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SEBI claims Adani companies paid 15 million rupees as settlement for disclosure violations
India's markets regulator announced on Tuesday that four Adani companies, including Adani Enterprises, and a former group firm, had paid a total of?15 million rupees (about $157,966.31) in settlement proceedings for alleged disclosure violations. In its order, the Securities and Exchange Board of India said that Adani Enterprises had failed to disclose an alleged related-party transaction in its annual report of the year ending?March 2013 AWL Agri Business Ltd, (formerly 'Adani Wilmar Ltd) and other companies were found to be in possession of audit or review reports signed by firms who did not hold a valid peer review certificate. SEBI sent these companies show-cause letters in 2024, detailing its allegations. The companies settled without admitting guilt or denying it. The regulator investigated a total of 24 cases after Hindenburg Research, a short-seller, claimed in January 2023 that Gautam Adani's group had manipulated its?share price by using tax havens. Adani's spokesperson?did not immediately respond? to a request for comment? on whether the settlement resolves all litigation. The group has denied these claims in the past.
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India's Lohum wants to buy nickel mines from Indonesia and the Philippines
Lohum, an Indian producer of critical minerals, is looking to purchase nickel mines in Indonesia or the Philippines to meet a growing demand for battery minerals. India wants to maintain its rapid economic development by increasing the use of renewable energy, electric vehicles, and reducing its dependence on Chinese suppliers. It also wants to develop its own resources of critical raw materials such as nickel for the transition to green technologies. Lohum's CEO Rajat Verma stated that the company aims to increase the?nickel-production capacity to 10,000 tons of nickel per year in the next 18 month. The plant, located in Gujarat state, produces about 1,000 tons of nickel per year from recycled materials. Talking to Potential Investors Verma stated that the company aimed to raise 10 billion rupees ($105 millions) in equity and up to 20 billion rupees (in debt) over the next 12-18 months to fund their overall plans. He declined to identify the potential investors. He said that depending on the possible acquisitions, the "increased capacity" of nickel could even be greater. He said that if he could get access to an excellent mine, he would consider expanding the capacity. Lohum also plans to invest $100 Million in Zimbabwe to mine lithium, a critical mineral, and has acquired 10 mining blocks estimated to contain 30 to 40 millions tons of ore. Lohum announced its plans earlier this month to become the first Indian company to produce lithium using an overseas asset. It said it would process ore in Zimbabwe into lithium sulphate before shipping it back to India for refinement into higher-value lithium carbonate needed by battery makers. Verma stated that Lohum is also setting up a plant capable of producing cathode-active material at a rate of 5,000 metric tons per year. The plant is scheduled to open in March, and will require lithium and nickel. Verma added that Lohum, in partnership the local government in Sharjah in the United Arab Emirates is developing a battery recycling plant for lithium-ion batteries. The facility is expected to become operational in early 2019. China's dominance in supply chains can be seen?particularly clearly? with rare earths. These are widely distributed around the world but difficult to refine commercially. Verma stated that Lohum also searches for rare earths throughout Southeast Asia. A rare earth magnet factory is being built in Uttar Pradesh with a capacity of 1,200 tons per year.
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Stocks rise on AI optimism, oil at $100
The global shares rose on Tuesday due to a renewed optimism about AI. Meanwhile, the oil price fell to its lowest level in two weeks as the Middle East supply began to improve. A senior Iranian official told investors on Tuesday that Tehran could reopen the Strait of Hormuz in seven days, if the United States eased military pressure and lifted its blockade of Iranian ports. Three sources informed on the subject said that Saudi Arabia had restarted its East-West Pipeline, and exports could resume from the Red Sea Port of Yanbu on Tuesday. Oil dropped as much as 3 percent before modestly recovering to $97.6 per barrel. The stock market was already in a good place thanks to the viral success of Meta Platforms’ Muse AI assistant, launched two weeks ago. This sent the company’s stock soaring Monday. It also rekindled enthusiasm for the technology sector following the grim warnings issued by AI chief executives one week earlier. Semiconductors ranked among the top gainers in Europe. The STOXX 600 index was up 0.5% on the day, continuing the previous days 1% rise. Meta shares rose by over 11% at the close of Monday, their biggest one-day gain since April 2024. This helped propel a number of AI-related stocks such as AMD which reached the $1 trillion milestone, while Intel, Arm Holdings and AMD each jumped 12.2%, and 17%, respectively. Kathleen Brooks is the research director for XTB. She said: "This shows that the demand for expensive AI tools are robust and worth hundreds of billions in capex expenditures by hyperscalers." "If Muse is widely adopted, it will increase demand for other AI tools. This could help the AI sector recover after a difficult few months." Nasdaq Futures rose 0.1%, indicating a slight rise for the index at the opening, after it hit record highs Monday. S&P Futures also rose 0.1%. TRUMP-XI METING IS AWAITED Investors are watching for signs that US President Donald Trump can stop a further deterioration of relations with Chinese President Xi Jinping. Xi arrived in Washington for the first in over a decade on Wednesday, fueling optimism that a deal to extend a truce in trade between the two nations will be extended. There could also be a potential collaboration in artificial intelligence. The general tone is positive but there is still no agreement, according to?Jim Reid, a Deutsche Bank strategist. RATE INCREASES ARE ON THE WAY The global bond yields have reversed a previous rise and fallen in line with oil prices. Investors have priced in another round of rate hikes by major central banks that could limit the fall in debt yields. The 10-year Treasury yields in the US fell 3 basis points in one day, to 4.93%. This brought the yields further below the threshold of 5%, and weakened the support for the dollar. It was pushed below a seven week high against a basket currency earlier in the morning. The dollar slid?lower against the yen, which was down 0.15% to 157.14. This is a drop from a 3-week high. Last week, the Bank of Japan increased rates to a record high. However, two dissenting voices and a lack of explicit hawkish guidance disappointed investors. This left the yen vulnerably vulnerable and traders on guard for any signs of official intervention. Matthew Ryan, Ebury's head of market strategy, said that "FX interventions remain a blunt tool for proping up currencies. Without a strong monetary response, it will be hard for Japanese authorities, to rein in the saleoff in the Japanese yen." The Federal Reserve on the other hand, increased rates last week, and warned that its fight against inflation is not over.
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Kremlin welcomes the fact that Germany's AfD is interested in dialogue with Russia
The Kremlin said on Tuesday that it was pleased with the fact that Germany's AfD party wants to dialogue with Moscow. It contrasted this with what they called the confrontational attitude of Chancellor Friedrich Merz. On Sunday, the Alternative for Germany (AfD), a group that opposes immigration, won a state-level election in Mecklenburg/Western Pomerania. This builds on their victory a few weeks ago in Saxony/Anhalt and intensifies?political pression on Merz. Last week, it was reported that the AfD and Vladimir Putin's economic envoy had begun preparing to meet in order to discuss restarting Russian gas supplies to Germany. Dmitry Peskov, the Kremlin's spokesperson, told reporters that he did not have any information on reported attempts by AfD to contact Moscow. "However, this is a political force in Germany that's?popular and?showing an upward trend, while also talking about the necessity of establishing relations with our country," he said. Peskov stated that Merz on the other hand had only made confrontational remarks against Russia.
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The dollar is firm, but Chinese demand for copper drives up prices.
The copper price?extended its gains for a six-session session on Tuesday, as the?top metals consumers China stocked up before holidays. However, a'stronger dollar' dampened the increase. Benchmark 'three-month' copper on the London Metal Exchange rose 0.7% to $14,770 per metric ton at 0930 GMT after gaining 1% the previous session. LME copper prices have risen 18% this year, mainly due to large metal flows to the US on speculation regarding tariffs on refined Copper. Sources told US officials that they were worried that tariffs could increase costs for manufacturers. EwaManthey, commodities analyst at ING, said that tightening physical market conditions in China are supporting copper. "Falling inventory, seasonal restocking demands and constrained availability are?offsetting stronger dollar and tariff uncertainties." The most traded copper contract at the?Shanghai Futures Exchange increased 1.2% to 111,320 Yuan ($16.616) per ton. This was also aided by renewed speculative interest. Sandeep Daga of Metal Intelligence Centre said that Chinese consumers are purchasing ahead of the holidays and shutdowns of smelters. China's next holidays are from September 25-27 and October 1-7. Copper stocks in warehouses are monitored by?SHFE Since early June, the market has fallen by 70%. Robert Montefusco, broker at Sucden, believes that prices may be nearing a ceiling. "I believe it's a little bit overinflated here." "I think it's a little bit inflated here," Montefusco said. Traders were waiting for the meeting between US president?Donald Trump, and Chinese president Xi Jinping to take place later this week. They wanted to get a sense of what trade ties are like and how global economic?outlook is. Other metals include LME aluminium, which fell 0.2%, to $3.261 per ton. Zinc grew 0.5%, to $3.944; lead rose 0.2%, to $1.940; nickel climbed 1.3%, to $16,525; and tin slipped 0.2%, to $54,030.
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Hurricane Polo reaches category 5 near Mexico's Pacific Coast
The US National Hurricane Center reported on Tuesday that Hurricane Polo has a category 5 rating as it continues?to intensify and'sweeps towards the Mexican Pacific?coast. The advisory said that despite its proximity to the coast and the heavy rainfall it will bring, Polo should move slowly away from the coast in the next few days. The category 4 hurricane, with sustained winds up to 150 mph (240km/h), is located 215 miles (345km) south of Zihuatanejo and 345 miles south-southeast from the port city of Manzanillo. NHC warned that heavy rains in the coastal states of Guerrero & Michoacan could cause life-threatening flooding & mudslides. Authorities in Mexico warned of heavy rains forecast for the western and southern regions of the country. This could cause rivers to overflow. The National Civil Protection Agency asked residents to avoid walking or driving on flooded roads and to remove furniture and beach equipment to avoid wind-related hazards. The agency said on X that "if you live in an area prone to flooding, identify higher ground and best routes to get there." According to NHC, a rapid intensification of the storm is still expected. Polo could reach category 5 on the Saffir-Simpson Scale later Tuesday.
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France asks EU to delay methane reporting due to tight energy supply
Emmanuel Macron, the French president, wrote to the European Commission to urge it to delay new rules on methane reporting for oil and 'gas importers. He argued that they could create legal risks if energy supplies are tightening. Les Echos, a French newspaper, first reported on Macron's September 18 letter to Commission president Ursula von der Leyen. The new regulations, which will come into force on 'January 1', will require monitoring and verifying methane emission for fuel deliveries in the?Block. They aim to reduce leaks of this powerful greenhouse gas, and to impose a?fine if companies violate the regulation. Macron asked for the regulation to be delayed an additional year, until? January 1, 2028. Methane is second in importance to global warming after?carbon dioxide. Germany, Europe's largest gas market, has already called for the delay of the regulations. The European Commission responded by instructing EU member states in July to waive financial penalties related to the regulation until the end 2029. Macron also asked the EU in his letter to "temporarily relax fuel quality rules" so that European production of diesel and kerosene could increase by up to 20%, as demand for these products increases. Macron wrote in his letter that French refiners believe that loosening some specifications would increase fuel production from 5% to 20 percent, depending on refinery. The French president proposed a relaxation of the blending limits for biofuels, such as allowing distributors replace B7 diesel (which contains up to 7 % biodiesel) with B10 diesel, which has up to 10 %.
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Tech stocks surge on renewed AI fever, while oil and bond yields rise.
The technology shares were boosted by a renewed optimism about AI on Tuesday. However, the broader stock market struggled as oil prices rose?above $100 per barrel and bond yields increased?once again. Meta Platforms' Muse AI Assistant has been a viral hit since its launch two weeks ago. The stock of the company soared on Monday after a sell-off caused by gloomy warnings issued by AI executives a week prior. Semiconductors were one of the few gainers on the STOXX 600 index in Europe, which fell by 0.2% after gaining 1% the previous day. Meta shares jumped more than 11% on Monday, their biggest one-day gain since April 2024. This helped propel a number of AI-related stocks such as AMD which reached the $1 trillion mark. Intel and?Arm Holdings jumped 12,2% and 17% respectively. Kathleen Brooks is the research director at XTB. She said: "This indicates that demand for expensive AI tools are robust and worth hundreds of billions in capex expenditure by the hyperscalers." She said that if Muse is widely adopted, this could increase demand for other AI-based tools. This could help the AI industry recover after a few difficult months. Nasdaq Futures?were down by 0.1%, indicating a slight drop at the opening for the index which reached record highs on Sunday, while S&P Futures were down by 0.1%. TRUMP-XI METING IS AWAITED Investors are watching to see if the two leaders of the largest economies in the world can avoid a further deterioration of relations. Xi arrived in Washington, D.C. on Wednesday - the first time he has been there in over a decade. This is fueling optimism that the trade truce agreement between the two nations will be extended. There could also be a potential for cooperation in artificial intelligence. The general tone is positive but there is still no agreement, according to Jim Reid, a Deutsche Bank strategist. Brent crude futures rose 1.4% to $101.67 per barrel, after falling over 3% on Monday, when they briefly dropped below $100 for the very first time in the past two weeks, based on speculation that Trump could meet Iranian President Masoud Pesehkian at the UN General Assembly next week. Oil futures have still risen about 12% in the past month. The physical market, however, is showing signs of stress. Prices for immediate delivery in the northwest Europe region, for instance, are over $130. This is a nearly 50% increase in September. RATE INCREASES ARE ON THE WAY Investors are pricing in another round of rate increases from major central banks. This helped to underpin the US dollar but drove up global bond yields. The dollar gained the most against the Japanese yen. It rose 0.26% to 157.7. This is near the three-week high. Support for the Japanese currency was fading as the Bank of Japan's rate hikes were expected to be more rapid. Investors were disappointed by the BOJ's decision to raise rates in last week, a move that marked a new high for 31 years. However, two dissenting voices and lacked of explicit hawkish advice left the yen vulnerable. Matthew Ryan, Ebury's head of market strategy, said: "FX interventions remain a blunt tool for proping up currencies. Without a strong monetary policy response, it will be hard for Japanese authorities to stop the selloff of the yen." The Federal Reserve on the other hand, increased rates last week, and warned that its fight against inflation is not over. The 10-year Treasury yields in the US have risen to 4,969%. This is not far from October 2023, when it reached its 16-year-high.
Stocks fall as inflation fears fuelled by Middle East air war cause stock market panic
Investors weighed the impact of U.S.-Israeli strikes against Iran on energy and global economic prices, and the dollar increased on Tuesday.
MSCI's broadest Asia-Pacific index outside Japan dropped 2.9%, extending losses for a second day. The biggest drop was 7.2% in Korean shares as the country returned from its holiday. It was their largest one-day loss since August 2024. Tokyo's Nikkei 225 fell 3.1%, and S&P500 e-minis futures dropped 0.9%.
Rupal Agarwal is Asia Quant Strategist at Bernstein, Singapore. "Economic uncertainty was already high and with the Iran conflict the geopolitical risks are expected to increase too," she said. The last time these two spikes occurred was in 2022, during the Russia-Ukraine crisis. This didn't go well for Asian markets. Wall Street stabilized after a volatile session Monday, which saw the S&P 500 rebound from an initial selloff to finish flat and the Nasdaq composite climb 0.4%. Investors bought the dip in the markets. Donald Trump, the U.S. president, said on Monday that his campaign against?Iran was exceeding expectations. An official of Iran's Revolutionary Guards announced on Monday, with no end in sight to the hostilities, that the Strait of Hormuz was closed to all marine traffic. The?country would fire on any ships trying to pass. The threat was immediately felt, with the cost to hire a supertanker for oil shipping from the Middle East into China reaching a new record of over $400,000 a DAY, according to LSEG 'data.
Brent crude futures rose another 2.3% on Tuesday to $79.50. On the natural gas market, European and Asian benchmark LNG prices soared by about 40% on Monday.
Working through the Risk Scenarios
The surge in energy costs could increase the cost of Asian companies, and impact their profits as well as their stock prices. These stocks have risen sharply this year.
Goldman Sachs analysts wrote in a report that a rise of 20% in Brent oil could result in regional earnings falling by?2%, with large intraregional variations. However, this is dependent on the duration of the conflict. They said that spikes in geopolitical risks tend to have negative effects on the short term, but they dissipate with time. The current increase in geopolitical risks coincides with a regional vulnerability to a corrective action. Energy prices are on the rise, complicating the Federal Reserve's attempts to control inflation. Policymakers have already shown signs of division over the impact artificial intelligence will have on the U.S. Economy. Rubio, the Secretary of State said that the U.S. would take steps to reduce rising energy costs due to the spike in oil prices caused by the conflict with Iran.
ISM manufacturing data, released on Monday, showed that U.S. business activity increased steadily in the month of February. However, a measure of factory gate prices soared to an?almost 3-1/2-years high amid tariffs. This highlighted upside pressure on inflation before even the attacks against Iran.
FedWatch, a tool of the CME Group, shows that Fed funds futures price a 95.4% implied probability that the U.S. Central Bank will maintain rates at the conclusion of its two-day next meeting on 18 March. The odds of the?June rate hold, which were previously less than 50%, increased on Monday, and are now better than a toss of a coin.
Several analysts were optimistic about the impact of the war on the economy, citing limited movements in global markets.
Jahangir Aziz said, "It won't be positive, of course," at a round table for media in Singapore, on Tuesday. He said that any increase in political uncertainty was bad for economies. But right now...we do not really believe that this will?be systemic shock for the global economy." The U.S. Dollar Index, which measures the strength of the greenback against a basket six major counterparts, held near a six-week high at 98.73, as the currency recovered some of its appeal as a safe-haven. The yield on the 10-year Treasury bond in the United States was up by 0.9 basis points to 4.059%.
Analysts from DBS stated in a recent research note that "current market dynamics only show a mild risk off tone. This is not enough to sustain a strong?bid for U.S. Treasury Bonds or to prompt the Fed to make 'quicker cuts.
They added that "the conflict raises the spectre of?stagflation." While energy prices are not at the same level as they were during the beginning of the Russia-Ukraine war in 2022 investors will likely be watching closely the duration and extent to which energy supplies will be interrupted.
Gold fell 0.4% to $5,307.08. Bitcoin dropped 2.1% to $68,937.84 while Ether was down 2.3% to $1,995.50.
Early European trades showed pan-regional contracts down by 0.9%. German DAX Futures were also down by 1.0%, and FTSE Futures were off 0.5%. Reporting by Gregor Stuart Hunter, Rae Wee and Kirovan Donovan: Editing by Neil Fullick and Kirovan Donovan
(source: Reuters)