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Indian shares sell off alongside global stock market as US tariffs cause recession fears
Indian shares sold off on Friday amid fears of a global economic recession due to the U.S. tariffs. They had largely avoided the storm during the previous session because the duties on India were lower than those on its competitors. As of 10:51 a.m. IST the Nifty 50 was down 1.17% at 22,977.85, and the BSE Sensex fell 0.97% to 76,552. On Thursday, they fell by a very mild 0.4%. The Asian share market fell by 0.8% today, following a 0.7% drop on Thursday. This was after Trump imposed a 10% tariff on all imports as well as higher rates for several trading partners. India received a retaliatory tax of 27%, which is lower than China, Vietnam, and Bangladesh, who all had levy rates higher than 34%. "While India is in a better position than its peers in terms of trade, global trade uncertainty has increased, and we believe that markets will be volatile in the short term," said Umesh Gaupta. He is the fund manager at Ambit Global Private Client and the head of PMS equity. After a minimal impact the previous session, the mid-cap and smaller-cap indexes also fell 3% and 3.5% respectively. The drug industry fell 6% following Trump's alleged threat to impose tariffs at "levels not seen before" on pharmaceutical products. After the sector was exempted of tariffs, it more than erased Thursday's gains of 2.3%. Fears of a drop in client spending due to tariffs have led IT companies to fall 3%. This is on top of their previous 4.2% decline. These fears have also led to a drop in crude oil prices, which has dragged the energy sector down by 3.3%. Reliance Industries, which is heavily weighted in energy, dropped by 3.5%. It was one of the largest drags on Nifty 50. HDFC Bank, on the other hand, jumped by 2% following an encouraging report for the prior quarter. It kept the financial sector afloat. (Reporting and editing by Janane Venkatraman, Sonia Cheema and Vivek M.)
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As Trump tariffs cause recession fears, US Treasuries rise as shares fall
The financial markets were gripped with recession fears on Friday as stocks continued a punishing selloff in response to U.S. President Donald Trump’s sweeping tariffs. This helped drive a rally for U.S. Treasuries, and supported gold near its record high. Wall Street stock prices have suffered their worst performance in 24 hours, since the COVID-19 Pandemic. Investors are struggling to catch their breathe. After Trump announced Washington's most severe trade barriers in over 100 years on Wednesday, investors scrambled for safe havens such as government bonds, yen, and gold. Investors' nerves have not been eased as the week comes to an end. U.S. Stock Futures indicated further weakness. Nasdaq futures fell 0.7%, while S&P500 futures dropped 0.66%. This came after S&P 500 Companies lost a total of $2.4 trillion overnight in stock market values, their largest one-day loss ever since the global coronavirus outbreak hit markets on March 16th, 2020. Other Wall Street Indexes also suffered sharp drops. The futures of the FTSE and DAX also fell by 0.32%, 0.52% and 0.53% respectively. Japan's Nikkei fell 3.4%, and was on track to lose almost 10% for the entire week. This is its worst performance since March 2019. MSCI's broadest Asia-Pacific share index outside Japan dropped 0.5% on a thin market, as markets in China Hong Kong and Taiwan were closed for holidays. The index was expected to drop more than 2% in the coming week. David Bahnsen is the chief investment officer of The Bahnsen Group. He said that if tariffs remain unchanged, a recession in Q2 or Q3 is possible as well as a bear market. The question is whether President Trump wants to take these policies off the table if we experience a stock market bear market. We think Trump will pivot and focus on companies making significant investments in America, but it is unclear if that would change the market sentiment. Investors have flooded into safe-haven bonds, causing yields on U.S. Treasury bonds to fall. Bond yields are inversely related to bond prices. The benchmark 10-year Treasury rate hit a low of 3.970% six months ago, and the yield on two-year Treasury notes also reached its lowest level in October at 3.6200%. In response to the increased fears of a global economic recession, especially in the United States of America, traders have bet on more Federal Reserve rate reductions this year. They believe that policymakers will have to ease up more aggressively in order to boost growth in the largest economy in the world. Fed Funds Futures point to a reduction of over 100 basis points by December. This was closer to 70 basis points just before Trump announced his tariffs on Wednesday. David Doyle, Macquarie Group's head of economics, said that central banks were not equipped to handle stagflation because the effects of lower growth and higher inflation push policy in opposite directions. This means that a stronger core inflation will likely limit the extent of the Fed's policy response due to the headwinds for growth created." Investors will be watching for Fed Chair Jerome Powell's speech on Friday. They are interested in his assessment of the U.S. economic situation and the outlook on policy following Trump's latest tariff salvo. The risk-sensitive Australian dollar and New Zealand dollar both fell more than 1% on the foreign exchange markets. The dollar fell 0.3% to 145.68 yen after falling 2.2% the previous day, the steepest daily decline in over two years. The euro gained 0.38%, to $1.10935, after a 1.9% increase on Thursday. Meanwhile, the Swiss Franc advanced 0.7%, to $0.8530, after also gaining 2.6% the previous session. The dollar was near its six-month low of 101.67 against a basket. The U.S. Dollar has been weakening this year due to the accumulation of long positions at the end of last year, as well as the renewed focus on U.S. economic growth risks which have accompanied the tariff talks for several weeks. Spot gold, meanwhile, was nearing a record high of $3,096.37 per ounce, and on course for a fifth consecutive weekly gain as concerns about the impact Trump's tariffs would have on the global economic system boosted its appeal as a safe-haven metal. The oil price, which is a proxy of economic activity, continued its steep fall from the previous session. Brent futures dropped 0.93% to $74.49 per barrel while U.S. West Texas Intermediate Crude futures declined 1% to $66.30 per barrel. Both are on course for their worst weeks in months
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The Wall Street most at risk from lost trust is MORNING BID EUROPE
Wayne Cole gives us a look at what the future holds for European and global markets. The Nikkei has dropped 3% today and 9.6% this week. This is the largest drop since March 2020 when the pandemic began. Wall St futures began steady, but have since fallen around 0.7%. European stock futures have also dropped between 0.3% and 0.6%. The dollar has lost 2.7% against the yen, 3.0% versus the Swissy and 2.4% versus the euro. The USD is not benefiting from tariffs. Investors are not surprised by the sudden changes in U.S. foreign policy. If you wage a trade war without provocation on your allies or opponents, with no apparent goal other than to extract money and favours, you shouldn't be shocked when you don't make it onto their Christmas cards. Analysts have noted that for decades, global investors have allocated 70 percent of their equity funds to U.S. shares, far above the 26% of global GDP that is accounted for by this economy. Money could flow in the opposite direction if this preferred status was lost, for example, by starting a trade war on a global scale. The amount involved dwarfs any dollar boost from the U.S. purchasing fewer imports. It also squeezes foreign investors who have unhedged Wall Street positions - which is most of them. What firm would be willing to risk its capital in order to encourage more investment in U.S. Manufacturing when the White House has the power and ability change the rules at any time? The problem is exacerbated by the notion that the punishing tariffs are a bargaining tactic that can be moderated as long as countries pay Trump enough. It's fine to be unpredictable in game theory, but it is not acceptable when you are a company investing billions in a long-term investment. Apple is a good example. Apple's supply chain is deeply embedded in Asia where tariffs range between 24% and 54%. If it were to move some manufacturing to the States - a huge ask - the iPhones that resulted would be priced at multiples of their current price. Apple's large profit margins make it better equipped than others to absorb tariffs in the short term. But it is those margins, which are comparable to Kobe beef, that have pushed the stock price so high. Spare a thought for Fed, which is caught between a nearly certain rise in consumer prices as well as the growing risk of recession due to the reductions made by consumers and business. Fed fund futures have risen 9 basis points today for December, which implies 99 basis points in cuts this year. This is a sure sign that the markets believe rising unemployment will overshadow (sorry!) the rise in inflation, and force the Fed into easing. Bet Fed Chair Powell really looks forward to his speech about the economy that will be delivered later today. The following are key developments that may influence the markets on Friday. - EU construction PMI, German industrial orders, UK PMI - Addresses of Fed Chair Powell and Governors Waller & Barr US payrolls report - March
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PMI data shows that the growth of non-oil businesses in UAE slowed down in March.
A survey released on Friday showed that growth in the UAE’s non-oil sector slowed in March. This is a sign of a softerening in demand in the most diversified economy in the Gulf. The S&P Global Purchasing Managers' Index slipped from 55.0 to 54.0 in February. This is the lowest growth rate since September. The new order index fell to 56.3 from 57.3 in the previous month. This is the lowest reading since October. David Owen, S&P Global Market Intelligence's senior economist, said that some firms may be having difficulty meeting their sales goals. In spite of the slowdown, companies increased their input purchases to the highest rate since July 2019 in order to reduce backlogs. The employment rate has fallen to its lowest level in almost three years, as businesses struggle to find qualified candidates. Some firms reported higher costs for materials, while others saw lower transport prices. Dubai's private non-oil sector experienced a similar slowdown in march, with the headline PMI dropping to 53.2 in March from 54.3 in Feb. The number of new orders increased sharply, but at a slower pace. This led to a rare decrease in employment. The UAE's firms are optimistic about the future, thanks to strong pipelines and infrastructure development. Hugh Lawson, Editor and Reporter (Reporting)
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Norway and Spain Form Steel Collaboration for Offshore Wind
Norway’s offshore wind association Norwegian Offshore Wind has signed a memorandum of understanding (MoU) with the Galician Association of Metal Industries and Related Technologies (ASIME) to explore joint opportunities in offshore wind.The MoU states that Spain and Norway have distinct but complementary strengths in floating offshore wind, creating opportunities for collaboration.Their supply chains can work together by combining Spain’s strong industrial manufacturing, steel production, turbine expertise, and logistics infrastructure with Norway’s expertise in offshore engineering, floating structures, marine operations experience, and harsh-environment operations.The main objectives of the MoU are exploring opportunities for joint projects and networking activities where mutually beneficial and promoting sustainability, cost reduction, and efficiency improvements in offshore wind projects through advanced metal technologies.“This collaboration will be aimed specifically at the steel industry, which is instrumental both for floating and bottom fixed offshore wind,” says Einar Tollaksvik, leader of the Working Group for Spain in Norwegian Offshore Wind.“Galicia is one of the best positioned European regions for the implementation and development of the offshore wind industry, because we have the necessary experience throughout the value chain, while we have a unique installed port capacity.“Our companies are very well positioned internationally; in fact, of the only five floating wind farms implemented in Europe, three have Galician components and technology. This agreement is one more step to continue positioning our region as an international offshore wind hub.“The synergies that we will be able to develop with our Norwegian partners will be of great interest for both parties to deepen the development of projects and new business opportunities in both territories,” added Enrique Mallón, Secretary General of ASIME.
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ASCO Gets Repsol’s Base and Logistics Services Contract in Norway
Global integrated logistics and materials management specialist ASCO has been awarded a three-year contract, with options, to provide base and logistics services for Repsol Norge in Tananger and Farsund in Norway.The agreement covers a comprehensive range of services, including warehouse management, cargo handling, waste services, transport and customs clearance, as well as personnel support for logistics, materials management, and helicopter coordination."We are grateful to Repsol for continuing to trust ASCO with its base and logistics services. This contract reinforces our strong partnership and allows us to further develop as a company while remaining a preferred and proud supplier to Repsol.WIt also strengthens our existing operations in Norway, providing a solid foundation for continued collaboration. We remain committed to simplifying, streamlining, and digitising logistics delivery to enhance efficiency and service quality."Repsol has been a key customer for ASCO in Norway since 2011, and this new contract ensures job security at ASCO’s bases in Tananger and Farsund, reinforcing ASCO’s position as a leading logistics provider in the region,” said Øyvind Salte, Commercial Director at ASCO Norge.
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Gold drops as risk appetite wanes on Trump's tariff clarification
Gold prices dropped on Friday, as investors reassessed risk in light of U.S. president Donald Trump's new tariffs. These measures have clarified market trends and raised concerns about economic slowdown. As of 0305 GMT, spot gold was down by 0.5%, at $3,097.99 per ounce. Gold was still on course for a five-week gain. Its safe-haven appeal helped gold reach three records this week. U.S. Gold Futures declined by 0.1% to $3.118.90. Gold dropped by more than 2% in the previous session as traders were weighed down by a wider market decline sparked Trump's tariffs on imports. This sharp drop came only hours after the record-breaking gold price of $3167.57. Ilya Spirak, global macro head at Tastylive, said that gold tends rally during times of uncertainty and difficulty in pricing. However, once the markets have learned how to value the risks involved the support tends to fade. The Trump administration has chosen a path that is less contested and more visible. It's also easier to price. This is reducing some of the "market confusion premium" on gold. Trump announced that he would impose an initial 10% tariff on all imports into the U.S., and a higher duty on some of America's largest trading partners. Tariffs sparked fears that prices would rise dramatically in the largest consumer market. Analysts said that Federal Reserve officials who were seeking more information on Trump's plans for trade got more than they expected when he announced sweeping tariffs. They noted that this could drastically reshuffle the outlook of the country's economy. The market is now awaiting the U.S. Non-Farm Payrolls Report, which may provide insight into the Fed's rate path. Spot silver fell 1% to $11.56 per ounce. Platinum dropped 0.6% at $946.40 and palladium declined 0.8% at $920.75.
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London copper to suffer its biggest weekly loss for nearly five months due to US tariffs
After U.S. president Donald Trump announced an extensive set of tariffs that dampened the outlook for global metal demand, copper prices fell in London on Friday. The London Metal Exchange's three-month copper contract fell 0.75%, to $9296.5 per ton at 0234 GMT. The contract is on track for its largest weekly loss since early November. It has lost 5% thus far. ANZ analysts wrote in a report that the prospect of a trade war around the world and a weaker economy should continue to put downward pressure on commodities markets. ANZ warned that these concerns would worsen if the countries impacted retaliated with their own tariffs, resulting in a global war of trade. Trump announced a set of tariffs that targeted China and other major trading partners. Beijing announced on Thursday that it would take countermeasures against the new tariff of 34%. This will bring the total to 54%. The White House did not include copper. For this metal, the U.S. Administration is conducting a separate investigation into possible new tariffs. The reciprocal tariffs will not apply to certain minerals not available in the U.S. The exclusions included zinc and tin. ING analysts said that despite the fact that base metals are exempt from the new tariffs, the concern about how the new tariffs will affect the demand for raw materials has weighed on the sentiment. Other metals include LME aluminium, which fell by 0.37%, to $2.439 per ton. Lead also dropped 0.23%, to $1.951. Zinc edged lower by 0.07%, to $2.711.5. Tin was down 1.64%, at $36,720, and nickel eased 0.8%, at $15.720 per ton. China's financial market is closed for the public holiday on Friday. Trading will resume Monday, April 7. Click here to see the latest news in metals, and other topics. (Reporting by Michele Pek. Editing by Eileen Soreng).
Leonardo, Enel, and Ansaldo in Italy reach agreement on joint nuclear venture
Gilberto Pichetto Fratin, Italy's Minister of Energy, announced on Thursday that Leonardo - a defence company -, Enel - a utility – and Ansaldo Energia – a power generation company – have agreed to form a company to investigate the use nuclear energy.
Pichetto, speaking at a conference held in Milan, said that Enel will contribute its expertise to the management of nuclear power plants in Spain while Leonardo can explore the use nuclear energy for the military.
"In its first phase, Enel’s head of nuclear innovations, Luca Mastrantonio will concentrate on a feasibility report to select the best technology in nuclear energy," he said.
The conservative government of Italy approved earlier this year a law that paved the way for a return to nuclear power, which was prohibited by referendum in 1987.
Pichetto, who spoke at the conference via videolink, said that "the regulatory framework is likely to be finished in two and half years."
The Italian government says that small modular reactors are the best option for a return of nuclear power, but critics claim it will take over 10 years before they're ready. Francesca Landini is the reporter. Alvise Armllini and Mark Potter edited the article.
(source: Reuters)