European Allies on Saturday with an escalating series of tariffs unless the U.S. was allowed to "buy Greenland", intensifying a dispute about Denmark's vast Arctic Island. "When institutional or policy risks resurface the markets tend to'react quickly by reallocating towards safe-haven investments, with gold emerging once again as the preferred option," said XS.com senior analyst Linh Tran. Dollar fell after Trump's latest threats to raise tariffs prompted investors to seek out safe-haven currencies like gold, yen (Japan) and Swiss Franc. This was part of a broader risk-averse movement across all markets. Gold is more likely to do well in times of geopolitical or economic uncertainty and when interest rates are low. It has gained over 64% since 2025, and more than 8% in the first half of this year. Michelle Bowman, Vice Chair of the Federal Reserve for Supervision, said that the U.S. Central Bank should be prepared to lower interest rates if necessary due to a fragile and potentially weakening job market. The markets expect the Fed will hold rates at its meeting on January 27-28, but they are pricing in two 25 basis point rate cuts this year. Spot silver, which had previously reached a record-high of $94.61, has risen 5% to $94.41 per ounce. Since the beginning of the year, silver has increased by more than 32%. Citi Research analysts said they remain "tactically bullish" on precious metals. They set price targets for gold of $5,000 per ounce and silver at $100 per ounce in the next three month, citing the geopolitical tensions likely to continue to be high. Palladium increased 1.1%, to $1,819.99, while spot platinum rose 1.5%, to $2,362.65 per ounce.
Wall Street futures are down after a tech sell-off, while European stocks have hit a one-month high.
European stocks were up in the early hours of Friday's trading, on course for a third weekly gain. The Fed's recent interest rate cut boosted sentiment. However, Wall Street futures indicated some lingering caution following the previous session's tech stock sell-off. Nasdaq dropped on Thursday, after cloud computing firm Oracle announced massive spending and poor forecasts. This fueled fears that big AI bets were paying off. Tech stocks fell. As the S&P 500 & Dow hit new highs, it had a minimal impact on risk appetite. Wall Street futures fell during Asian trading as tech concerns remained, and struggled to gain ground during European trading. In a split decision of 9-3, the U.S. Federal Reserve lowered interest rates on Wednesday by 25 basis points. This has left traders hopeful about further cuts in 2026.
The pan-European STOXX 600 index was up 0.3% at 1038 GMT. It had reached its highest level in a whole month. The FTSE 100 rose 0.2%. Germany's DAX gained 0.3%. France's CAC40 grew 0.7%. The MSCI World Equity Index rose 0.2%.
S&P futures are down 0.2% while Nasdaq Futures are down 0.5%.
Ed?Hutchings is the head of Aviva's developed market rates desk. He said that traders will likely avoid big moves this Friday, as they prepare for the rate decisions of the Bank of England and the European Central Bank next week.
He added, "It is a moment of reflection after the Fed." Next Thursday, the BoE will likely cut interest rates. The ECB is also expected to hold rates steady at its meeting on 'Thursday', although traders are suddenly speculating about a possible rate hike in 2026. After strong signals by Governor Kazuo ueda, the BoJ is expected to raise rates when it meets on Thursday.
DOLLAR DOWN; POUND FALLS Slightly on UK DATA
The dollar index was up 0.1% for the day, at 98.462. Still, it was within reach of the previous session's low, which was the lowest in nearly eight weeks, and on track for a third weekly decline in a row, having been hurt by the Fed's less-hawkish-than-expected outlook on rates, as well as U.S. jobless claims data, which showed ?that the number of Americans filing new applications for unemployment benefits increased by the most in nearly 4-1/2 years last week. Sterling was also down by 0.1%, at $1.3369. The euro fell 0.1% to $1.1726 and the euro 0.1% to $1.1726. This was a slight decline after the data showed that Britain's GDP shrank 0.1% during the three-month period ending December. Germany's government bonds yields increased, and are on course for their biggest weekly increase since March. This is because traders began to price in a rate rise in the euro zone following comments made by influential ECB policymaker Isabel Schnabel in earlier this week. The 10-year Germany Government Bond yield was 2.856%.
OIL RISE, COPPER HITS RECORD HIGH
The oil prices initially rose, boosted by concerns over disruptions in Venezuelan supply as the U.S. prepares?more ships carrying Venezuelan crude. However, these gains were quickly erased and they are now on course for a weekly drop as attention remains focused on a possible Russia/Ukraine Peace Deal. Ukraine's government bond prices rose after it sent a revised proposal to the United States for ending its war with Russia. Investors also watch the progress of European Union's proposals to use frozen Russian asset, which many are held by Brussels-based Euroclear. In a virtual session held on Thursday, the leaders of the "Coalition of the Willing", a group of nations that includes many European countries, discussed the progress made. The Russian central bank declared on Friday that these plans are illegal.
China, the world's largest copper consumer, has promised to continue a fiscal policy that is "proactive" next year. Gold rose around 1% in value on the day to $4,325.59. (Reporting and editing by Elizabeth Howcroft, Toby Chopra).
(source: Reuters)