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Australian shares fall to a record low of over a month as rising oil prices intensify inflationary concerns
The Australian share market closed Monday at its lowest level in over a month, with mining and gold stocks dragging it down. This was due to a fall in commodity prices. Meanwhile, the stagnation of Middle East peace negotiations boosted crude prices, fueling inflation fears. The benchmark S&P/ASX 200 ended 1.5% lower, at 8,505.30 point, its lowest close since March 31, As commodity prices fell, the number of miners dropped 2.8% to a new low. BHP and Rio Tinto fell between 2.8% to 3.6%. Gold miners fell 4% while real estate dropped about 3%, and financials fell 0.3%. Santos and Woodside Energy both reached a new high of 2.7% after the first oil was produced from the initial phase in Alaska. Oil prices increased after a drone attack set off a fire in a nuclear power station in the United Arab Emirates. This compounded global energy shocks that have caused central banks to reassess their growth and inflation outlooks. The Australian central bank has raised its inflation forecasts, downgraded the outlook of economic growth and increased its main cash rate to 4.35%. The market was already fragile prior to today. Mark Gardner, MPC Markets' founder and chief executive officer, said that the RBA has 'just revised' its inflation forecasts. Bond yields have also risen globally. Now, oil is spiking as a result of the Hormuz crisis, which won't be resolved any time soon. Tuas was the worst performing benchmark, falling as much as 68.7%, to its lowest level since September 2023, after Singapore suspended the review of the merger between Simba Telecom's M1 and Keppel. The benchmark S&P/NZX 50 Index in New Zealand fell 1.6%, to 12,762.92 - its lowest closing since March 30. (Reporting by Anjali Singh in Bengaluru; Editing by Nivedita Bhattacharjee)
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Anglo American sells Australian coal mines up to $3.88 Billion
Anglo American announced on Monday that it would sell its steelmaking mines in Australia for up to 3,88 billion pounds to UK-based Dhilmar. The move is part of Anglo American's strategy to exit the sector and reduce debt, as well as streamline assets, ahead of a planned merger between Teck Resources, Canada, and Anglo American. Anglo, listed in London, is selling the mines located in Queensland's Bowen Basin - the world's leading steel-making coal region - as part of its plan of divesting -or spinning off - non-core assets before completing the merger between Teck Resources and Anglo that will create a heavyweight focused on copper. The company stated that the deal includes $2.3 billion in cash up front and up to $1.58 Billion linked to coal prices. Proceeds will be used to reduce debt. Anglo CEO Duncan Wanblad stated?in a statement that "Through this deal, we will complete?our exit from steelmaking coal." Peabody retracted its $3.78billion bid for Anglo’s Australian coking coal assets last year after the companies couldn't agree on a lower price in the wake of a minefire. Anglo said that it will continue to pursue arbitration against 'Peabody for the failed deal' in parallel with Monday's deal.
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Anglo American sells Australian coal mines up to $3.88 Billion
Anglo American announced on Monday that it would sell its steelmaking mines in Australia for up to?to $3.88billion to UK-based Dhilmar. The move will exit the sector and reduce debt, as well as streamline assets ahead of an upcoming merger with Canada's Teck Resources. London-listed Anglo is selling mines in Queensland’s Bowen Basin - the world’s leading steelmaking coal region - as part of the company's plan to 'divest or spin-off' non-core assets before completing its merger with Teck Resources, which will create a heavyweight copper focused firm. The company stated that the deal includes $2.3 billion in cash upfront and up to 1,58 billion dollars linked to coal price, with a portion of the proceeds going to reduce debt. Anglo CEO Duncan Wanblad said in a?statement that "through this transaction we will complete our exit from steelmaking coal". Peabody retracted its $3.78billion bid for Anglo’s Australian coking coal assets last year after the companies couldn't agree to lower the price in the wake of a minefire. Anglo said that it will continue to pursue arbitration with Peabody in parallel to Monday's deal.
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China's aluminum output increases in April due to strong profits
According to data released by the Chinese government on Monday, China's aluminum production remained high in April. According to the National Bureau of Statistics, aluminium production in the?country grew by a?3.1% year-over-year to 3,87 million metric tonnes in April. China produced 15.33 million tons of metric tonnage in the first four month of this year. This is a 3.5% increase from the same period last. The price of aluminium remained high, largely due to the 'Iran war', which effectively shut down the Strait o f Hormuz, and caused major damage to the facilities that produce the light metal in the Gulf region, which represented nearly 9% world production. After a jump of more than 10% in March, the benchmark three-month contract for aluminium rose only 0.20% in late April. The higher prices led to better margins and prompted Chinese producers?to keep production high. According to data released earlier this month by?customs, China's exports of unwrought aluminum and its products were?strong? in April, increasing 15%. This was the highest level in at least a calendar year. The production of non-ferrous metals, including lead, zinc, copper, and aluminium, rose by 2.8% from the previous year to 6.94 million tons. The year-to-date production was up?3.3%, at 27,45 million metric tons. Other non-ferrous materials include tin and antimony. Mercury, magnesium, titanium, and mercury are also available. (Reporting and editing by Mrigank Dahniwala; Lewis Jackson and Dylan Duan)
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Overnight, Russian attacks in Ukraine kill one and injure over 30 people, say officials
Overnight, Russia launched drones, airstrikes, and'shelling' at Ukraine, targeting cities like Odesa, in the south, and Dnipro, in the southeast. One person was killed and more than 30 others were injured, Ukrainian officials reported on Monday. Serhiy Lysak said that drones had hit residential buildings as well as a school, and a kindergarten, in Odesa's major Black Sea port. He added that a boy aged 11 and a man aged 59 were both injured. Oleksandr Hanszha, regional governor of the region, said that Russia had launched a separate missile attack on Dnipro, in the south-east of Ukraine. The attack injured 18 people, including two children. Ivan Fedorov added on Telegram that three people had been injured in the Zaporizhzhia region's southeastern area following the attacks overnight. Oleksandr Prokudin, regional governor of Kherson region, said that one person was killed and nine injured in an attack on the southern region. Interfax, citing Russia's defence ministry, reported that drones had been shot down in Russia overnight, over areas such as Rostov and Belgorod, located in the south. Officials?said that at least four people died this weekend, three of them in the Moscow area, after Ukraine launched the biggest overnight drone attack on the Russian capital in more than a year. It was impossible to independently verify the battlefield reports. Both sides deny deliberately targeting civilians. (Reporting and editing by Himani Sarkar, Clarence Fernandez, and Jekaterina Glubkova from Tokyo)
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Australia's Santos achieves first oil at Alaska project
Santos, Australia’s No.2 oil &?gas producer said on Monday that it had?reached first oil in its Pikka project, located in Alaska, U.S.A. Shares of the Adelaide-headquartered company rose as much as 3.1% to A$8.12, their highest ?since April 13, while the broader S&P/ASX 200 benchmark index ?was down 1.4% by 0450 GMT. Stocks of the Adelaide-based company rose as much as 3.1% to A$8.12, their highest level?since April 13, while the broader S&P/ASX 200 benchmark index?was down 1.4% by 0450 GMT. Craig Sidney is a senior investment advisor at Shaw and Partners. He said, "This announcement is positive in light of the?strong oil price and?increasing production outlook". Santos stated that the Pikka project will reach a plateau of gross production of 80,000 barrels per day by?the third fiscal quarter 2026. The first revenue is expected two to three month after?first oil. Sidney stated that the increase in production is meaningful and significant. Santos, the operator of Pikka?, holds 51% while its partner Repsol has the remaining 49%. The company stayed true to its annual production and sales forecasts last month despite a temporary outage at a facility for gas and weather-related disruptions that affected the first-quarter output. (Reporting and editing by Tom Hogue, Subhranshu Sahu, and Nikita Marie Jino in Bengaluru)
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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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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
Australia union declares workers will strike at Inpex LNG plant from May 27
The Offshore Alliance said that the union grouping has served a 'notice of strike' at Inpex’s Ichthys facility in northern Australia, effective May 27. This could further tighten global energy supply.
In May, 326 out of 346 unionized workers at the 9,3 million-metric-ton-a year facility near Darwin voted to strike over pay and conditions.
Lawyers 'for the Offshore Alliance', a grouping of Maritime Union of Australia & the Australian Workers Union served the Japanese company with an intent to strike from May 27 through June 10. They said that months of talks had not made any progress.
In a statement, a spokesperson stated that "we have made it clear to Inpex we will not accept the shortchanging of our bargaining demands simply because Inpex couldn't be bothered to read our claims for 6 months."
The union group informed Inpex that it would continue to negotiate with the company during meetings scheduled for May 25 and 26,
Inpex didn't immediately respond to a comment request.
Japanese gas and power utilities, which are Ichthys LNG's main customers, are closely watching any disruption.
Australia is Japan's biggest LNG supplier. The country is presently?facing an?imminent supply?crunch? due to the Iran War and the rising demand for air conditioning as Japan enters summer. (Reporting and editing by Christian Schmollinger, Kate Mayberry and Alasdair pal in Sydney)
(source: Reuters)