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How financial markets have been affected by the Middle East conflict in six months
The U.S.-Israeli bombings of Iran six months ago triggered a global conflict that disrupted energy supplies and sent ripples throughout global financial markets. Below are charts that show the impact of the conflict on?oil prices, food prices, safe-haven assets, and equities. 1 COSTLY ENERGIA As Gulf production was disrupted, and shipments through Strait of?Hormuz were curtailed, oil prices soared. Brent crude briefly reached $120 in April, and will still average about $90 by 2026. This is up from $70 in the previous year. The biggest impact was on refined fuels. Diesel prices are rising more rapidly due to a shortage of middle distillates and Russian refinery shutdowns caused by Ukrainian attacks. The Gulf was a major source of jet fuel, but a surge in U.S. exports and refinery production helped to ease the supply concerns. The upcoming winter in the northern hemisphere could see further disruptions to Hormuz shipments, along with threats to Russia's energy grid. This would likely increase heating oil prices and inflationary pressures. 2 AI BOOM STOCKS The AI sector, which has received trillions of dollars in investment, has helped to boost global stocks. The MSCI 47-country index of world stocks has reached a record high of $105 trillion this month. It is up almost $7 trillion or 9% since the outbreak in war. However, the Gulf region's stocks have not performed as well. Fidelity Analyst Pranav Aggarwal stated that the rally was a sign of investors taking a more "relaxed" view and expecting the war to be over this year. He said, "Equities have had a pretty good year." "They are up about 14% (for the year). "If we expect 8%-9% growth in a normal year, 14% through August is pretty impressive." 3 GOING IN SEARCH OF SAFETY The traditional safe-haven assets, like highly rated government bond, gold, and the US dollar, have not consistently performed as such. Analysts said that the dollar's?rise of 1.4% against a basket major currencies has occurred since?the beginning of the war, but much of this is due to the Japanese yen’s weakness. U.S. Treasuries, a mainstay of portfolios for decades, have fallen 3.5% in total returns as inflationary pressures have shattered U.S. rate-cut bets. Recent concerns over the new Federal Reserve Chief Kevin Warsh's plans to buy back debt and Washington’s recent surprise debt buyback plan have also weighed. The price of gold fell by nearly 25% from the beginning of the conflict to July, despite the fact that it had tripled since 2022, when Western powers frozen Russia's central banks reserves due to the invasion of Ukraine. Gold prices have risen by more than 15 percent this month amid renewed fears about the devaluation of the dollar. Food and Fertilizers Fertiliser, an important input in global food production, has been affected by the closure of Strait of Hormuz. Analysts say that the shock is a threat to agricultural production, especially when combined with the strong El Nino weather pattern and the recent disruptions in grain shipments due to the conflict in Ukraine. According to the U.N. Food and Agriculture Organization, food prices increased in July by more than 3 years. Experts warn that the full impact of this is still to come. FAO warned that the world may be headed towards another bout of inflation. JPMorgan estimates a strong El Nino could increase global food inflation to 0.7% at its peak. Impacts are likely to be most acute in Asia, Latin America, and Africa, where households spend more of their income on food, and policymakers are wary of new price pressures. 5 GULF CLUBBED The Gulf region has suffered a direct blow. Saudi Arabia's exports dropped by 10% between the first and second quarters. JPMorgan believes that Dubai's real estate sales have plummeted by 70% to 80%. Oxford Economics predicts that Qatar's economy is going to shrink by almost 30% this year due the damage done to its Ras Laffan Gas Facility. Qatar and UAE stock prices have both fallen around 14%, a drop of more than 20 points compared to world stock prices. Both countries' insurance costs against default have also increased, but Bahrain is the hardest hit as its credit default swaps prices are up by almost 40%. Reporting by Karin Strohecker & Marc Jones. Mark Potter edited the article.
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South Africa's Harmony increases dividends after profit surge
Harmony Gold posted an 87% increase in its annual 'profit' on Thursday. Higher gold prices helped to 'offset the impact of lower output and grading, allowing it to pay out a record-breaking dividend. Harmony, South Africa’s largest gold producer with a stake in copper, reported that its headline earnings per shares were 43.63 rands ($2.73) for the year ended June 30. This is up from 23.37 rands in the previous?year. The company said that it would pay a dividend of 7.50 rand per share, which is nearly five times the payout last year. The company was able to benefit from a 35% rise in the average gold price. This helped to soften the impact on the lower gold production, which dropped 3% to 1,43 million ounces compared to last year's financial year. Gold price XAU= has risen sharply this year. This is due to central bank purchases, increased investor demand and heightened geopolitical tensions. Harmony's new CSA mine, which it acquired in Australia, produced 18,207 metric tons of copper. This was above its target. Harmony?acquired?the CSA mine in October 20, 2025. This acquisition expands its copper portfolio which includes the Eva copper project?in Australia and the Wafi -Golpu?project?in Papua New Guinea that is jointly owned by Newmont. Harmony has diversified into the copper industry, a critical metal for electric vehicles and power grid infrastructure. This is to capitalize on a growing global demand. Reporting by Olivia Kumwenda Mtambo, Nelson Banya and Rashmi?Aich; Editing Muralikumar Anantharaman
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Morning bid Europe-Jensen on the market: we're back!
Gregor Stuart 'Hunter' gives us a look at what lies ahead for the European and Global markets. It's Nvidia now. We just live there. The chip designer has forecast a 70% increase in revenue for the next fiscal year. This is a rare announcement from the largest?company? of sales that far in advance. CEO Jensen Huang also expressed confidence that the demand for AI chips would continue to grow until early 2028. The stock rose almost 5% after hours, with little sign that it would slow down. This was after The Information reported that Nvidia had?agreed' to pay $12.9 Billion to purchase AI platform Hugging face. According to an independent investigation, OpenAI hacked into this open-source platform last month, creating a swarm consisting of 700 AI agents who tried to hide their tracks. OpenAI has revealed more details about its rogue agents. One of these is that the bots they created later broke into their own networks during tests that went wrong. All of this is good news for Asian chipmakers who are part of Nvidia's supply chains, however unsettling it may be to humanity. MSCI's broadest Asia-Pacific index outside Japan rose 0.5%. The KOSPI, the largest component of the index, grew 1.8%, despite a Bank of Korea rate hike of 25 basis points. S&P 500 e-mini futures climbed 0.5%. Brent crude oil was down 0.5% to $87.40 in the oil markets. It is expected to continue to drop for a 4th consecutive day, as Qatar's Prime Minister heads to Tehran to try to restart peace talks between Iran and the U.S. Gold rose 0.7% to $4,624.14 following a Wednesday 'pullback'. In cryptocurrency markets, Bitcoin was up 0.5%, at $78,822.84, while Ether climbed 0.8%, to $2,492.30. The three companies are all benefiting from a revival of so-called "dollar?debasement trades", after the U.S. Treasury Department intervened last week in the bond?markets. This month, they have risen by 14%, 25% and 34%, respectively. Early European trades saw pan-regional futures up 0.4%. German DAX 'futures' edged higher by 0.1%, while FTSE?futures?were down by 0.4%. The following are key developments that may influence the markets on Thursday. Earnings announcements Marvell Technology, Royal Bank of Canada and Pernod Ricard Economic Events Germany GfK/NIM consumer sentiment for September France: Producer Prices and Unemployment Data for July Euro Zone Money-M3 Annual growth for July (Reporting Gregor Stuart Hunter, Editing Saad Sayeed).
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After devastating flash floods, global aid is heading to Nepal
Nepal has begun receiving 'cash','relief supplies and other aid from countries and organizations around the world as it responds to a flash flood which killed over 160 people and left many more missing. Here is the list of all aid and assistance that has been announced, as well as delivered: China has coordinated emergency supplies as well as?cash aid to Nepal. China's ambassador to Nepal stated this in a post on the social media website X. EUROPEAN UNION : European Commission President Ursula von der Leyen said on X that the EU was ready to "mobilise additional European assistance". India's Foreign Ministry announced that India had sent 10 metric tonnes of supplies to help with disaster relief, including temporary shelters and blankets as well as hygiene kits, solar lights, and medicines. INTERNATIONAL FEDDERATION OF THE RED CROSS AND REDCRESCENT SOCIETIES UNITED STATES : According to the State Department, U.S.?was supplying funds of $500,000 and a disaster response advisor?to Nepal. WHO Nepal reported on X. $1 = 0.8052 Swiss Francs (Compiled by Hritam?Mukherjee, edited by Christian Schmollinger).
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Zinc prices increase due to tight supply
The thin supply outside China and the exchange position boosted zinc prices for a 7th consecutive session on Thursday. Benchmark three-month Zinc on the London Metal Exchange?was?up 0.92% to $3,929 per metric ton at 0300 GMT. The most traded zinc contract at the Shanghai Futures Exchange rose 1.69% to 26,700 yuan (US $3,972.68) per ton. On Wednesday, the LME reached its highest level in over four years. The metal is mainly used for galvanising steel. The impressive rally of the metal, which was boosted by a 'waning stock outside China', echoes last October. The LME's cash-to-3-month spread The physical availability was tight, as evidenced by the $198.95 price backwardation. The International Lead and Zinc Study Group reported that the global refined market for zinc swung to a deficit during June. Total?LME stock At 97,325 tonnes, the 'lows' of the October squeeze were still twice as high. This led some analysts to downplay any impact of the shortage of supply, and instead point to the support of a sharp rise in speculative position on the LME. Sandeep?Daga is the head of research for Metal Intelligence Centre. He said: "Yes, there are physical tightening outside China but it's not as bad as in last year, and current prices do not justify them." Copper, which is also supported by the thinning of inventories, rose 0.37% at?the LME, but fell 0.21% at the SHFE. Market participants are watching Wednesday's U.S. inflation data, which shows that the war-induced decline in inflation has paused. This is likely to intensify interest rate debates by the U.S. Federal Reserve. Copper prices have been driven by expectations of higher interest rates for longer periods, due to concerns that this could slow down economic activity and impact demand. Aluminium?added 0.48 %, while lead fell by 0.1%. Nickel?added an additional 0.34%, and tin gained 7.4 %. Aluminium, lead, nickel and tin all lost ground on the SHFE.
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Asian stocks are up for a third day after Nvidia beats expectations
Stocks climbed at the beginning of Thursday's Asia-Pacific session, as Nvidia beat expectations. This boosted tech hardware manufacturers' confidence and revived investor confidence after overnight data showed that the Federal Reserve preferred U.S. Inflation measure was still hot. MSCI's broadest Asia-Pacific index excluding Japan rose 0.7% and is on course to extend gains for a third day in a row after Nvidia announced that its quarterly revenues had more than doubled, and forecasted third-quarter revenue well above Wall Street expectations. In after-hours trades, the AI chipmaker's stock jumped by 4.7%. This lifted S&P 500 e-minis futures 0.4%. Chris Weston said, "The business has a very healthy future," the head of research for Pepperstone Group. It's going to make people think, 'what did I miss?' The story is really bullish and those who supply Nvidia via the supply chain will likely benefit today." South Korea's KOSPI grew by 1.5% after Bank of Korea increased interest rates to 3%. This was in line with the market expectations that a rise would be made. Taiwanese stocks rose by 0.9% while Nikkei shares fell 0.4%. The S&P 500 closed flat overnight after the PCE index showed a 0.2% increase in July, compared to the previous month. Analysts from Societe Generale wrote: "July core PCE was broadly in line with expectations but the details were more firm." The inflation outlook therefore appears to be firmer going into the FOMC meeting in September. The yield on a 10-year Treasury bond in the United States was down by 1.5 basis points to 4.647%, as markets waited for Fed Chair Kevin Warsh’s speech on Friday at Jackson Hole, Wyoming for more clues about the direction of U.S. rates. Brent crude fell 0.7% at $87.20. The benchmark is on course to drop for a 4th consecutive day, as Qatar's Prime Minister prepares to travel to Tehran to try to restart peace talks between Iran and the U.S. Westpac analysts reported that "crude oil prices continue to ease, despite the highly uncertain outlook regarding the Strait of Hormuz management and the health of the global oil supply. This is especially true in light of new threats of escalation by Putin during the Russia-Ukraine conflict." The U.S. Dollar Index, which measures greenback strength against a basket of six currencies held at 99.12, close to its highest level over the past week. After a slight pullback on Tuesday, gold rose?0.7% at $4,624.14. Bitcoin was up 0.8% to $79,043.18, and ether was 1.3% higher at $2,504.96. The U.S. Treasury Department's intervention in the bond market last week has benefited all three. (Reporting and editing by Thomas Derpinghaus; Gregor Stuart Hunter)
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Australia's South32 records 55% surge in annual profit, misses estimates
Australia's South32 posted a 55% increase in its full-year profits on Thursday, but missed the market consensus. The diversified miner benefited from an upsurge in commodity prices, and a strong operating performance. The underlying earnings for the Chilean coppermine Sierra 'Gorda increased from $758?million to $276?million due to higher realized?metal? prices. The division reported a 3% decline in annual payable 'copper equivalent' production. Matt Daley, South32's CEO, said that "Cannington and Sierra Gorda's operational performance enabled the Group to benefit from higher prices in copper, silver and zinc, supporting increased earnings as well as cash flow for our base metals businesses." South32 announced a final dividend per share of 5.4 cents, higher than the 2.6 cents declared last year. South32, which is the world's largest manganese producer reported earnings of $1.03bn for a year ending June 30 compared to $666mn in a year prior. Visible Alpha's consensus estimate of $1.05bn was slightly higher. Reporting by Sherin sunny and Nikita Marie Jino in Bengaluru, Editing by Leroy Leo
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Trump signss order banning certain foreign equipment from US grid
On Wednesday, President Donald Trump issued an executive order declaring a state of national emergency and prohibiting the use of certain?foreign technology in?the United States. The White House announced that the electricity grid. The White House cited what it called an "unusual, extraordinary threat" from foreign bulk-power systems which could pose national security vulnerabilities. Trump's order is the latest example in Washington's 'approach' to combating technology threats from China. It follows an earlier decision made by the European Commission to ban Chinese-made energy inverters. U.S. experts who dismantled equipment connected to grids in order to test for security problems found rogue communication devices in some Chinese solar inverters. In the 'order, Trump stated that he found that foreign-supplied bulk-power system electrical equipment posed a threat to national security, foreign policies, and the economy of the United States. This threat was originating in part or in full outside of the United States. I hereby declare an emergency with regard to this threat. The 'order' prohibits certain foreign-produced bulk power system electric equipment and associated digital capabilities, which could pose cybersecurity or operational risk, from being bought or installed in the United States. White House: The order also requests that the U.S. Energy Secretary impose conditions on the use and operation such equipment in response to concerns raised by the Trump Administration.
Russell: Crude oil imports from Asia remain soft in August, despite US claims about the Hormuz blockade
Asia's crude oil imports in August were still far below levels before the Iran conflict began, which raises questions about how much crude actually leaves the Middle East.
According to Kpler's data, the top-importing continent will see arrivals of 23,12 million barrels a day (bpd). This is a slight decrease from July, when 23.36 million bpd was recorded.
Imports are also down by almost 4 million barrels per day (or 14%) from the average of 26.91 million barrels per day in the three-month period ending February.
The United States and Israel launched an attack on Iran on 28 February, prompting Tehran to respond by launching missiles and drones against U.S. infrastructure and bases across the Gulf. This led to a closure of the Strait of Hormuz which was responsible for the movement of nearly 20% of crude and refined oil and products in the world before the war.
The U.S. Energy Sec. Chris Wright's claim that oil flows through the Strait of Hormuz have increased and that Middle East total oil exports are almost back to pre-conflict level is challenged by the still low arrivals of crude in Asian ports.
It is obvious that there is a delay between the time crude leaves the Middle East and when it reaches ports in Asia. But if Wright's estimate of 15 million barrels per day leaving the Middle East is accurate, then it is logical that deliveries will reflect an increase.
Wright has not provided specifics for his claims. However, he stated in early August, that flows from the strait over an unspecified period of seven days were 9 million barrels per day. This brings the total Middle East exports to 15 million barrels per day when the Red Sea and Gulf of Oman shipments are included.
Kpler was able, using satellites and AIS data, to track the most vessels leaving the Strait of Hormuz during any given week in August. This was 4,26 million bpd for the seven-day period beginning August 3.
Kpler's data for August shows that crude oil exports via the Strait of Hormuz were 2.3 million barrels per day, down from the 4.49 million barrels per day in July. This was a drop of 15.82 million barrels per day in the months prior to the U.S.-Israeli attacks on Iran.
INDIA FLOWS
India is the major importer closest to the Middle East. Any sharp increase in exports would be seen first in Indian port arrivals, as the journey time from the Gulf of Oman up to India's West Coast is less than a week.
Kpler estimates that India's crude imports in August were 4.51 million barrels per day, down from the 5.07 million barrels per day of July, and at their lowest level since March.
The arrivals from the Middle East have been estimated at?1,45 million bpd. This is down from July's 1,50 million bpd but still just under half the average of 2.88 million for the three-month period ending in February.
The import data indicates that there are no strong exports coming from the Middle East.
In August, Asia saw an increase in the number of barrels per day (bpd) imported from the Middle East. This was up from 10.76 bpd in July.
Asia's imports of goods from the Middle East are up from 7.01 million bpd (the lowest Kpler record dating back to 2013), but still lower than the 15.82 millions bpd during the three months prior to the start of the conflict.
Arrivals in July and Augurary were also likely boosted due to cargoes that had left the Middle East during the brief ceasefire that took place between the U.S.
If 15 million barrels per day of crude oil have been leaving the Middle East from early August onwards, then a large portion of that will show up in September arrivals. This is especially true for countries that require longer travel times, such as Japan, South Korea, and China.
There is still no evidence that Asia's crude oil imports from the Middle East have returned to their pre-Iran conflict levels.
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(source: Reuters)