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Japan's Nikkei falls further from its record high as AI euphoria wanes
The Nikkei stock average in Japan retreated for the second time this week after reaching a record-high earlier 'this week. The Nikkei Index benchmark was down 1.58 % at 66 406,17 but is still on track for a small gain this week. The Topix index, which is a broader measure of the market, rose 0.01% to 3,952.44. The Nikkei closed at a record high of 68.402.13 on Wednesday, and it has gained 34% this year. The Nasdaq, the tech-heavy stock market in the U.S., closed lower overnight after Broadcom missed its revenue targets. This dampened euphoria about AI investments. The broader market was also supported by data that showed real wages in Japan rose by 1.9% in April, for the fourth consecutive month. "While AI and semiconductor-related stocks are down today, we're seeing gains across a broad range of other sectors and stocks," said Wataru Akiyama, ?an equities strategist at Nomura Securities. "Wage increases lead to higher consumption which leads to better?corporate performance. This is believed to be contributing to the overall resilience of Japanese stocks." The Nikkei Index saw 136 advancers and?88 decliners. Sumco, Ibiden, and Renesas Electronics were the biggest losers in this index. Top gainers included Japan Steel Works with an 8.9% increase, Trend Micro with a 7% rise, and T&D Holdings at 6%.
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Gold to fall by a week's worth on fears of rate hikes and tensions in the Middle East
Gold prices dropped on Friday and were set to suffer a weekly loss as tensions in the Middle East tempered hopes of a U.S. Iran peace deal, amid fears about rising inflation rates and interest rate hikes. As of 0225 GMT, spot gold was down by 0.5%, at $4,452.20 an ounce. It is down about 1.8% this week. U.S. Gold Futures for August Delivery fell?0.6% at $4,478.50. Hezbollah, a militia backed by Iran, rejected a ceasefire in Lebanon. Israel also said it would not withdraw its troops from Lebanon. This undermined the efforts of U.S. president Donald Trump to stop fighting there to achieve peace with Tehran. Nicholas Frappell is the global head of institutional market at ABC Refinery. He said that some pessimism about the outcome of the Iran conflict was negative for gold. "I think the trend is towards a tighter interest rate market, which also weighs on gold." Kansas City Federal Reserve president Jeffrey Schmid stated on Thursday that a choice must be made by the U.S. Central Bank between patience and maintaining interest rates or raising rates to curb inflation, which has been higher than target for years. Mary Daly, the San Francisco Fed president, said that the U.S. interest rate path would depend on the direction the economy takes. She added that the Fed's monetary policy is "in a great place" and it was prepared to react "either way." Gold is often viewed as a hedge to inflation. However, rising interest rates can have a negative impact on this non-yielding material. According to CME Group’s FedWatch tool, the markets are pricing in a Fed rate increase before year end, with a 51 percent chance of an action by December. Investors will now be assessing the direction of monetary policy by evaluating the U.S. nonfarm payrolls for May, which are due later that day. Silver spot fell by 1.4%, to $72.89 an ounce. Platinum dropped by 1.1%, to $1.878.68. Palladium fell 1.7%, to $1.298.45. All metals are headed to a loss for the week. (Reporting by Pablo Sinha in Bengaluru; Editing by Subhranshu Sahu)
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US House supports Russia sanctions and Ukraine aid in latest blow against Trump
The U.S. House of Representatives approved legislation Thursday that would provide aid to Ukraine and impose sanctions on Russia. This is the latest indication that Republicans are willing to 'defy their party leaders' and retaliate against President Donald Trump. The House passed the Ukraine Support Act?226?to 195?, after months of waiting. The House voted?226?to 195 for the Ukraine Support Act, which had been pending on the floor of Congress for months. Thursday, Democrats and 18 Republicans joined forces with an independent who usually votes along side them to pass the legislation. This was the latest indication of a break in what was a virtually unanimity of support for Trump's policies among members of his party. The passage came one day after a smaller number of House Republicans joined Democrats in?passing a resolution which would force the removal of troops from hostilities against Iran unless Congress declares a war or orders military force. Olha Stefanishyna - Ukraine's Ambassador to the United States - in a blog post on X, called the decision a'significant step forward' and said that it reflected the continued bipartisan support of Ukraine. Uncertain Future of Support Act The future of the Ukraine Support Act remains uncertain. It must be approved by the Senate. The Republican leaders of that chamber have refused to allow votes on Russia sanctions bills with broad bipartisan support because they want to wait for Trump's direction. Trump would likely veto the bill if it passed the Senate. After the Russian invasion of February 2022 many members of Congress, including the House and Senate leadership, have become 'cooler' towards Kyiv. This has been the case since Trump returned to office in January 2025. Since the beginning of his second term, the president has made all decisions about sanctions in the White House and not with Congress. The U.S. aid to the Kyiv Government has dropped sharply, even though Russia and Ukraine are pounding each other with artillery and missiles. The peace talks have stalled after Ukraine rejected the Russian President Vladimir Putin’s demand to surrender territory that it has successfully defended from 2022. The Ukraine Support Act authorizes up to $8 billion of direct loans and more than $1 billion in assistance to Kyiv. The EU also imposes strict sanctions and export controls against Russia, including financial institutions, oil and mining, and Russian officials. This passage was written 'as another Ukraine ally, the European Union agreed this week to begin talks with Kyiv about the first group of issues in their talks for accession. This was after an agreement to distribute 90 billion euros in loan funds for Ukraine's economy and defense. (Reporting and additional reporting by Jekaterina Glubkova; Editing by Nia, Ross Colvin, Kim Coghill and Nia Williams)
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Iron ore prices fall as steel margins decline, causing a fourth-week loss
The price of iron ore continued to fall on Friday, and was'set for a fourth consecutive weekly loss' as falling margins at steelmakers in China, the top steel-making consumer, curbed demand for this?key ingredient. By 0245 GMT, the most traded iron ore contract at China's Dalian Commodity Exchange(DCE) had fallen 0.95%, to 766 Yuan ($113.05), a metric tonne, and has lost 2.1% for the week. Earlier in the session, the contract reached its lowest level since 15 April? at 760.5 Yuan. As of 0235 GMT the benchmark July iron ore traded on?the Singapore Exchange remained unchanged at $101.5 per ton. It has fallen?3.6% this week. It reached its lowest level since March 6, at $100.85, earlier. Analysts claim that the rising cost of coal and decreasing domestic demand have squeezed steel margins. Mysteel, a consultancy, reported that 59% of Chinese steelmakers made a profit in June. This was down from a high of 64% nine months earlier on May 14. Data showed that the average daily hot metal production, which is a measure of iron ore consumption, fell 0.1% from the previous week to a new low for three weeks at 2,41 million tons. "Softer-than-expected seasonal steel demand in ?China, affected by persistent rainfall and unusually high temperatures, has ?weighed on iron ?ore consumption at a time when global supply is rising," analysts at shipping tracker Kpler ?said in a note. Coking coal and coke, the other steelmaking ingredients, were up by 0.32% each and 0.17% respectively. The benchmarks for steel on the Shanghai Futures Exchange have been moving sideways. The rebar price fell 0.19%. Hot-rolled coils dropped 0.35%. Wire rods grew 0.09%. Stainless steel fell 0.98%. $1 = 6.7757 Chinese Yuan (Reporting and editing by Subhranshu sahu in Beijing, Amy Lv reporting from Shanghai)
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US House supports Russia sanctions and Ukraine aid in latest blow against Trump
The U.S. House of Representatives approved legislation Thursday that would provide 'aid to Ukraine' and impose new Russian sanctions. This is the latest indication that Republicans are willing defy their party leaders and push back against President Donald Trump. The House passed the Ukraine Support Act 226-195. It had been pending for months. A few Republicans signed a petition with Democrats to force a vote. On Thursday, Democrats and 18 Republicans joined forces with one independent who usually votes along side them to pass the bill. This was the latest indication of a rift in the nearly unanimous support that Trump's supporters had for his policies. The passage came one day after a smaller number of House Republicans voted with Democrats to pass a Resolution that would force the withdrawal from hostilities against Iran, unless Congress declared war or ordered the use of force. The future of the Ukraine Support Act remains uncertain. It must be passed by the Senate. The Republican leaders of the Senate have refused to allow votes on Russia sanctions bills that enjoy broad bipartisan support. They said they would wait until Trump's direction. Trump would probably veto the bill if it passed the Senate. Many members of Congress, from both parties, supported Ukraine during the first few years following the full-scale Russian invasion of?February 2022. However, since Trump returned to office in January 2025 some of his closest Republican allies have become more ambivalent towards Kyiv. Since the beginning of his second term, the president also keeps decisions about sanctions at White House and not in Congress. The U.S. has dramatically slowed down its aid to Kyiv, even though Russia and Ukraine are pounding each other with artillery and missiles. The peace talks have stalled after Ukraine rejected the Russian President Vladimir Putin’s demands that it give up territory it has successfully protected since 2022. The Ukraine Support Act authorizes up to $8 billion of direct loans and more than $1 billion for Kyiv. The EU also imposes strict sanctions and export controls against Russia, including financial institutions, oil, mining, and Russian officials. (Reporting and editing by Nia William and Ross Colvin; Reporting by Patricia Zengerle)
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Oil prices remain unchanged despite uncertainty surrounding US-Iran peace agreement
The oil prices were little changed Friday, after a sharp drop in the previous session. Brent crude futures dropped 21 cents or 0.22% to $95.24 per barrel at 0003 GMT, after falling 2.84% the previous session. U.S. West Texas Intermediate crude oil was $92.94 per barrel, down by 10 cents or 0.11% after a loss of 3.1% on Thursday. The two contracts are expected to record their first weekly gains in three weeks. WTI is up a whopping 6% after fighting flared in the Middle East, as U.S. - Iran war peace negotiations dragged on, while traffic in 'the Strait of Hormuz', where a quarter of the world’s oil passes through, remained limited. Analysts are concerned about a?falling global oil inventory that could lead to a price spike during the third quarter. Hezbollah's leader Naim Qassem, rejected on Thursday an agreement brokered by the United States between Israel and Lebanon to stop the fighting. Iran has demanded a ceasefire to be implemented in Lebanon as a precondition for any deal between Washington and Tehran. Donald Trump, the U.S. president, said on Thursday that he thought progress was being made in Israel-Lebanon and that Lebanon deserved peace. In a recent note, IG analyst Tony Sycamore stated that "any optimism is heavily clouded by a tangled net of headlines and anti-headlines." Technically, as long (WTI crude oil) remains above the trendline support of the low $80s the risks are skewed?towards the upside." Secretary General Haitham al Ghais stated on Thursday that OPEC will stick to its forecast of 1.2 million barrels of oil per day growth for this year despite the conflict in the Middle East and the closure of the 'Strait of Hormuz. According to shipping data the U.S. blockade has largely been responsible for this decline, but the weak demand from China also contributed to lower prices. (Reporting and editing by SonaliPaul; Florence Tan)
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NHK reports that Japan plans to upgrade its nuclear power plants to increase the supply of electricity.
NHK, the public broadcaster, reported that Japan aims to ensure a stable power supply by rebuilding between two and five nuclear reactors. The proposal, which will be presented by the Ministry of Economy, Trade and Industry during a meeting about nuclear policy, reflects an increased reliance on atomic power to help "meet increasing energy demand and reduce expensive fuel imports." After the Fukushima disaster in 2011, Japan closed its?54 nuclear reactors due to public concern about safety standards. 15 of the 33 units which are still operational have been restarted. Tokyo revised its energy policy last year to maximize the use of nuclear energy. Many reactors are nearing or have exceeded their 60-year lifespan, which raises concerns about the future of nuclear power, even if idled plants are restarted. NHK reported that the government is aiming to improve predictability by setting concrete replacement goals for utilities. Data centres and AI are expected to drive a sharp rise in demand for electricity. According to the current energy plan, Japan is aiming to increase the share of nuclear power in its electricity mix from 9.4% to 20% by fiscal 2020. NHK reported that the?draft policies will be discussed this Friday, before being adopted at a meeting of ministers later in the summer. (Reporting and editing by Sonali Paul; Chang-Ran Kim)
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Russia and Uzbekistan begin construction of nuclear power plants
The Kremlin announced that Russia and Uzbekistan began building a nuclear power plant in Uzbekistan. It is the first one of its kind in post-Soviet Central Asia. This will help meet the growing demand for energy in the region. The Kremlin announced late Thursday that Russian President Vladimir Putin, Uzbek president Shavkat Miziyoyev and other officials had met in St Petersburg to discuss the annual economic forum of Putin. The project is situated in Uzbekistan’s Jizzakh Region (central-eastern region), which borders Tajikistan and Kazakhstan. The design of the plant combines two types?nuclear?reactors: two large units that can produce 1,000 megawatts per unit and two smaller?modular?reactors, each generating about 55 megawatts. Putin stated that the Russian nuclear state corporation Rosatom is building the nuclear power plant, which will meet around 15% of Uzbekistan’s electricity demand. The project includes small modular reactors and Russian technology. Putin said to Mirziyoyev, "The fact that Russia is working with Uzbekistan on a high-tech project of this magnitude shows the strong friendship and alliance we have between our countries. It also demonstrates how the Russian-Uzbek partnership has developed successfully and dynamically." Last month, Russia signed an agreement to build the country's first nuclear power station at a cost estimated at $16.5 billion. The loan was partially funded by Moscow. Moscow sees Central Asia as a region?rich in resources? and?critical minerals?, and its traditional sphere of interests, at a moment when China and the United States also expand their influence.
ADNOC-Led Consortium Makes $18.7B Bid to Buy Australia’s Santos
Australia's second-largest gas producer Santos said on Monday it intended to support an all-cash $18.7 billion takeover bid from an international consortium led by Abu Dhabi's National Oil Company (ADNOC), which wants to grow a global gas business.
Santos shares jumped 11% by the close on Monday, but that was well short of the 28% premium offered against their previous close, which analysts said reflected risks that the deal may not win regulatory approval in Australia.
ADNOC's investment arm XRG with Abu Dhabi Development Holding Company (ADQ) and private equity firm Carlyle proposed to offer $5.76 (A$8.89) per Santos share. The stock last traded at A$7.72.
Taking into account net debt, the deal gives Santos an enterprise value of A$36.4 billion, which would make it the largest all-cash corporate buyout in Australian history, according to FactSet data.
"For ADNOC, this is in line with their aggressive growth plans," said Kaushal Ramesh, vice president, gas and LNG research, at Rystad Energy.
The takeover bid emerged as oil prices reached multi-week highs as Israel and Iran traded air strikes, sparking concerns oil exports from the Middle East could be widely disrupted.
With Santos in its fold, the XRG-led consortium would gain control of two Australian liquefied natural gas operations - Gladstone LNG and Darwin LNG, as well as stakes in PNG LNG and the undeveloped Papua LNG. Santos' interests in Papua New Guinea are considered its most prized assets.
The company is also developing an oil project in Alaska, Pikka, due to start producing in mid-2026.
XRG said in June it aims to build a gas and LNG business with capacity of between 20 million and 25 million metric tons a year by 2035. Santos last year sold 5.08 million tons of LNG, with more than 60% of that from Papua New Guinea.
"What ADNOC really wants is the LNG assets, since they are inside the Asia Pacific basin. Since their plan is to expand in LNG, they will want assets close to where the future of demand lies," Rystad's Ramesh said.
Australian Treasurer Jim Chalmers, who makes the ultimate decision on major takeovers based on advice from the Foreign Investment Review Board, declined to comment on whether he had any concerns about an ADNOC-led takeover of Santos.
"It would be a big decision," he said in an interview with Australian Broadcasting Corp TV.
Santos said the latest offer came after it had rejected two previous proposals made by the consortium in March at $5.04 and $5.42 per share that were not made public.
Its board said if a binding offer is made it "intends to unanimously recommend that Santos shareholders vote in favour of the potential transaction, in the absence of a superior proposal."
The XRG consortium said it was negotiating to carry out due diligence with Santos on an exclusive basis before formalising the offer which would need at least 75% support from Santos investors.
"The proposed transaction is aligned with XRG's strategy and ambition to build a leading integrated global gas and LNG business," it said in a statement.
XRG, which was set up in November, last month acquired a stake in an offshore gas block in Turkmenistan. ADNOC has also struck several international deals for assets to sit under XRG, including gas and LNG interests in Mozambique.
Regulatory Hurdles Could Be Steep
Santos said the deal required approval from Australia's Foreign Investment Review Board (FIRB), Australian Securities and Investments Commission, National Offshore Petroleum Titles Administrator, PNG Securities Commission, PNG Independent Consumer and Competition Commission and Committee on Foreign Investment in the United States (CIFIUS).
XRG said it would maintain Santos' headquarters in South Australia, in a move to try and appease some regulators.
MST Marquee senior energy analyst Saul Kavonic said FIRB approval "may be a major risk to the deal" as Santos controls significant critical energy infrastructure in Australia.
Any spin-off of domestic infrastructure assets to potentially satisfy regulators would be difficult, as the facilities are saddled with decommissioning costs, he said.
Santos rejected a $10.8 billion offer from private equity-backed Harbour Energy in 2018 and walked away from talks with its bigger Australian rival Woodside Energy WDS.AX last year to create a possible A$80 billion oil and gas giant, saying it would look for other ways to bolster its value.
In February it reported a nearly 16% fall in underlying annual profit in 2024 and cut its dividend by 41%.
While Santos has long been a takeover target, Kavonic said a competing bid "is very unlikely as only ADNOC may be willing to pay such a premium to realise their global LNG ambitions."
($1 = 1.5425 Australian dollars)
(Reuters - Reporting by Scott Murdoch in Sydney and Emily Chow in Singapore, additional Shivangi Lahiri in Bengaluru; Editing by Kim Coghill and Sonali Paul)