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Investors focus on US tech earnings as South Korean shares lose early gains
South Korean shares closed slightly higher on Tuesday, after a sharp rise in the early going. However, caution before key U.S. technology earnings and chip earnings underscored the market's reliance on heavyweight chipmakers. The benchmark KOSPI Index settled 0.7% higher, at 6,797.7, after rising 6.2% during early trading. This was largely due to a 9% increase in AI memory chips maker SK Hynix. SK Hynix reversed its course and ended marginally lower, while Samsung Electronics finished slightly higher. The'sharp swings' highlighted the dominance and power of Samsung Electronics, SK Hynix and other companies that together account for more than half of the KOSPI. These companies can have a major impact on the benchmark by leveraging their products and share prices. Wei Li is the head of multi-asset investment at BNP Paribas Securities in China. The performance of an equal-weighted index would be lower because traditional exporters like shipbuilders and autos, as well as?chemicals, have seen limited upside due to a softer global market. The KOSPI surged in early trading, but the 11th sidecar trading ban in 15 sessions in this month was triggered by it. This highlights the increased volatility caused by the heavy concentration of chipmakers, at the heart of the AI boom. Wall Street's overnight rebound set the tone for Wednesday's rally. Market participants, however, remained focused on Alphabet's results and those of chipmakers Intel and Texas Instruments. Jason Lui is the head of APAC equity derivate strategy at BNP Paribas. He said that after the sharp drop in share prices, which was largely due to valuation, there should be a less crowded positioning going into major tech earnings. Lui explained that this will help investors "better assess the growth prospects of companies in a fundamental way." Other notable stocks included Hyundai Motor, Kia?Corp, and Samsung BioLogics. In the week ending Tuesday, foreigners have invested around 2.71 trillion dollars. However, they remain net sellers for the year with more than $100 billion of?outflows. On the onshore settlement platform the won last traded at 1.478 U.S. dollars, up from the previous day's 1,471.
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Shanghai copper reaches 7-week high due to supply concerns and strong China demand
Shanghai copper prices rose on Wednesday to a seven week high as supply concerns and a 'firm Chinese demand' pushed up the price. London copper fell after reaching a six week peak just a day before. As of 0700 GMT, the most traded?copper?contract at the Shanghai Futures Exchange had risen by 0.94% to 105,820 Yuan ($15.625.65) per metric ton. It had reached its highest level since June 3, at 106760 yuan, earlier in the day. The benchmark three-month copper price on the London Metal Exchange fell 0.57%, to $13,806.5 per ton. This was after it hit a six-week-high on Tuesday. Copper inventories have dropped in LME-registered storage warehouses Warehouses that are SHFE monitored . The Chinese demand is strong, and the market still awaits news about potential U.S. metal tariffs. "Traders continue to deliver metal to the U.S. due to the CME-LME?arbitrage import?ahead of the 'U.S. Craig Lang, Principal Analyst at CRU said that the U.S. would decide whether or not to impose tariffs on refined copper. The Chinese market remained active. The Yangshan Copper Premium On Tuesday, the, which measures import demand, reached its highest level since December 2023, reaching $109 per?ton. Lang explained that typhoon-related maintenance at smelters and the stockpiling of scrap metal due to their impact on the supply are both affecting supply. The tight scrap supply has also increased demand for "copper cathode". The Middle East conflict is also pushing up oil prices. According to economists polled, the U.S. Federal Reserve will keep rates the same for the rest of the year. Copper became more expensive to buyers who used other currencies because the dollar was strong. Aluminium was up by 0.02% on the LME, while?zinc gained 0.23%. Lead fell 0.27%. Nickel rose 0.5%, and Tin climbed 0.2%. The SHFE saw aluminium gain 0.59%. Zinc gained 0.68%. Lead lost 0.88%. Nickel climbed 1.07%. Tin added 0.87%. $1 = 6.7722 Chinese Yuan (Reporting and editing by Subhranshu Sahu).
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Gold reaches two-week highs as Fed outlook and Mideast conflict remain in focus
Gold rose to a?high? of two weeks?on a technical basis?on Wednesday as investors assessed a deteriorating Middle East conflict. They also waited for the U.S. Federal Reserve's meeting next week, which will provide clues about the interest rate outlook. Gold spot rose 0.9% by 0705 GMT to $4,112.70 an ounce, after hitting its highest level since July 7 earlier that day. U.S. Gold Futures for August Delivery jumped 1% to $4,116.90. The escalating tensions in Middle East have pushed up oil prices, stoked inflation fears and increased expectations of interest rate increases. This has led to gold's steepest weekly decline since early June. Tim Waterer is the chief market analyst for KCM Trade. He said that buyers are stepping in to find a bargain after a recent pullback. Meanwhile, hopes of diplomatic progress between Iran and the U.S. also help price movements. Marco Rubio, the U.S. secretary of state, said that Washington was still willing to talk to Iran about a resolution to the crisis. However Tehran did not seem to be serious. After threats by the Iran-aligned Houthis of Yemen, three oil tankers carrying Saudi crude towards Asia reversed their course in Tuesday's Red Sea. This raised concerns over?energy supplies. A poll suggests that the Fed will maintain its key interest rate for the rest of 2026. However, a majority who responded to a question regarding the possibility of a hike in this year rated it "high". This is a change from last month, when the majority rated it "low". The opportunity cost of holding?bullion that does not yield increases as interest rates rise over time. Silver spot?was 0.7% higher at $59.18 an ounce, after reaching its highest level since July 10 earlier that day. Palladium rose by 1.5%, to $1300.58, while platinum jumped 1.2%, to $1649.03. (Reporting and editing by Rashmi aich and Subhranshu sahu in Bengaluru, and Pablo Sinha based in Bengaluru.
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Norsk Hydro's Q2 profits are the highest as higher prices and Qatar offset the lower price.
Norsk Hydro, the Norwegian aluminium manufacturer, reported a quarterly profit that was?above expectations? on Wednesday. Higher aluminium prices and higher?recycling? margins outweighed lower energy output and negative currency effects. Hydro enjoyed a windfall from the higher aluminium prices, regional premiums and disruptions in Middle East supplies during the second quarter. However, reduced production at its Qatalum Joint Venture limited this. The company's adjusted earnings, before interest, taxes, depreciation, and amortization, rose 15% year-over-year to 8.92 billion Norwegian Crowns ($927.0 million) during the April-June period, while the average estimate of analysts polled was 8.22 billion Norwegian Crowns. Hydro's Aluminium Metal division, which has an adjusted EBITDA of 6.42 billion crowns, led the improvement. It said that higher metal prices and lower costs for alumina more than compensated a?8% drop in sales volumes, as well as increased energy and carbon expenses and a stronger Norwegian Crown. Hydro's adjusted EBITDA dropped from 922 millions crowns a year earlier to 316million crowns at Qatalum due to the Middle East Crisis. Hydro ceased purchasing metals from Qatalum in the third quarter after the marketing and offtake contract with the venture expired. Hydro stated that it was in discussions with its partner about how Qatalum’s metal would be marketed and sold going forward. Aluminum prices rose to a record high of four years in June, as regional supply risk increased and physical premiums in Europe and North America strengthened. Hydro's recycling operation earned over 900 million crowns despite little improvement in underlying demand. Hydro reported that primary aluminum consumption outside China has declined from a year ago. It added that the Energy division's profits had also been cut in half due to a lower hydropower output and regional price differences.
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Asian stocks hold gains as US recoveries, oil prices rise
The stock market made a few gains on Wednesday, but the positive impact of a strong Wall Street session was offset by caution as investors waited for earnings reports from Big Tech. Meanwhile, the oil price rose due to threats from Houthi "rebels" to escalate the Middle East conflict. The broadest MSCI index of Asia-Pacific stocks outside Japan rose 0.2%, while the South Korean Kospi's gains were reduced to just 1.5% from an earlier gain of over 6%. The Nikkei225 in Japan fluctuated between gains and losses. Meanwhile, S&P 500 futures fell 0.2% along with a 1.2% drop for Hong Kong stocks. Brent crude rose by 1.3% to $92.22 a barrel on Tuesday after two oil tankers transporting Saudi crude for Asia changed course in the Red Sea following threats from Yemen's Iran aligned Houthis. Westpac analysts stated in a report that equity markets have shrugged off the geopolitical risk and are instead focusing on returns from the tech sector. After large losses in the past few days, semiconductor stocks have bounced back. The market will be focused on the earnings of Alphabet and Tesla. Alphabet is under increased scrutiny for its delayed launch of an important AI model. Tesla is expected to report their first quarterly cash loss in more than two years. Laura Cooper, head of macrocredit at Nuveen and global investment strategist, wrote that the earnings season would be a test to see if the group?carrying the market could keep up the pace now required. The second half will require that AI spending translate into earnings growth in the entire market, and that credit can absorb a new wave of supply with no spreads giving away. The pharmaceutical stocks in India fell 1.5% following the announcement by U.S. president Donald Trump that all generic drugs imported into the United States would be subject to a 0% tariff for two years starting August 1, and then a 100% tariff for one year, followed by a 200% rate thereafter. The U.S. Dollar Index, which measures the strength of the dollar against six currencies held at 101.14, near its one-week high. The U.S. Dollar was unchanged at 163.17 yen against the?yen after hitting a four-decades high on Tuesday. Satsuki Katayama, the Japanese Finance Minister, said that the government is ready to take 'decisive action' in currency markets when needed. However, he refused to comment on specific levels of foreign exchange. Japan's imports reached a new record in June due to the soaring price of oil and the battered yen. Exports also exceeded expectations thanks to strong demand from AI data centres and a weak yen. Oil prices rose to a five-week peak on Tuesday. This did little to disturb the bond and currency markets in advance of next week's central bank meetings. According to a survey, economists believe that the U.S. Federal Reserve will keep its key rate constant for the remainder of 2026. However, they also said there is a high chance of a rate increase. FedWatch, an online tool from CME Group, showed that Fed funds futures indicated that, while a rate hike is likely by December, one of 50 basis points or higher by the end is just a coin flip. The yield of the 10-year Treasury bond in the United States was up by 0.2 basis points to 4.628%. Gold rose 1.2% to $4,124.74. Bitcoin was down by 0.5% to $66,077.16 while ether remained flat at $1923.25. (Reporting and editing by Christopher Cushing, Sam Holmes and Gregor Stuart Hunter)
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Steelmaker SSAB misses profit forecasts for Q2 as war-related costs bite
?Swedish steelmaker SSAB reported a smaller-than-expected rise ?in its second-quarter operating ?profit on ?Wednesday, ?as higher steel prices and shipments were partly offset by increased costs, including higher logistics and energy prices linked to the Middle East crisis. Operating earnings increased to 2.70 billion Swedish Crowns ($278.3million) in the April-June period, up from 2.14 billion crowns one year earlier. A poll by SSAB revealed that analysts expected?2.85 million crowns in average. In a press release, CEO Johnny Sjostrom stated that despite the continued geopolitical uncertainty, they remain committed to executing their'strategic priorities', strengthening the premium product offerings, and progressing our transformation towards fossil free steel production. SSAB operates steel businesses both on the Atlantic and the European side. It said that it?anticipated a seasonal decline in demand during the third quarter. It will also carry out planned maintenance in all of its steel divisions. Steel producer 'Steel Producer' expects its third quarter shipments in the Americas, Europe, and Special Steel divisions to be significantly lower than the previous quarter. It added that a slight increase in realised prices is expected due to?pricing increases already implemented.
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Helen Jewell: ROI-AI is not a threat to equity diversification
Investors are searching for diversifiers as the AI market becomes more crowded. Several options are hidden in plain sight. The massive spending on AI in the last year has boosted earnings for corporations. Companies associated with this splurge, as represented by an iShares?ETF, have seen their?stocks double from?June of 2025 to this June before a recent drop. BlackRock reports that the "momentum factor" - which is where winning stocks continue to?win - has outperformed all other factors over the last five years. It gained nearly 200%. Diversification is not a strategy that has been rewarding. This could change. Goldman Sachs says that the AI market is the most crowded ever. This has led many investors to wonder which parts of the market could offer an alternative if this AI boom fails. Three options are available. First, healthcare. The current global equity index strategy is not as diverse as you would expect. According to our analysis of global stock returns over the last 12 months, the MSCI All Country World Index has a correlation with AI stocks of 0.79 and with the momentum factor of 0.76, which means that the?returns are closely related. Healthcare stocks had a negative correlation with AI of 0.06 and a momentum factor of 0.12. There was, in other words almost no correlation between the movement of AI stocks and that of healthcare stocks over the last year. It is clear that healthcare has been a good diversifier. We expect healthcare to continue to play a role in protecting portfolios from downturns, due to its long history of strong earnings growth. Long-term changes such as the demographic shift and innovation in medical technology, as well as pharmaceuticals, continue to boost profits. In the past 30 years, the strength of healthcare earnings has translated into higher valuations for healthcare compared to the market. AI's dominance over the last few years has led to healthcare trading at a discount of 15%. We believe that while healthcare offers attractive valuations and strong earnings, it is important to be selective. According to?FactSet & BlackRock, the healthcare sector had more stock-specific volatility than any other sector last year. We prefer companies that embrace technology change. Combining large?medical data with AI models could, for example speed up the detection and treatment. This will not change, even if AI as a whole fades. OLD ECONOMY, NEW CASE Latin America is the second. Investors have mostly overlooked equity markets in Latin America, which have had a low relationship with AI and momentum over the past few years. According to BlackRock, Latin America accounts for just 0.8% in the MSCI ACWI but 7% in global GDP. This gap could close in the next few years, according to BlackRock. Brazilian and Mexican shares are also trading below their historical values, while most major markets are at a premium. Interest rate cuts in the near future, which would benefit their domestic economies, as well as, on a longer-term basis, rising commodity demand due to?AI and electricification, could be catalysts for a rating reassessment. The UK, my home market, has a low correlation with AI of 0.26 and has proven resilient to market turmoil over the past few years, fueled by the COVID-19 Pandemic, geopolitical conflict, and inflationary spikes. Over the last five years, the FTSE 100 outperformed the global stock market on a total returns basis - without having much or any exposure to pure AI. The UK market is characterized by its exposure to sectors of the "old economy", which are less susceptible to disruption from AI, including financials, materials and energy. As with healthcare, there are many reasons to believe that these sectors will benefit from AI. This could be through cost-cutting in banks or increased demand for copper due to AI and electrification. After a decade of six different prime ministers, political stability could be a catalyst to help UK stocks close the gap in valuation with developed markets. Stability could lead to greater economic confidence, which would encourage domestic investors to buy UK stocks in addition to foreign investors. This diversification strategy carries a risk: AI could continue to grow while diversifiers, which are meant to protect portfolios, drag down performance. Although there are many reasons to be optimistic about the three above areas over the long-term, there are not many catalysts that will lead to AI outperforming them in the near term. The AI trade could stall, either due to fears of over-investment or an unforeseen event. We've seen a drop in the U.S. Semiconductor Index just this month. Holding stocks to help weather the storm seems sensible.
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Gold reaches two-week highs as Fed outlook and Mideast conflict remain in focus
Gold rose to a two-week high on Wednesday as technical buying boosted the price. Investors assessed the escalating conflict in the Middle East and were awaiting the U.S. Federal Reserve's meeting next week, which will provide clues about the interest rate outlook. Gold spot rose 1.3% by 0511 GMT to $4,129.43 an ounce, after hitting its highest level since July 7 earlier that day. U.S. Gold Futures for August Delivery jumped?1.4% at $4,134.50. As tensions escalate in the Middle East, oil prices and inflation fears rise. This has led to expectations of interest rate hikes which caused gold to drop at its steepest weekly rate since early June. Tim Waterer is the chief market analyst for KCM Trade. He said that buyers are stepping in to find a bargain after the recent pullback. The hope of diplomatic progress between Iran and the U.S. also helps price movements. Marco Rubio, the U.S. secretary of state, said that Washington was still willing to talk about ending the Iran crisis with Tehran but Tehran wasn't serious. After threats by the Iran-aligned Houthis of Yemen, three oil tankers transporting Saudi crude to Asia changed course in Tuesday's Red Sea. This raised concerns over energy supply. According to a recent poll, the Fed will maintain its key rate for the rest of 2026. However, a majority who responded to a question regarding the possibility of a hike in this year described it as "high". This is a change from last month, when the majority saw the likelihood of a hike as "low". The opportunity cost of holding?bullion that does not yield increases as interest rates rise over time. Spot silver, among other metals?was up 1.6 percent at $59.71 an ounce. It had earlier reached its highest level since July 10. Palladium grew 2.2%, to $1310.50, while platinum rose 1.9%, to $1659.97. (Reporting and editing by Rashmi aich and Subhranshu sahu in Bengaluru, and Pablo Sinha in Bengaluru.
Kyrgyzstan approves a plan to build a mini oil refinery amid Russian shortages
Kyrgyzstan agreed to build a mini-oil refinery worth $25 million in the south of the nation as part of its efforts to increase domestic fuel production and reduce dependence on imports due to tightening Russian supplies.
Central Asian Energy LLC of Kyrgyzstan, who will finance the project, recently signed an agreement with the Kyrgyz company to build the refinery.
The plant will produce bitumen, motor oil and gasoline that meets?K5 or K6 environmental standards. The first phase of the construction should be completed by autumn 2026.
Kyrgyzstan imports a majority of its gasoline from Russia. Fuel shortages in Russia have been a problem since late May, due to production reductions following drone attacks on Russian refineries.
The Association of Oil Traders of Kyrgyzstan (AOTK) reported a shortage of AI 95 and AI 98?grade gas in late June due to a lack of supplies from Russia, and a seasonal rise in demand.
In recent weeks, authorities have taken a series of steps to stabilize the fuel market. These include temporary price controls and lifting state price regulation for AI-95 gasohol. They also imposed a ban on exports of petroleum products.
Kyrgyzstan?also awaits fuel deliveries from China, and Belarus.
Separately the energy ministry announced that it had 'agreed with Uzbekistan to refine a part of its petroleum products in Uzbek refineries, before shipping them back to Kyrgyzstan. Reporting by Aigerim Turgunbaeva; Writing by Felix Light; Editing by Louise Heavens
(source: Reuters)