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Brent reaches $100 after renewed Gulf conflict, while AI propels Asia stocks to a weekly rise
As the U.S. exchanged "fire" with Iran in the Middle East the oil prices rose, while stocks fell. However, many equity markets in Asia were on track for stellar gains this week due to booming AI demand. Benchmark Brent crude futures rose about 1% to $101 per barrel, while European shares fell 0.9%. As the results came in, traders were also keeping an eye on Labour Party's losses, which could put pressure on Prime Minister Keir starmer. Sterling was up a little, while British bonds and shares traded in line with their European counterparts. Middle East Clashes The United States and Iran clashed over the Gulf, and the UAE was again attacked in a test for a month long ceasefire. However, the warring parties played down the situation and left investors in the dark. Jan von Gerich is the chief analyst at Nordea. "But I don't think there will be an agreement." "I still believe there will be disruptions along the Strait of Hormuz for some time to come and that it won't get resolved anytime soon." The stock markets in Europe fell. STOXX 600, the pan-continental index, was down by 0.9%. Major bourses of Frankfurt and Paris also fell by a similar amount. The stock markets in 'Asia', which had been surging thanks to the strong revenue and expenditure plans of the U.S. AI Hyperscalers (which will benefit the region’s chipmakers) have slipped from record highs. The MSCI index for Asian stocks outside Japan dropped 1%. However, the KOSPI of South Korea rose 0.1%. This represents a gain of 13.5% in a week, the biggest since 2008. Taiwan's benchmark rose 7% and Japan's Nikkei gained 5.4% this week. The European benchmark is heading towards a weekly drop of 0.1%. Dollar inches lower Currency markets were generally steady, with the dollar slightly falling and headed for its second consecutive weekly loss. However, the yen was still in the spotlight. Japan intervened on the foreign exchange markets during the early May holidays to prevent further declines in the battered yen, according to a source with knowledge of the matter. The dollar fell 0.1% last week to 156.8 Japanese yen. It was on track for its second consecutive weekly decline against Japan's currency. However, it was unable to maintain gains above 155, after surges due to suspected interventions to the tune of $70 billion since Thursday. The euro was worth $1.1742. The euro bought $1.1742. U.S. JOBS & UK ELECTIONS IN CENTER A survey of economists indicates that investors are waiting for the U.S. Non-farm Payrolls Report on Friday. The jobs report is expected to show an increase in April of 62,000, after a rebound in March of 178,000, according to?the survey. Nordea's von Gerich stated that the labour market is still doing well. The payrolls report may not be as important as in the past, since the focus is now on the Middle East, and inflation is more of a factor than growth in the U.S. The ruling Labour Party suffered heavy losses in the local government elections held across Britain, even though Prime Minister Starmer stated that he would not be resigning. Analysts at ING said that "Gilts have already been under scrutiny because of inflation risks and the addition of political uncertainty could push (global investors) to look elsewhere." Britain's 10-year?yield remained at 4,936% on the same day, but was still close to its three-decade-high. TARIFFS The U.S. Trade Court ruled that Trump's latest 10% temporary global duty is unjustified by a trade law from the 1970s. Analysts expect an appeal to be filed quickly and that the overall impact of U.S. levies will be minimal. Treasury yields tracked crude oil prices higher on Thursday, as traders were worried about inflation. However, they did not move significantly more on Friday. The benchmark 10-year yield was at 4.38%. Bitcoin is heading towards its sixth consecutive weekly gain at $79 680. (Reporting and editing by Tom Westbrook, Lincoln Feast, Elaine Hardcastle, Kim Coghill)
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China increases retail fuel prices starting May 9.
China announced on Friday that it would raise the price caps of gasoline and diesel, one month after it curbed the price increases. The country is trying to control the inflationary effects of the Iran War and the closure of the Strait of Hormuz. The?country’s state planner announced on Friday that maximum retail gasoline prices and 'diesel will rise by 320 Yuan ($47.05), per metric tonne, as part of an ongoing price review. Retail diesel prices will also increase by 310 Yuan per metric tonne. China is the world's?second-largest consumer of oil. It has a diversified oil supply network and an oil stockpile. Last month, it limited the price increases for gasoline to around half of China's usual increase. The National Development and Reform Commission (NDRC) said that PetroChina, Sinopec and CNOOC, as well as other crude oil processing companies, should organize the production and transportation of refined products to ensure a stable supply on the market and adhere to the national price policy.
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Iron ore declines on higher shipments but still records fourth weekly gain
Prices of iron ore futures fell slightly on Friday as higher shipments from Brazil, Simandou and other countries weighed on the prices. Meanwhile, hot metal production has reached its peak, so there is little room to increase feedstock demand. The daytime closing price of the most traded September iron ore contract at China's Dalian Commodity Exchange was 814.5 Yuan ($119.73). The contract still gained 3% in this week's trading, marking the fourth consecutive week of an increase. As of 0729 GMT, the benchmark June iron ore price on Singapore Exchange was down 0.28% at $110.45 per ton. The contract is up 2.56% so far this week, and will also be a fourth straight weekly gain. According to Mysteel, hot metal production fell due to the Chinese May Day holiday. However, blast furnaces continue?to operate at near-peak rates, supporting a?demand for feedstock used in steelmaking. Zhongtai futures, a Chinese broker, says that peak hot metal production will test the ability of the world's biggest steelmaker to absorb its inventory. According to government statistics, Brazilian iron ore exports increased by a year in April from 30,07 million to 34.57 millions tons. A union official and a document seen by the?consortium led by China's Baowu Resources? have confirmed that mining operations were resumed at two blocks in Guinea's giant Simandou Iron Ore Project on Thursday after workers ended their strike. Coking coal and coke, which are both steelmaking ingredients, have also been lagging behind. They fell by 0.69% apiece. The benchmarks for steel on the Shanghai Futures Exchange have fallen. Rebar fell 0.06%; hot-rolled coils dropped 0.29%; wire rods lost 0.64%, and?stainless metals slumped by 2.51%. According to a Shanghai Metals Market note, stainless steel inventories?in China restocked after weeks of continuous destocking. Production output exceeded trading volume, which pushed prices down. $1 = 6.8027 Yuan (Reporting and editing by Harikrishnan Nair, Mrigank Dhaniwala).
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Toyota to suffer $4.3 billion in losses from Iran War
Toyota, the world's largest automobile manufacturer, warned on Friday that the fallout of the Iran War would cost the company $4.3 billion in this fiscal year. This is one of the most serious warnings to date about the impact of the crisis. Toyota has reported a nearly 50% decline in quarterly earnings, and expects to see a full-year loss of 5% in the just-started year. This is due to rising costs from the war and supply problems. These factors outweighed the surge in demand for hybrid cars. This year, the automaker anticipates hybrid sales to surpass 5 million for the first ever time. The results show the uneven impact of the Middle East Crisis, as higher energy prices are driving customers towards fuel-efficient vehicles but not in sufficient numbers to offset the cost pressures. Toyota reported an operating loss of 1.1 trillion yen for the period ending March 31. This compares to a profit of 569.4 yen (3.6 billion dollars) a year ago. It expects to make an operating profit in the current fiscal period of 3 trillion yen. This was a far lower forecast than the median of 4,59 trillion yen in a LSEG survey of 23 analysts. Toyota shares declined after the report, and ended at a low of?around 2,2%. Kenta Kon told a press briefing that it was not necessary to stop completely but rather identify waste and change structures one-by-one, implementing reform. Kon praised Toyota for its ability to produce nearly 3.8 trillion in operating profit during the fiscal year just ended despite major changes in the operating environments. MIDDLE EST IMPACT Toyota stated that the Middle East Crisis will have an impact totaling 670 billion yen (4.3 billion dollars) on the year ending March 2027. This was higher than the estimates of'many major companies, including airlines. Toyota estimates a full-year cost of 400 billion yen due to higher fuel and material costs and around 270 billion from lower volumes. Energy prices are on the rise again, adding to the pain for an industry that is already struggling with U.S. Tariffs and Chinese automakers. Volkswagen CEO Oliver Blume stated this week that tariffs are a burden on the German Group's operating profits of $5.9 billion a year. Toyota announced last week that its sales in?the Middle East? fell sharply in?March after?shipments into the region were disrupted. This is the first outlook issued by Toyota since Kon took over. He faces the challenge to steer the automaker around the impact of U.S. president Donald Trump's tariffs that cut operating profits in the just-ended year by 1.4 trillion Japanese yen.
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Australian shares fall as Middle East tensions reignite curb risk appetite
Australian shares fell on Friday, wiping?gains made in the previous two?sessions. The market was flooded with broad-based sales after the latest exchange of fire between Iran and the United States rattled the sentiment. The S&P/ASX 200 ended the week 1.5% lower, at 8,744.40. The benchmark index rose 0.2% in the past week despite the drop, but it still remained below the record highs set early in March. Investors concluded a week that saw the Reserve Bank of Australia raise its interest rates a third time in this year. The U.S. escalated hostilities with Iran, and the mood deteriorated over night. David Tuckwell is the chief investment officer of?ETF shares. He said that new clashes have dashed hopes for a diplomatic solution and caused investors to flee to safety. Mining stocks fell ?1% on declining metal prices. BHP, Rio Tinto and Fortescue, global mining giants, all fell by 1%, 0.8% and 0.7%, respectively. Banks fell 2.3%. Westpac, the largest lender, was the worst performer on the sub index after trading ex dividend, with the other "Big Four' banks ending 1.5% to 2.9% down. Tuckwell said that a weakening macroeconomic outlook combined with an increasingly hawkish central banking system, which has already raised rates three times this year, put pressure on banks. Macquarie, the top Australian investment bank, reversed its course and ended 1.1% lower after hitting a record high in the previous session. Its commodities arm also posted its highest annual profit in 3 years amid Middle East volatility. Energy stocks fell 1.6%. Woodside Energy, Santos and other oil?and -gas firms both fell 1.4%. Tabcorp, the betting firm, fell 14.2%. This was a continuation of losses that had already been incurred after it plunged more than 23 percent in the previous session. S&P/NZX 50 index fell 0.7% in New Zealand to 13,175.13, but the benchmark gained 1% over the past week.
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Acerinox Steels tops expectations for earnings in Q2
Acerinox, a Spanish company, reported earnings for the first quarter of its fiscal year that were above market expectations on Friday. This was due to?improved? orders in Europe and America. The stainless steel manufacturer reported core earnings of 140 million euros (119 million euros) for the third quarter. LSEG polled analysts who expected earnings to average?113.4 millions euros. The company estimated the direct impact of the Middle East war on its quarterly core profits at 2 million euros. It added that the 'rising costs of raw materials and energy' weighed heavily on margin recovery in Europe. Acerinox? stated that the increase in orders and decrease in imports would lead to higher core earnings in the second quarter. Acerinox's U.S. mills, which account for the majority of its earnings have benefited from protectionist measures taken by President Donald Trump, such as tariffs of 50% on steel imports, that protect it from competition. Acerinox is set to benefit from increased protection in its two main markets, thanks to the European Union's carbon-?levy on imports of high-emission products and a?coming trade policy that will halve import quotas.
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Profits for Evonik Germany are up as the Iran conflict leads to stockpiling by customers
Evonik, a German chemicals company, reported a first-quarter profit that was above expectations. This was due to short-term stockpiling by customers in response supply disruptions caused by the conflict in the Middle East. Essen-based Evonik said that it had seen a surge in sales due to supply chain?uncertainty related to the Iran War, echoing comments made by Dutch peers dsm and firmenich during first quarter. The group stated that "this is not due to an actual increase in demand, but rather due to the purchase of inventory as customers try to protect themselves against supply chain disruptions and rising prices." Evonik reported that orders for high-performance polymers, lubricant add-ins and cross-linkers which improve material durability, have increased. Jefferies analysts said they expect the share price to rise after the group shows "strong results and good momentum". Evonik expects its second-quarter core profits to increase 8% over the previous year to at least 647 million euros, making it the strongest fiscal quarter. The report also noted that inflation is on the rise, and a drop in demand in the second half will lead to lower volumes. Evonik's adjusted first-quarter earnings before interest taxes, depreciation and amortization (EBITDA), fell 15% to 475?euros. This was better than the analysts' expectations of 448?euros from Vara research. Since years, the?German chemical industry, which is the third-largest in Germany, has struggled with a subdued market, high?energy prices, supply chain problems, and a slow economy. Evonik stated that it was forced to increase prices due to the rapid rise in raw material and energy costs. Evonik will cut 1,000 jobs this year to manage costs as part of a 'ongoing restructuring program. In February, the group changed its dividend policy to one euro per share - its lowest level since 2014.
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Oil prices rise on Gulf clashes, as AI fuels weekly stock increase
As the U.S. and Iran traded?fires in the Middle East many Asian markets were still on track for stellar gains this week as AI 'demand' swept over chipmakers. Benchmark Brent crude futures rose about 1% in Asia to $101 per barrel, while European stock?futures fell 0.8%. FTSE futures dropped 0.7% while S&P futures rose 0.3%. Sterling remained steady at $1.3575, but traders were wary of Labour Party losses, which could put pressure on Prime Minister Keir starmer. The United States and Iran clashed over the Gulf, and the UAE was again attacked in a test for a month-long truce. However, the warring parties played down the situation in order to keep investors hopeful. Kerry Craig, J.P. Morgan Asset Management's global market strategist said: "The focus is still on the strength and volume of earnings from the U.S." He said that efforts by both sides to reach a temporary agreement to allow traffic to pass through the Strait of Hormuz, while they discussed a more comprehensive peace settlement, had also been encouraging to markets. The stock markets in Asia have slid from record highs, despite the fact that they had been surging thanks to the strong revenue and spending plans of the U.S. AI Hyperscalers. This means rivers gold for the chipmakers in the region. MSCI's broadest Asian share index outside Japan dropped 0.9%. South Korea's KOSPI was down only 0.1%, but is set to have a 'weekly gain' of more than 13% – the largest since 2008 – on the back of a surge of Samsung and SK Hynix. Taiwan's benchmark index is up 7% and Japan's Nikkei has risen 5.2% this week. The currency markets were largely stable, with the dollar recovering after recent lows and yen as the focus. Japan intervened on the foreign exchange markets during the early May holidays to prevent further declines in the battered yen, according to a source with knowledge of the matter. The dollar was worth $1.1736 to the euro, $0.7221 to the Aussie and the yen at 156.8 to the yen after a surge of $70 billion on suspicion of intervention since last Thursday. China's currency, the yuan is Asia's best performing currency since the outbreak of the war. It's on the verge of surpassing 6.8 dollars to the dollar, and it's at its highest level since 2023. U.S. JOBS & UK ELECTIONS IN CENTER A survey of economists indicates that investors are eagerly awaiting Friday's non-farm payrolls data in the United States. The report is expected to show a 62,000 increase in jobs in April, after a 178,000 rebound in March. Local elections are also planned in Britain. Investors are worried that if the Labour Party's results turn out to be poor, it could put Prime Minister Keir starmer's leadership into doubt. Analysts at ING said that "Gilts - already under scrutiny because of inflation risks - could be further pushed to look elsewhere by political uncertainty." The U.S. Trade Court ruled that Trump's latest 10% temporary global duty is unjustified by a 1970s trade law. Analysts expect an appeal to be filed quickly and that the levies will have a?small impact on U.S. trade. Treasury yields tracked crude oil prices higher on Thursday, as traders were worried about inflation. However, they did not move significantly more on Friday. The benchmark 10-year yield was at 4.39%. The yields on Australian 10-year bonds jumped by six basis points, to 4.99%. Bitcoin was edging towards its sixth consecutive weekly gain at $79 680. (Reporting and editing by Tom Westbrook, Kim Coghill, and Lincoln Feast.
HSBC still sees AI as a positive for China's software stocks despite the global jitters
Analysts at HSBC said that China's software industry is likely to benefit from the?rapid implementation of artificial intelligence. This will counter investor concerns about AI disrupting or undermining demand for traditional software suppliers.
China's software stock prices are now trading below historical averages due to fears that enterprise software could be replaced by large language models. HSBC stated that these concerns are now overstated, and have been largely factored in.
"We believe AI presents opportunities to the software industry rather than a threat," HSBC Analysts Yiran Liu, and Heng Zhu said in a note published on Thursday. They cited software firms' familiarity of business workflows, regulations, and data security - areas where AI models have still limitations.
The report is released as global software stocks and services?have been under pressure this past year, after the release new AI tools by Anthropic rekindled concerns about disruption. With the?S&P 500 Software and Services index down approximately 15% year-to date.
HSBC stated that lower AI model 'costs' and gains in coding efficiency help Chinese software companies develop products faster, add features, and adapt business models.
The brokerage has also suggested that alternative pricing methods, such as outcome- or workflow-based charging could support earnings growth, as AI adoption accelerates.
HSBC prefers Intsig, a provider of smart text?recognition and ArcSoft - a company that provides imaging algorithms - among individual stocks.
The brokerage began coverage of both companies with the word "buy", citing AI's ability to be monetised through new applications and overseas expansion.
HSBC has also identified Kingdee and Yonyou, two enterprise software companies as potential 'beneficiaries' of the rising demand for AI-native enterprise planning tools.
The brokerage reported that AI-related orders increased among Chinese software companies, and now account for about 7% of the total revenue in 2025 on average, up from 6% at the beginning of the year.
HSBC noted that overseas markets were also becoming a major growth driver. They noted a higher 'willingness to pay' for AI-powered subscription software.
HSBC stated that AI has become a "new growth engine" for China's Software Sector. They added that a strong AI order trend combined with a recovery in earnings could lead to a revaluation of the sector. (Reporting and editing by Sumana Niandy in Bengaluru)
(source: Reuters)