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Santos says gas tax proposal caused reputational damage to Australia
Santos' head said that Australia's reputation for being a stable destination for energy investments was damaged by the proposal to impose 25% tax on gas exports, even after the federal government had backed away from it. Kevin Gallagher, CEO of Santos, said that the tax proposed by lawmakers was motivated by "activism", rather than by economics. He said that "common sense" prevailed when the centre-left Labor Government backed away from the tax proposal. He warned that the prospect of taxing energy projects with long-term lives had unnerved foreign investors. He said that repeated interventions and 'threats of changes' had created anxiety among foreigners, on whose capital Australia relies to fund large oil & gas developments. He said that capital flows to countries where they feel "welcomed and safe", and instability of policy could divert investments elsewhere. Gallagher, speaking at an event in Sydney, said: "It is impossible to underestimate the damage done." Gallagher reiterated his concerns that global markets had underpriced geopolitical risks, stating that investors hadn't fully factored the potential volatility of the?U.S. and Israeli war against?Iran. He warned that expectations of a rapid resolution were overly optimistic. The conflict could continue, "delaying the stabilisation of markets and keeping commodity prices volatile as strategic reserves will eventually need to be built up." He said: "There is a belief that everything will return to normal very quickly. The markets will be balanced, and everything will return to normal." "I don't think so." (Reporting and editing by Thomas Derpinghaus; Byron Kaye)
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Gold recovers from a five-week low, but inflation worries cap gains
Gold prices rose on Tuesday, but gains were modest as crude oil prices remained high and inflation fears remained alive. After a drop of more than 2% on Monday, spot gold increased 0.3% by 0417 GMT to $4,533.40 an ounce. U.S. gold futures for delivery in June rose 0.2% to $4,542.50. Ilya Spirak, the head of global macro at Tastylive, said that prices seem to have digested a little after the return of "war trade" across markets on Monday. Gains were however capped by the rise in Treasury "yields" and the dollar as an increase in crude oil stoked inflation concerns. Spivak stated that this weighed against gold, which is non-interest bearing and anti-fiat. Brent crude was hovering?above $113 per barrel, as the U.S. continued to negotiate a truce with Iran while exchanging blows in the Strait of Hormuz. The U.S. Military said Monday that it destroyed six Iranian small vessels and intercepted Iranian drones and cruise missiles, as Tehran tried to thwart the new U.S. Naval effort to?open shipping through Strait of Hormuz. Dollar-priced materials become more expensive to holders of currencies other than the U.S. dollar. While higher crude oil prices can increase inflation, they also increase the probability of higher interest rates. Gold is a good inflation hedge but high interest rates can make other assets more appealing. Markets now see a 37% chance that the U.S. interest rate will increase by March 2027 compared to 27% a week ago. Investors are now awaiting a number of important U.S. data this week. These include job openings, the ADP employment report and April payrolls. Silver spot was unchanged at $72.73, platinum rose 1% to $1964, and palladium gained 0.8%, reaching $1,492.27. (Reporting and editing by Rashmi aich and Subhranshu Sahu in Bengaluru.
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Indian shares fall, rupee falls to record low due to high oil prices
On Tuesday, Indian shares dropped and the rupee reached a new low as investors assessed March-quarter earnings. As of 9:56 a.m. IST, the?Nifty 50 index was down 0.45% to 24,010.20 and the BSE Sensex fell 0.41% at 76.954.34. The rupee has reached a new low. Brent crude soared to an intraday peak of $115.3 per barrel on Monday, after Iran intensified?attacks against the UAE and vessels in the Middle East Gulf region, including several in the Strait of Hormuz. Oil prices remain high despite the fact that they have dropped to $113 early on Tuesday due to a'signal the U.S. Navy will loosen Iran's closing of the Strait. The third largest importer of crude oil in the world, higher?prices for crude are negative as they increase inflationary pressures. They also drag down economic growth and corporate profits. The resumption in hostilities along the Hormuz Strait, and the subsequent rise in oil prices, are headwinds to the markets, said VK VK Vijayakumar. He added that the rupee's slide is not favourable for foreign?flows. The foreign outflows of Indian equity have already exceeded the 2025 record outflows. Twelve of the sixteen major sectors posted losses on?the day. Small-caps and mid-caps, which are broader, were less affected. Financials dropped 0.75%. The top two stocks of the benchmark indexes, HDFC Bank and ICICI Bank, each fell 1%. Larsen & Toubro lost 1.3% before its quarterly results, later that day. Drugmaker?Wockhardt has risen 10.5% in the March quarter after swinging into a?profit. After reporting a profit increase of more than twice as much in the fourth quarter, Realtor Sobha rose 3.6%.
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What is freedom? What is freedom?
Rae Wee gives us a look at what the European and global markets will be like tomorrow. The operation "Project Freedom", led by U.S. president Donald Trump, hasn't started off well. The U.S. flagged Alliance Fairfax, operated by Maersk, may have left the Gulf via the Strait of Hormuz with U.S. Military assets. The U.S. also claimed to have destroyed six small Iranian boats. An oil port in United Arab Emirates that hosts a large U.S. base was also set on fire by Iranian missiles. Seoul's Foreign Ministry said, however, that the authorities would investigate the cause of the fire on a South Korean operated ship in the Strait. Shipping?in the Strait of Hormuz is largely at standstill. Tuesday's markets were in a precarious state due to the fragility of the U.S./Iran ceasefire. Stocks in Asia fell and oil prices remained well above $100 a barrel. The Westpac Banking Corporation in Australia was the latest to warn of the dangers posed by the Middle East conflict, after reporting lower than expected?first-half profits. The global energy crisis is causing governments in Asia to suffer more and more as they scramble to find alternate fuel sources in order for their economies not be affected by the worst. Data on Tuesday revealed that the Philippine's annual inflation rate accelerated to its highest level in three years in April. A surge in fuel prices raised the possibility of further policy tightening. The earnings season has also begun, with the likes of Pfizer and AMD set to announce their results later that day. S&P Global Market Intelligence data shows that 83% of S&P500 companies have already released results and have beaten their EPS estimates. 78.2% also exceeded their revenue estimates. A number of 'central bankers from the Bank of England and the European Central Bank, as well as the Federal Reserve, are due to speak at various events. This follows the policy meetings last week, where several turned more hawkish. Tuesday's key?developments: Sam Woods, Bank of England speaks Christine Lagarde, Philip Lane and the European Central Bank speak Michael Barr, Federal Reserve and Michelle Bowman talk - Earnings from AMD, Pfizer KKR PayPal AMC Entertainment Job openings in the U.S.
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PMI: Growth in the UAE's non-oil private sectors slows down as Iran War weighs on it
A?survey on Tuesday showed that the UAE's private non-oil sector expanded at the slowest rate since February 2021, as the Iran War?hammered tourism and shipping, impacting sales and exports. The S&P Global Purchasing Managers Index for the UAE fell from 52.9 to 52.1, but remained in growth territory over 50. The subindex fell to 52.5 from 54.5 in March, the lowest reading in over five years. The drop in foreign sales, excluding the pandemic season, was the biggest since the survey started in August 2009. The output still increased?strongly but at a slower pace. This was helped by the existing infrastructure and project work. The purchasing growth was'modest' as high costs, weak sales, and supply constraints slowed demand. David Owen, Senior Economist at S&P Global Market Intelligence, said: "The non-oil sector in the?UAE?showed a further decline in momentum during April. Operating conditions showed their lowest performance since more than five year," "That said... the strength of the non oil private sector, as highlighted by yet another increase in output, means that companies expect to see growth continue for the next twelve months." The International Monetary Fund said in April that energy disruptions caused by the Iran War will have a 'heavy impact' on the economies of Gulf oil and natural gas exporters. In April, the UAE experienced a sharp increase in price pressures. Input cost inflation reached its highest level since July 2024 and sales prices rose at their fastest rate since June 2011. Expectations for the coming year have risen to a 3-month high. The headline PMI for Dubai, the region's main business and tourism center, fell to 51.6 from 53.2 in march, a 55 month low. However, more firms expressed optimism regarding a recovery of demand conditions in general. (Reporting and editing by Hugh Lawson; Staff Reporting)
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Indian shares open lower due to rising oil prices; rupee falls to record low
Indian shares opened lower on Tuesday, as investors assessed March quarter corporate earnings and a rise in 'crude oil' prices due to the Middle East conflict. As of 9:15 a.m. IST the Nifty 50 index was down 0.28% to 24,052.60 while the BSE Sensex fell 0.21% to 77,103.72. Brent crude soared to a intraday high of $115.3 per barrel on Monday, after Iran increased its attacks against the UAE and vessels in the Middle East Gulf region, including several in the Strait o'Hormuz. Oil prices remain high despite signs that the U.S. Navy may be easing Iran's strait closure. The world's third largest importer of crude oil is negatively affected by higher prices, which add to inflationary pressures. They also drag down economic growth and corporate earnings. At the opening, 11 of 16 major sectors fell. Small-caps and mid-caps both fell by 0.1% and 0.3% respectively. The rupee fell to a record low after U.S. and Iranian strikes in the?Gulf rattled?markets and dampened expectations of a peaceful resolution.
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Philippine inflation at three-year high confirms rate hike path
Philippine annual inflation increased to a 3-year high in April as fuel prices surged?as a result of the Middle East conflict, raising the possibility of further policy tightening. The statistics agency announced on Tuesday that consumer prices increased 7.2% last month. This is the highest rate since March 2023. This was higher than the median forecast of 5.5% in an economist poll. The central bank had forecast a range between 5.6% and 6.4% for April. Emilio Neri is the lead economist for Bank of the Philippine Islands. He said the BSP might be forced to hold another off-cycle and raise rates in order to stem inflation. "Yes, we will not rule out a strong intermeeting increase." In this volatile environment, we can't rely solely on the supply-side?solutions. Because the Philippines is heavily dependent on Middle -East oil, it is vulnerable to price fluctuations and supply shocks during times of geopolitical conflict. The average inflation rate for the first four month of this year is now 3.9%, increasing the pressure on the Philippine Central Bank as it nears the upper limit of their 2%-4% range. According to government data, diesel inflation rose by 122.7 percent and gasoline inflation by 60 percent in the last month. The statistics agency reported that higher food, transportation and utility costs were also responsible for the increase in consumer prices last month. The inflation rate was 2.6% on a monthly basis, which is the highest since 26 years. The 'Bangko ng 'Pilipinas raised its interest rate last month to 4.50% in order to curb rising inflation. They warned that inflation would likely reach 6.3% by the end of this year. Governor Eli Remolona hinted at the possibility of a further rate increase to combat price pressures. The next meeting of the central bank's policy committee will be held on June 18. The last 'off-cycle' meeting was held on March 26. It was the first Asian central bank to hold one. Last month, the annual core inflation rate (which excludes volatile energy and food prices) was 3.9%.
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Gold recovers from a one-month low, but inflation worries cap gains
Gold prices increased on Tuesday after a session low of more than one month. However, gains were 'limited' by high oil prices, which kept inflation concerns alive and impacted the outlook for U.S. rates. As of 0230 GMT, spot gold was up by 0.5%, at $4,541.39 an ounce. In the previous session, gold fell by more than 2% and reached its lowest level since last March 31. U.S. Gold Futures for June Delivery rose?0.4% at $4,550.70. Ilya Spirak, global macro head at Tastylive said that prices are settling down after the return to the "war trade" across the markets sent gold lower on Monday. Gains were however capped, as "yields" and the dollar rose as crude oil's rebound stoked inflation concerns. This weighed against gold that was not interest-bearing or anti-fiat, said Spivak. Brent crude oil was hovering above $113 per barrel, as the U.S. continued to negotiate a truce with?Iran while exchanging blows in the Strait of Hormuz. Dollar-priced materials become more expensive to holders of currencies other than the U.S. dollar. While higher crude oil costs can increase inflation, they also increase the probability of higher interest rates. Gold is considered a hedge against inflation, but high interest rates can make other assets with higher yields more appealing, which reduces its appeal. Markets now see a 37% likelihood of a U.S. Federal Reserve hike in March 2027 compared to 27% who expected a rate reduction a week ago. U.S. and Iran launched new attacks in the Gulf on Sunday as they fought for control of the Strait of Hormuz through maritime blockades. This shook a fragile ceasefire. The?U.S. The?U.S. Investors are now awaiting a number of important U.S. statistics this week. These include the ADP Employment Report, April payrolls data, and U.S. Job Openings. Silver spot edged up 0.4% to $73.03 an ounce. Platinum gained 1.3% at $1,970.85 and palladium rose 1.2% to $1,497.91.
NAACP files suit against xAI for alleged illegal operation of gas-turbines
The largest U.S. Civil Rights group sued xAI and a subsidiary on Tuesday, claiming that they operated illegally more than?two dozen gas turbines to power Colossus '2 data center in Mississippi, posing a?health risk to local -residents.
Earthjustice, the Southern Environmental Law Center and the?NAACP represented by Earthjustice sued xAI, a subsidiary of MZX Tech and alleged that they had violated the federal Clean Air Act, by operating 27 gas-fired generators without obtaining the necessary air permits to power xAI?s?Grok?chatbot.
Elon Musk’s artificial intelligence startup xAI invested more than 20 billion dollars to build a data center in Southaven, with the full support of Mississippi Governor Tate Reeves. However, the facility, along with Colossus 1 located just across the border in Memphis Tennessee, have met with heavy opposition from local communities because of their impact on air and environmental quality.
"By trying to evade clean air laws in order to operate dirty turbines which emit pollution and carcinogens known to be harmful, these companies follow a shameful and familiar pattern, asking Black and frontline community to bear the toxic burden of 'innovation'," said Abre Conner, Director of the Center for Environmental and Climate Justice of the?NAACP.
The NAACP announced in February that it would sue xAI, MZX and other companies under the Clean Air Act. This Act requires 60-days notice before filing a suit.
After only a few days' notice, Mississippi regulators held a public hearing in that month to discuss?permits? for these turbines. They then approved the permits.
xAI did not respond to a request for comment immediately.
Earthjustice?said xAI's Southaven plant could emit over 1,700 tons of smog causing?nitrogen dioxides (NOx) every year. This is a major smog source in the broader Memphis area. The power plant is also expected to emit up to 180 tons of fine particles, 500 tons carbon monoxide and 19 tons cancer-causing formaldehyde. (Reporting and editing by David Gaffen; Valerie Volcovici)
(source: Reuters)