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Asia markets plunge as technology rout intensifies
Asian markets fell on Monday, as investors put a halt to the AI rally. Meanwhile, the Israeli strike on Beirut sent oil prices and dollar up. The 'chip-heavy' KOSPI in South Korea took a beating. It fell more than 6.8% during volatile trading that had earlier caused a temporary halt of 20 minutes. The benchmark has fallen about 14% since last week's high. Japan's Nikkei dropped 3.4% in the early trading, but U.S. S&P and Nasdaq futures attempted a rebound following a Friday sharp selloff. Nasdaq dropped by 4.2% after Friday's hot jobs report fueled expectations of Federal Reserve rate hikes. Marc Velan is the head of investments for Lucerne Asset Management, a Singapore-based asset management firm. "Korean tech names were among the best performers in the world and heavily owned, so they became a source of liquidity when the rate expectations changed after the jobs report." The yield on two-year Treasury bonds rose by more than 11 basis point on Friday, and then?by 1.6 basis points to 4.1782% on Monday. Bob Savage is the head of BNY's?markets and macro strategy. The key question is whether this?is an opportune pause or a peak in the nine week equity rally. SpaceX and Anthropic's IPO focus is part of this pause - to either make room for a new market cap, or to rethink the value. INFLATION AND THE ECB Ahead This week, the focus will be on inflation, with U.S. consumer prices due to be released on Wednesday, and central bank meetings taking place in Canada and Europe. Bitcoin dropped by 16% last week, its biggest weekly decline since the collapse in 2022 of the crypto exchange FTX. On Monday, it was hovering just below $63,000. SpaceX's debut will be followed in the coming months by mega-IPOs from?Anthropic? and OpenAI?, which are expected to raise so much money that brokerages are worried it could pull down other assets. Nick Ferres of Vantage Point Asset Management, Singapore, said that the market has shifted away from moderate inflation, rate cuts, and towards a potential "overheating" which could lead to higher Treasury yields and a path for short-term rates, as well as tighter liquidity. The Middle East situation remains fragile. Brent crude futures rose about 2.6% to $95.45 per barrel on Monday after an Israeli attack on Beirut led Iran to fire a salvo of missiles on Israeli targets. OPEC+ decided on Sunday to increase its oil production targets for the fourth time in as many month. The dollar held firm above 160 yen in the currency market and the Australian dollar rose to $0.7055. The euro was hovering at $1.1531. Reporting by Tom Westbrook, Editing by Aurora Ellis & Shri Navaratnam
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The price of oil has risen by more than $2 since Israel's attack on Lebanon
Oil prices rose by more than $2 per barrel on Monday, after Israel launched new strikes against Lebanon on Sunday despite an agreement between the two nations. This shattered hopes of a ceasefire and the restart of crude flow through the Strait of Hormuz. As of 0013 GMT U.S. crude oil futures were up by $2.10 or 2.32% at $92.64 per barrel, while Brent crude rose by $2.33 or 2.5% to $95.42 per barrel. This erased a majority of Friday's losses, when prices fell on the hope of a deescalation of the U.S. - Iran conflict. The latest strikes seemed to be yet another obstacle to a U.S. - Iran peace?deal, and to the reopening of Strait of Hormuz a vital conduit for global 'oil and gas' flows. Iran has set a ceasefire in Lebanon as a precondition for a deal with Washington. Iran launched missiles against Israel in retaliation for the Beirut attacks on Hezbollah, its ally. U.S. president Donald Trump said that he would instruct Israeli Prime Minister Benjamin Netanyahu to refrain from retaliating against Iran. Israel invaded Lebanon in march after Hezbollah, backed by Iran, fired drones and rockets across the border. Lebanon and Israel announced on June 3, that they had reached a ceasefire after negotiations in Washington. Both countries had agreed in April to cease hostilities, but the violence continued. The wider war is on hold since the U.S., Israel and other countries stopped their attacks on Iran early in April. However, Tehran continues to block shipping through Strait of Hormuz. OPEC+ agreed to its fourth increase in output?in just four months on Sunday, amid the resulting?supply crisis. Analysts said that the decision will have little effect, as most OPEC+ countries cannot meet their production targets because of the Hormuz shutdown or infrastructure attacks in Russia. In a recent note, Jorge Leon, Rystad's head of geopolitical analyses said that the impact of such a move would be "close to zero" in the current market. (Reporting and editing by Edmund Klamann, Christopher Cushing, and Colleen Waye)
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Asia markets plunge as technology rout intensifies
Asian markets fell on Monday, as investors slammed on the brakes to the AI rally. Meanwhile, the oil price and dollar rose due to the Israeli strikes in Beirut. A 8% decline in South Korea's chip heavy?KOSPI triggered a trading halt for 20 minutes?and has it down 17% since its record high last week. Japan's Nikkei dropped 3.5% in the early trading, while U.S. S&P500 and Nasdaq100 futures saw small gains. After a strong jobs report, which raised expectations of Federal Reserve interest rate hikes, the Nasdaq fell 4.2%, with most selling concentrated on semiconductor stocks. This put a halt to what had been an AI-led rally. The yields on two-year Treasury bonds rose by more than 11 basis points last Friday. Benchmark 10-year Treasury futures fell about five ticks in the early morning hours of Monday morning, Asia. Bob Savage is the head of BNY's macro-markets strategy. The key question is whether this is a "healthy pause" in the nine week equity rally, or a peak. IPO attention on SpaceX and 'Anthropic' is part of a pause - to either make room for a new market cap, or to rethink the value. INFLATION AND THE ECB Ahead The biggest news of the week is likely to be the SpaceX listing. It will price on Thursday, and trade on Friday. But inflation will also be a major topic, with U.S. Consumer Price Data due on Wednesday, and central bank meetings in Canada, Europe, and elsewhere. Bitcoin dropped by about?16% last week, its biggest weekly decline since the collapse in 2022 of crypto exchange FTX. On Monday, it was just above $63,000. Brokers are worried that the IPO of SpaceX could cause other assets to fall in value. The Middle East situation remains fragile. Brent crude futures were up 2.6% on Monday to $95.45 per barrel after an Israeli strike on Beirut led Iran to fire a volley of missiles on Israeli targets. OPEC+ decided on Sunday to increase its oil production targets for the fourth time in a row. The dollar held firm above 160 yen in the currency market and the Australian dollar rose to $0.7038. The euro was hovering at $1.1518. Reporting by Tom Westbrook, Editing by Aurora Ellis & Shri Navaratnam
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Asia markets prepare for sales after Wall Street tech crash
The Asian markets are expected to fall Monday as Wall Street's nine week winning streak in tech sales ends. Meanwhile, the Israeli strikes on Beirut have sent oil and dollar prices higher. Futures and the U.S. exchange-traded funds' moves on Friday pointed to sharp drops in Japan and South Korea. S&P 500 futures fell 0.2% early in Asia. After a strong jobs report, which raised expectations of Federal Reserve rate hikes, the Nasdaq fell 4.2%, with most selling concentrated on semiconductor stocks. This put a halt to what had been an exciting?AI-led rise. The yield on the two-year Treasury rose by more than 11 basis point on Friday, and the benchmark 10-year Treasury futures were down about five ticks on Monday morning. Bob Savage is the head of BNY's markets macro strategy. He said that "the AI-drives everything narrative frayed in the last week." The key question is whether this is a healthy break in the nine week equity rally, or a top. The IPO focus of SpaceX and Anthropic 'is part of the pause - to make space for the new market capital or to rethink the value." This week, the biggest news is likely to be the SpaceX listing. It's expected that it will price on Thursday, and then trade on Friday. But, inflation will also be a major topic, with U.S. consumer prices due on Wednesday, and central bank meetings taking place in Canada and Europe. Bitcoin dropped by 16% last week, its biggest weekly decline since the collapse in 2022 of the crypto exchange FTX. It was hovering around $63,000 on Sunday. Brokers are worried that SpaceX's IPO could cause other assets to fall in value. The Mideast situation remains fragile, and Brent crude futures rose 2.6% on Monday to $95.45 per barrel after an Israeli strike on Beirut led?Iran? to fire a salvo? of missiles? at Israeli targets. OPEC+ has agreed to a fourth increase in oil production targets in just a few months. The dollar held firm above 160 yen in the currency market and the Australian dollar rose to $0.7038. The euro was hovering at $1.1518.
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China dominates low-carbon industrial projects, US lags, report says
A report on Monday said that the number of low-carbon projects which have received funding in the past six months has increased by more than twofold, to 19 projects, worth $43 billion. The majority of these are located in China. A report by Mission Possible Partnership stated that 13 projects, from methanol and aluminium to methanol, reached a decision on investment between November and April. Only one project was in the U.S. It added that eight projects were funded in the same period last year. The green industrial investment boomed during the time when Israel and the U.S. attacked Iran, driving up the price of fossil fuels. Faustine Delasalle is the CEO of MPP. She said, "In an increasingly fragmented and unstable environment, fossil fuel dependence has repeatedly shown to be a source of price shocks and supply disruptions as well as economic crises." The MPP, a non-profit organization based in the United States that aims to?boost the growth of low emission industry is supported by both the Bezos Earth Fund as well as the World Economic Forum. Total pipeline of low-carbon industrial project announcements?is 969? in sectors such as chemicals, aviation and metals. China is responsible for 170 out of the announced projects. Other countries in the "sunbelt", such as India and Brazil, have 318. Europe has 211, and the United States has 72. The United States has a large pipeline of projects, but is losing momentum, according to the report. It also noted that over the past 12 months, there were 20 fewer announced projects than in 2012. Reporting by Eric Onstad, Editing by Chris Reese
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Russian drone strikes nuclear fuel storage facility near Chornobyl in Ukraine
Ukrainian officials said that a 'Russian drone' had struck a storage area for spent nuclear fuel near Ukraine’s now-disused Chornobyl plant. They added that the radiation levels remained stable. Separately, the Kyiv General Staff and state atomic agency stated that a container-receiving facility?had partially been destroyed, but no spent fuel had been stored at the time of?attack. The fire that resulted was put out and there were no reported injuries. Russia has not publicly commented on the alleged attack?on the facility which is located?around 15 km (9miles) away from the Chornobyl Plant, the site where the world's biggest nuclear disaster occurred. Andrii Sybiha, Ukrainian Foreign Minister, wrote on X: "This isn't the first time Russian forces have put Ukrainian nuclear facilities in danger." "Russia's nuclear blackmail and threats against nuclear safety are systematic, deliberate, and inacceptable." A Russian drone attacked a containment 'arch that was over the Chornobyl reactor in February 2025. The 'arch had been destroyed by the explosion and meltdown of April 1986. ?Russia denied responsibility. Kyiv has also accused Moscow of attempting to attack the largest nuclear power plant in Europe, Zaporizhzhia Nuclear Power Plant located in southeast Ukraine. (Reporting and editing by Tomaszjanowski).
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Embraer observes that airlines are delaying their decisions about plane purchases due to the Iran war
Embraer CEO Francisco Gomes Neto said 'on Saturday that some airlines are delaying their decisions on whether or not to exercise their aircraft purchase options due to a lack of certainty over the war in Iran. This uncertainty has led to a rise in 'jet fuel prices. Gomes Neto, the Brazilian planemaker, noted that while there have been no requests to delay deliveries or slowdowns in active sales campaigns he was noticing a growing caution around incremental commitments. He said that some companies who could exercise previously signed options were delaying that to better understand the?evolution of the situation. Embraer has a commercial backlog of nearly five years worth of deliveries. The company is pursuing multiple sales campaigns to sell its E2 family and hopes to close some deals next month at the Farnborough airshow in the United Kingdom. Embraer wants to capitalize on recent agreements, including those with Finnair and Azorra. It believes that the E2 family's fuel-efficiency can increase demand. Gomes Neto stated that several campaigns are currently underway, and the timing of any potential deals is heavily dependent on the customers. "I'm not sure if the commercial aviation sector will have a strong year like last year, but I think it should be good." Embraer is aiming to increase its output. The company has set an internal goal of delivering between 95 and100 commercial aircraft by 2027. This year, the?outlook is between 80 and85 planes. Gomes Neto said that the goal is more dependent on smoother supply chains than it is on geopolitical tensions such as the Iran war being resolved. He said that the bottlenecks in the industry, which have been present since the pandemic, are slowly improving. He added, "It is about getting the?cadence correct." Embraer is also looking to improve margins within its commercial aviation division. Gomes Neto stated that the company has renegotiated older contracts with lower profitability, and is expecting a stronger demand for new agreements to support better pricing.
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Israeli forces kill a Palestinian child and injure his parents on the West Bank
The Palestinian Health Ministry reported that Israeli forces killed and injured a 7-month-old Palestinian child in the Tel Rumeida area south of Hebron, West Bank on Friday evening. The ministry identified the infant as Sam Fahd Abu Haikal, and stated that he died on the scene. His parents were moderately injured by gunshots. The grandmother of the baby said that the family stopped the car when they saw Israeli soldiers and military vehicles in the distance. She claimed that shots were fired at them which they first thought were warning shots. She said that "one bullet hit my grandson and lodged in his mother's cheek, after traversing his face, crossing his head and striking his mother's cheek." The bullet also grazed her father's finger and the mother is currently hospitalized. Israeli military claimed that during Friday's operational activity, soldiers in the Hebron region perceived a vehicle speeding toward them. One soldier fired a single shot at the vehicle. It said that three Palestinians had been injured and taken to hospital for treatment. The military stated that an initial investigation found that those injured were "uninvolved civilians" and that the incident is 'under review'. Tel Rumeida is an area in Hebron where Israeli settlers are under heavy military protection among Palestinian residents. It has been a hotbed of violence for many years, especially when it comes to the Israeli-occupied West Bank. According to a report by the European Union in 2024, more than 3 million Palestinians live in East Jerusalem and the West Bank, including over 700,000.
EXCLUSIVE-Putin growing concerned by Russia's economy, as Trump mulls more sanctions
President Vladimir Putin has grown progressively worried about distortions in Russia's. wartime economy, simply as Donald Trump pushes for an end to the. Ukraine conflict, five sources with knowledge of the circumstance. told Reuters.
Russia's economy, driven by exports of oil, gas and. minerals, grew robustly over the previous two years in spite of numerous. rounds of Western sanctions enforced after its invasion of. Ukraine in 2022.
However domestic activity has actually ended up being strained in recent months. by labour lacks and high interest rates introduced to tackle. inflation, which has accelerated under record military costs.
That has actually added to the view within a section of the. Russian elite that a worked out settlement to the war is. preferable, according to 2 of the sources familiar with. believing in the Kremlin.
Trump, who went back to office on Monday, has promised to. quickly fix the Ukraine conflict, Europe's biggest because. World War Two.
This week he has actually said more sanctions, in addition to tariffs, on. Russia are likely unless Putin negotiates, adding that Russia. was heading for big trouble in the economy. A senior Kremlin. aide said on Tuesday that Russia had up until now gotten no specific. proposals for talks.
Russia, naturally, is economically interested in. negotiating a diplomatic end to the dispute, Oleg Vyugin,. previous deputy chairman of the Reserve bank of Russia said in an. interview, pointing out the risk of growing economic distortions as. Russia turbo-charges military and defence costs.
Vyugin was not one of the 5 sources, who all spoke on. condition of anonymity due to the level of sensitivity of the scenario. in Russia. The degree of Putin's concerns about the economy,. described by the sources, and the influence of that on views. within the Kremlin about the war, are documented here for the. very first time.
Reuters has actually previously reported that Putin is prepared to. discuss ceasefire choices with Trump but that Russia's. territorial gains in Ukraine need to be accepted which Ukraine. must drop its quote to sign up with the U.S-led NATO military alliance.
Kremlin spokesperson Dmitry Peskov, when asked about the. Reuters reporting, acknowledged bothersome elements in the. economy, however stated it was developing at a high rate and was able. to satisfy all military requirements incrementally along with all. welfare and social requirements.
There are issues, but regrettably, issues are now. the buddies of almost all nations of the world, he said. The scenario is evaluated as stable, and there is a margin of. safety.
Trump is focused on ending this ruthless war, by. engaging a wide range of stakeholders, White Home National. Security Council representative Brian Hughes stated in action to. Reuters' questions. In current weeks, Trump's advisers have. walked back his boast that the three-year-old war could be. solved in a day.
Simply days before Trump's inauguration, outbound U.S. president Joe Biden's administration imposed the broadest. bundle of sanctions to so far target Russia's oil and gas. earnings, a relocation that Biden's nationwide security adviser, Jake. Sullivan, said would provide Trump utilize in any talks by. applying economic pressure on Russia.
Putin has said that Russia can battle on as long as it. takes and that Moscow will never bow before another power over. essential national interests.
Russia's $2.2 trillion economy had actually till just recently shown. exceptional endurance throughout the war, and Putin has actually applauded top. financial authorities and business for circumventing one of the most. strict Western sanctions ever troubled a major economy.
After contracting in 2022, Russia's GDP grew faster than the. European Union and the United States in 2023 and 2024. This. year, nevertheless, the central bank and the International Monetary. Fund forecast sub-1.5% growth, although the government tasks. a somewhat rosier outlook.
Inflation has actually edged toward double digits regardless of the main. bank hiking the benchmark rates of interest to 21% in October.
There are some issues here, particularly inflation, a specific. getting too hot of the economy, Putin said in an annual news. conference on Dec. 19. The government and the central bank are. already entrusted with bringing the pace down, he stated.
' WAR GOALS MET'
In 2015, Russia made its most considerable territorial. gains considering that the early days of the war and it now controls nearly. a fifth of Ukraine.
Putin thinks crucial war objectives have actually already been fulfilled,. consisting of control of land that links mainland Russia to. Crimea, and compromising Ukraine's military, stated among the. sources acquainted with thinking in the Kremlin.
The Russian president also recognizes the strain the war is. putting on the economy, the source said, citing actually big. problems such as the effect of the high interest rate on. non-military businesses and market. Russia has treked defence spending to a post-Soviet high of 6.3%. of GDP this year, accounting for a 3rd of budget expenditure. The spending has actually been inflationary. Along with wartime labour. shortages, it has actually driven incomes higher.
On top of that, the government has actually looked for higher tax. revenues to reduce the financial deficit.
Vyugin, the former deputy guv, said continual high. rates would put pressure on the balance sheets of organizations and. banks. Russian coal and steel manufacturer Mechel, owned by. entrepreneur Igor Zyuzin and his household, on Tuesday said it had. restructured its debt, under pressure from low coal prices and. high interest rates.
PUTIN ISSUE
Putin's aggravation appeared at a Kremlin conference with. magnate the evening of Dec. 16, where he scolded top. financial officials, according to two of the sources, who have. understanding of conversations about the economy in the Kremlin and. government.
One of the sources, who was briefed after the conference, was. informed Putin was visibly displeased after hearing private. financial investment was being cut because of the cost of credit.
The Kremlin released Putin's initial remarks praising. company however did not determine any of business individuals. at the mainly closed-door meeting. Reuters verified with one. source that Reserve bank Governor Elvira Nabiullina was not. present.
On Wednesday, Putin stated in televised remarks to ministers. that he had actually just recently gone over with business leaders the dangers. of a decrease in credit activity for long-lasting growth, in an. apparent referral to the December conference.
A few of Russia's most powerful business people, including. Rosneft CEO Igor Sechin, Rostec CEO Sergei Chemezov, aluminium. magnate Oleg Deripaska and Alexei Mordashov, the largest. investor in steel-maker Severstal, have actually openly criticised. the high rates of interest.
Nabiullina has actually dealt with pressure not to raise rates even more. from 2 of Russia's most effective bankers - her former boss,. Sberbank CEO German Gref, and VTB CEO Andrei Kostin - who feared. that Russia was heading towards stagflation, one source with. understanding of discussions about the economy stated.
In his Dec. 19 comments, Putin required a well balanced rate. choice. The next day, at its last financial policy meeting of. the year, the reserve bank held the rate at 21% in spite of market. expectations that it would hike by 200 basis points. In a speech after the decision, Nabiullina rejected caving in to. pressure. She said criticism of central bank policy increased. when rates were high.
Nabiullina, Gref and Kostin did not instantly respond to. requests for remark for this story.
NABIULLINA
Nabiullina, a former financial aide to Putin who likewise served. as his economy minister, is one of Russia's most effective females:. she has functioned as central bank governor because June 2013 and. three of the sources stated that Putin trusts her.
Simply a couple of weeks after sending out soldiers into Ukraine in 2022,. Putin proposed Nabiullina take a third term as reserve bank. chief. Her term ends in 2027.
Her fans say critics miss the underlying reason for the. inflation - the huge spending on the war - and say that without. her, financial stability would have be threatened.
Some lawmakers have actually required her to be replaced, an. not likely outcome, according to 2 of the sources.
No one in such a circumstance will alter the guv of the. reserve bank, stated one of the sources, who is acquainted with. conversations about the economy. Nabiullina's authority is. indisputable, the president trusts her.
(source: Reuters)