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Investors wary about tensions between Russia and Ukraine as oil prices drop a little
The oil prices fell a bit early Tuesday morning after they had risen more than 2% the previous day. This was partly due to spillovers from a drop in precious metals, while escalating tensions between Russia and Ukraine left markets dealing with supply disruption concerns. Brent crude futures expiring?on? Tuesday were down 21 cents or 0.3% at $61.73 per barrel by 0150 GMT. The March contract, which is more active, was down 19 cents (0.3%) at $61.30. U.S. West Texas Intermediate Crude fell 20 cents or 0.3% to $57.88. Both contracts closed more than 2% above the previous session, after Moscow accused Kyiv that it was targeting the residence of President Vladimir Putin. This stoked fears of supply disruptions. Ed Meir, Marex analyst, said: "The selling that you see 'now is likely some spillover weakness caused by the significant correction in precious metals which is bound to impact pretty well every other commodity." Investors booked profits following recent rallies and precious metals fell sharply. Silver?and platinum were down from records highs. Meir stated that "the markets sense a difficult deal." Kyiv dismissed as baseless Russia’s accusation that they were targeting Putin, and said this was intended to undermine peace talks. Geopolitical tensions are likely to escalate, causing oil prices to rise. The Middle East was also a concern for traders after President Donald Trump stated that the United States would support another major attack on Iran if it resumed its nuclear or ballistic missile programs. Trump warned Hamas that it would suffer severe consequences if they did not disarm. He also said he wanted the second phase to begin of the ceasefire agreement between Israel and Hamas, which was reached in October following?two years' fighting in Gaza. Saudi Arabia is the largest oil exporter in the world and it's expected to cut the price of its flagship Arab Light?crude to Asian buyers by a third consecutive month. This will mirror the declines on the spot market because of ample supplies. Meir said that the price direction will likely be lower in Q1 2026 due to a growing glut of oil on the market. (Reporting from Anushree MUkerjee in Bengaluru Editing done by Shri Navaratnam
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Octopus Energy, a British company, spins out Kraken for $8.65 billion.
Octopus energy, a British company, announced on Monday that it would spin off its technology arm Kraken as an independent 'company' valued at $8.65 Billion. This follows a funding round led by U.S.-based investment firm D1 Capital Partners. Kraken provides energy software to major utilities, such as EDF, National Grid U.S., and Tokyo Gas. Kraken will sell equity worth about $1 billion to new and existing investors. Investors led by Octopus will inject $320 million more into Octopus Energy. In a press release, the largest household electricity and gas supplier in Britain, Durable Capital Partners, and Ontario Teachers' Pension Plan are among those who invested in this round. The investment paves the way for Kraken to officially demerge from Octopus Energy. Octopus Energy will retain a 13,7% stake in the company. Kraken's AI-powered operating system is licensed to utilities around the world and has contracts to service more than 70,000,000 accounts. In September, the company reported a contracted revenue of over $500 million. Origin Energy, a company based in Australia, said that it would invest around $140 million into Kraken's fund-raising and retain a 22.7% stake after the transaction. Origin has also agreed to waive the?exclusivity of Kraken's service in Australia for an extra 1.5% equity stake.
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TSX falls as metal prices fall hurt mining shares
Canada's main index of stocks closed lower on Monday, as the precious metals rally?paused. This weighed heavily on the mining stocks and started the final?week?of the year with a somber tone. The S&P/TSX 'index?closed 0.32% down at 31,896.59 point. The benchmark was expected to gain about 2% this December, which would be its eighth consecutive month of gains, a streak that has not been seen since 2014. Materials shares fell by 2.88%, while gold shares dropped 4.02%. Silver prices fell 8.3% and gold prices dropped 4.3%. Both were down on the back of investors booking profits due to perceptions that geopolitical tensions are easing, which led them to reduce safe-haven purchases. The TSX index has seen a strong performance this year. It is up 29%, its highest level since 2009. This year has been phenomenal. This was really due to two factors. Mining stocks had a fantastic year. Gold had a great year, and silver was even better. The Canadian bank stocks also contributed to the TSX, said Alfred Lee. Lee stated that he wouldn't be shocked if there was a short-term pullback next year. Kinross Gold shares fell 3.6%. Agnico Eagle shares fell?5.3%, and Barrick Mining shares fell 2.8%. Endeavour Silver closed down 1.9%, while Silvercorp Metals dropped 3.4%. Energy shares, which are a major component of the energy sector, gained 1.01% as oil prices rose over 2%, and investors began to weigh the potential disruptions in oil supplies due to the Ukrainian peace talks with the possible rise in oil prices. During a quiet week of data, market participants are waiting for the release on Tuesday of minutes from the U.S. Federal Reserve.
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Management reports that the external power line at Zaporizhzhia Nuclear Plant has been restored.
The Zaporizhzhia Nuclear Power Station in Ukraine, which is owned by Russia, has a restored external power connection after repairs were completed. This was announced on Monday by the Russian management of the plant. The statement stated that the line had been taken out of service by "fire from Ukrainian armed forces". The International Atomic Energy Agency, the U.N.'s nuclear watchdog was present to monitor the repairs. The International Atomic Energy Agency said that the situation was under control at the plant, and radiation levels were normal. Two lines connect the station to the grid. The second line was still in operation during the repairs. The plant relied on diesel generators for 30 days in September and October. This was until a damaged line could be reconnected during a local ceasefire that was arranged with IAEA help. In the first weeks after Moscow invaded Ukraine, Russian forces took control of Europe's biggest nuclear power plant. Both sides accuse the other of actions that endanger safety in Ukraine. The plant does not produce electricity, but it relies on outside power to maintain nuclear fuel at a cool temperature and prevent a meltdown. In the talks to end the four-year conflict between Moscow and Kyiv, the future of the plant operations has been a sticking point. The plant is run by a unit owned by Russia's Rosatom nuclear corporation. Volodymyr Zelenskiy, the Ukrainian president, said that the U.S. proposed a joint trilateral operation with an American manager in December. Reporting by Chizu nomiyama; editing by Chizu Nomiyama
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Silver falls from its $80 peak, while gold mellows due to profit-taking
Silver fell after reaching a record high of $80 per ounce on Monday, while gold dropped from near-historic levels as investors booked profits. A market perception that geopolitical risk had decreased also curbed the safe haven buying. Gold spot was down 1.7% to $4,455.35 per ounce at 1321 GMT. It had hit a record of $4,549.71 an ounce on Friday. U.S. Gold Futures for February Delivery lost 1.7% and reached $4,474.80. Spot silver fell?5.1%, to $75.15 per ounce. This is a retreat from the record high of $83.62 reached earlier in this session. Spot 'platinum' fell 6.9%, to $2281.15, after reaching a record high of $2478.50, while palladium plummeted 11.9%, to $1,694.75 per ounce. Ricardo Evangelista, an analyst at ActivTrades, said that the decline in gold prices this morning, following record highs, was primarily due to traders reinvesting profits before year-end. "Tentative optimism on the part of the U.S. administration regarding progress in the Ukraine peace talks is also a mild blow." Donald Trump, the U.S. president, said that on Sunday he and Ukrainian leader Volodymyr Zelenskiy are "getting closer, perhaps very close" to a deal to end Ukraine's war. Bullion prices have risen by 72% in the past year. This is due to factors like a softer U.S.?monetary policy, a weaker dollar, geopolitical tensions, and robust central bank purchasing. Silver has outperformed gold this year by 181%, mainly due to its designation as an important mineral in the United States, shortages of supplies and a growing industrial and investor appetite. The release of the Fed minutes from the December meeting, which is due on Tuesday, will provide some clues about the future interest rate outlook. The market is pricing in at least two rate cuts next year. When interest rates are low, non-yielding investments tend to perform well. UBS analysts wrote in a report that "gold prices are trading at an elevated premium and downside risks may emerge if the Federal Reserve makes a surprise pivot to the hawkish side and/or if large ETF withdrawals affect the market." (Reporting and editing by Barbara Lewis, David Goodman and Pablo Sinha from Bengaluru)
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Bahrain implements new fiscal reforms in order to boost public finances
Bahrain announced several fiscal measures on Monday. These included raising fuel prices, increasing tariffs on water and electricity, and increasing dividends from government-owned companies, as well as other fees and tax. Bahrain, one of the Gulf's smaller producers of oil, has increased its efforts to diversify away from hydrocarbons and into other areas, such as tourism and financial services. However, lower?oil price have had a negative impact on public finances and growth. Bahrain plans to?raise natural gas prices and reduce administrative government expenditure by 20%. It will also introduce a new corporate income tax law for local companies. The statement did not provide any further information or details about when the new measures would be implemented. S&P Global Ratings Downgraded Bahrain sovereign credit rating In November, the rating was downgraded to "B" (from "B+") due to an increase in government debt. This increased pressure on government interest costs. The report projected an increased fiscal?deficit in 2025 of 7.6% of the GDP, up from its previous estimate of 7.1%. The government has raised $5 billion from global debt markets This year, investors will be able to take advantage of the healthy appetite for Islamic bonds or sukuk. The parliamentary speaker stated in a separate statement dated 28 December that Bahrain's government, parliament and the Council of Representatives held several meetings to discuss measures to support state finances. He noted some differences regarding the application of electricity and water services. Reporting by Mahal Dahan and Nayera Addallah, Writing by Rachna uppal; Editing and proofreading by Alison Williams & Chizu Nomiyama
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Upgrade of Zimbabwe thermal plant to 400 Megawatts will add to grid
Zimbabwe will upgrade its Hwange coal fired power?plant for $455 mln, adding 400 megawatts, or a 'fifth' of the current country electricity demand. Southern Africa has signed a concession agreement with Jindal Steel's Africa-focused unit for a 15-year period to refurbish some of its older units at the?thermal plant. Cletus Nyachowe, acting ZESA CEO, said that the deal was signed and finalised in December after it was approved by Zimbabwe’s cabinet on September 17. Nyachowe stated that the 15-year contract with Jindal would lead to increased power generation. This will?add 400 MW to our production within 48 months." He added that "Rehabilitation works are set to begin in the first quarter 2026." Zimbabwe is only able to meet half its electricity demand of 2,000 MW and suffers from?prolonged power cuts because its power plants are reducing in capacity. In 2023, two units, adding 600 MW, were commissioned at the Hwange plant. The older units, built in the 1980s, are only operating at a third of their full capacity because of?breakdowns. In 2018, the Kariba hydropower plant, built in 1960, underwent a 300-MW upgrade, boosting its capacity from 750 MW to 1,050MW. Its generation capacity also decreased in recent years due to climate-change-induced droughts.
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Silver falls from its $80 peak, while gold's price softens due to profit-taking
Silver fell after reaching a record high of $80 per ounce on Monday, while gold dropped from near-historic levels as investors booked profits. A market perception that geopolitical risk had decreased also curbed the safe haven buying. Gold spot was down 1.9% to $4,448.23 per ounce at 1148 GMT. It had hit a record of $4,549.71 an ounce on Friday. U.S. Gold Futures for February Delivery lost 1.9% at $4,467.90. Spot silver fell?5.4%, to $74.90 per ounce. This is a retreat from the record high of $83.62 reached earlier in this session. Spot 'platinum' fell 6.5%, to $2,291 per ounce, after reaching a record high of $2,478.50, while palladium dropped 13%, to $1,674.25 per ounce. Ricardo Evangelista, an analyst at ActivTrades, said that the decline in gold prices this morning, following record highs, was primarily due to traders reinvesting profits before year-end. "Tentative optimism on the part of the U.S. administration regarding progress in?Ukraine's peace talks is also a mild blow." Donald Trump, the U.S. president, said that on Sunday he and Ukrainian leader Volodymyr Zelenskiy are "getting closer, perhaps very close" to a deal to end Ukraine's war. Bullion prices have risen by 72% in the last year. This is due to factors like a softer U.S.?monetary policy, a weaker dollar, geopolitical tensions, and robust central bank purchasing. Silver has outperformed gold this year by 181%, mainly due to its designation as an important mineral in the United States, shortages of supplies and a growing industrial and investor appetite. The release of the Fed minutes from the December meeting, which is due on Tuesday, will provide some clues about the future interest rate outlook. The market is pricing in at least two rate cuts next year. When interest rates are low, non-yielding investments tend to perform well. UBS analysts stated in a report that "gold prices are trading at an elevated premium and downside risks may emerge if the Federal Reserve makes a surprise pivot to the hawkish side and/or if large ETF withdrawals affect the market." Reporting by Pablo Sinha, Bengaluru Editing Barbara Lewis and David Goodman
Asian stocks fall by tech and gold and silver cool
Asian shares fell on Tuesday, following Wall Street's tech slump, while gold and silver steadied, after a sharp drop from record highs tempered the incredible rise of precious metals.
The oil prices were mostly unchanged overnight as Russia claimed that Ukraine had attacked?President?Vladimir Putin?s residence. Although Moscow did not provide any evidence to support its claims, the move represents a major setback in U.S. efforts at brokering a peace agreement.
China also added to the global geopolitical tensions by launching 10 hours of live firing exercises around Taiwan on February 2.
In a week with fewer holidays, there is little liquidity across the majority of markets. This leads to volatile and sharp price swings.
Silver was the big mover over night, with a drop of 8.7%, the largest one-day decline since August 2020. This cleared some froth from a parabolic rally that looked increasingly detached from reality.
Metal prices rose 1.7% to $73.46 an ounce on Tuesday, after reaching as high as $83.00 the day before. It is still up an incredible 150% for the entire year.
Gold and other precious metals were also affected by the sharp turn around. The yellow metal fell 4.4% overnight, but last was up 0.6% to $4,356 an ounce.
Tony Sycamore of IG Sydney said that the increase in the price of silver at the opening on Monday was probably due to stop losses, price movement and 'panic buying, as well as Chicago Mercantile Exchange increasing margin requirements.
Sycamore said, "This is a bubble that will last for generations." "I'm not saying that the bubble burst over night, but...?if you're seeing a sell-off, it will temper some of the excitement in these markets during the next session. For me, this is a much-needed cooling-off."
The MSCI broadest Asia-Pacific share index outside Japan, which includes Japan, fell 0.1% on Tuesday but is set to achieve a gain of 26.7% annually, its best performance in 2017.
Nikkei 225, the Japanese stock market index, fell 0.2% in value but rose 26% on a year-to-date basis.
China's blue-chip shares fell 0.3% and Taiwanese stocks lost 0.7% after Beijing's live firing exercises around Taiwan.
Overnight, Wall Street ended lower as heavyweight technology shares retreated after last week's gains. U.S. stock prices are still on track to finish 2025 at record highs after a turbulent year marked by tariff wars and central bank policy, as well as simmering geopolitical conflicts.
U.S. stock futures in Asia were not much different. Euro STOXX futures and FTSE Futures were both flat.
AUSTRALIAN DOLLAR FALLS, YEN FIRMS
The U.S. Dollar was stable on the currency market ahead of the Federal Reserve minutes from the December meeting, which are expected to show a central bank divided and unsure about its policy direction for next year. The dollar is on track to have its biggest annual drop in eight years, a decline of almost 10%.
The dollar held steady at 156?yen after losing 0.3% over night, marking the fifth drop in six sessions. The yen has moved away from the range of 158-160 that could prompt intervention by Japanese authorities.
The Australian dollar was significantly weaker due to the fall in commodity prices. The Australian?dollar was stable at $0.6698 last, after regressing from its 2025 high of $0.6727 reached just on Monday.
Treasury yields fell a bit on Tuesday. The yield on two-year bonds fell by 1 basis point, to 3.4524%. This is the fourth consecutive session that yields have fallen. Meanwhile, yields on 10-year bonds also decreased by 1 bp, to 4.1082%.
The oil prices fell a bit on Tuesday, after rising by over 2% the night before. Brent crude futures fell 0.5% to $61.63 per barrel after a 2.1% increase on Monday.
(source: Reuters)