Afp Business Asia

European and Asian stock markets traded mixed Thursday as investors assessed the outlook for the global AI-fuelled rally, Federal Reserve interest rates and the US government shutdown.News that Israel and Hamas had agreed to the first phase of a Gaza ceasefire dampened oil price and defence stocks while gold, seen as a safe haven investment, retreated one day after hitting an all-time high above $4,000 an ounce.The dollar firmed against main rivals.”Risk sentiment remains high, US stocks closed at record highs on Wednesday, as traders continue to dismiss fears of a bubble in the AI trade,” noted Kathleen Brooks, research director at XTB trading group.Technology firms have been riding to ever-higher levels this year — dragging equity markets with them as companies pump hundreds of billions of dollars into all things linked to artificial intelligence. But there is growing concern that the returns may not match the investment sums, leading to warnings that valuations may have gone too far. “AI is clearly a bubble,” warned Neil Wilson at Saxo markets. “The question is when — not if — it blows up. And timing is incredibly hard.”Global politics was another main focus for traders Thursday.Israel and Hamas have agreed a Gaza ceasefire deal to free the remaining living hostages, in a major step towards ending a war that has killed tens of thousands of people and unleashed a humanitarian catastrophe.In Asia, the Tokyo stock market closed up 1.8 percent after business-friendly Sanae Takaichi recently became leader of Japan’s ruling party.Paris rose slightly in midday deals as French President Emmanuel Macron races to find a new prime minister after the resignation of Sebastien Lecornu tipped the country deeper into political crisis.In the United States, Republicans and Democrats appeared no closer to reaching a deal to reopen the government as the row goes into a second week.Democrats voted for a sixth time to block a Republican stopgap funding measure to reopen government departments.Democrats refuse to back any funding bill that does not offer an extension of expiring health care subsidies for 24 million people.Minutes from the Fed’s latest interest-rate meeting meanwhile showed divisions among policy makers over cutting borrowing costs.On the corporate front, shares in HSBC slid in London and Hong Kong after the global banking giant said it planned to buy the remaining 27 percent of its subsidiary Hang Seng Bank for around US$14 billion.- Key figures at around 1045 GMT -London – FTSE 100: DOWN 0.4 percent at 9,515.19 pointsParis – CAC 40: UP 0.2 percent at 8,077.35Frankfurt – DAX: UP 0.3 percent at 24,664.56Tokyo – Nikkei 225: UP 1.8 percent at 48,580.44 (close)Hong Kong – Hang Seng Index: DOWN 0.3 percent at 26,752.59 (close)Shanghai – Composite: UP 1.3 percent at 3,933.97 (close)New York – Dow: FLAT at 46,601.78 (close)Euro/dollar: DOWN at $1.1616 from $1.1628 on WednesdayPound/dollar: DOWN at $1.3379 from $1.3401Dollar/yen: UP at 152.72 yen from 152.64 yenEuro/pound: UP at 86.84 pence from 86.78 penceBrent North Sea Crude: DOWN 0.5 percent at $65.90 per barrelWest Texas Intermediate: DOWN 0.6 percent at $62.18 per barrel

Markets were mixed on Thursday as investors tried to assess the outlook for the global AI-fuelled rally, Federal Reserve interest rates and the US government shutdown.News that Israel and Hamas had agreed to the first phase of a Gaza ceasefire provided some relief from geopolitical concerns, while gold retreated the day after hitting an all-time high above $4,000.Technology firms have been riding to ever-higher levels this year — dragging equity markets with them as companies pump hundreds of billions of dollars into all things linked to AI. But there is growing concern that the returns might not match the investment sums, leading to warnings that valuations may have gone too far. “AI is clearly a bubble,” warned Neil Wilson at Saxo markets. “The question is when — not if — it blows up. And timing is incredibly hard,” he said.”(Software giant) Oracle had a stab at pricking the bubble yesterday by disclosing that the margins from its AI cloud business — including server rentals using Nvidia chips — are very slim.”Tesla added to the gravity… as it dropped 4.5 percent on (its) lower-priced Model 3/Y reveal that underwhelmed analysts. Third-quarter earnings are still set to be strong, but doubts are being seeded for later.”However, while the Oracle report dragged Wall Street on Tuesday, the S&P 500 and Nasdaq bounced back the day after to end at fresh records.In Asia, Tokyo rallied 1.8 percent on continued optimism about further stimulus following the election of business-friendly Sanae Takaichi as leader of Japan’s ruling party.Shanghai advanced as it reopened after a week-long holiday, while Sydney, Wellington, Taipei, Mumbai and Bangkok were also up, and Frankfurt opened at a record high. Paris was also higher.Hong Kong dipped along with Singapore, Manila, Jakarta and London.The US shutdown was not helping matters, with Republicans and Democrats no closer to reaching a deal to reopen the government as the row goes into a second week.Democrats voted for a sixth time to block a Republican stopgap funding measure to reopen government departments — they refuse to back any funding bill that does not offer an extension of expiring health care subsidies for 24 million people.Minutes from the Fed’s latest rate meeting showed divisions among decision-makers on cutting them, with some agreeing only after being persuaded in discussion over rising prices and a string of weak jobs figures.”Policymakers that are becoming increasingly concerned about downside risks to employment likely favour additional and faster rate cuts going forward,” HSBC’s Ryan Wang said. “Those that are more concerned about upside inflation risks are likely more circumspect about future cuts.”Geopolitical worries were eased after news that Israel and Hamas agreed on Thursday to the first phase of a deal to end the Gaza war that has killed tens of thousands and at times fanned worries of a possible wider Middle East conflict.Donald Trump announced a 20-point peace plan that would see Palestinian militant group Hamas release all hostages, while Israel would pull its troops back to an agreed-upon line. Oil prices inched up, having initially dropped on news of the deal.Gold, which hit a record of nearly $4,060 an ounce Wednesday — partly on concerns about the Gaza crisis — was slightly lower.In company news, Hong Kong-listed Hang Seng Bank soared more than 26 percent on reports that HSBC plans to take it private by buying its remaining shares. The deal values the lender at US$37 billion. HSBC tumbled seven percent.HSBC Asia and Middle East co-chief executive David Liao told reporters the plan was “an investment in Hong Kong’s development potential — a growth plan”.- Key figures at around 0810 GMT -Tokyo – Nikkei 225: UP 1.8 percent at 48,580.44 (close)Hong Kong – Hang Seng Index: DOWN 0.3 percent at 26,752.59 (close)Shanghai – Composite: UP 1.3 percent at 3,933.97 (close)London – FTSE 100: DOWN 0.4 percent at 9,513.88 Euro/dollar: DOWN at $1.1611 from $1.1628 on WednesdayPound/dollar: DOWN at $1.3352 from $1.3401Dollar/yen: UP at 153.09 yen from 152.64 yenEuro/pound: UP at 86.96 pence from 86.78 penceWest Texas Intermediate: UP 0.2 percent at $62.67 per barrelBrent North Sea Crude: UP 0.2 percent at $66.36 per barrelNew York – Dow: FLAT at 46,601.78

Asian markets were mixed Thursday as investors tried to assess the outlook for the global AI-fuelled rally, Federal Reserve interest rates and the ongoing US government shutdown.News that Israel and Hamas had agreed to the first phase of a Gaza ceasefire provided some relief from geopolitical concerns — and weighed on oil prices — while gold retreated the day after hitting an all-tine high above $4,000.Technology firms have been riding to ever-higher levels this year — dragging equity markets with them as companies pump hundreds of billions of dollars into all things linked to AI. But there is a growing concern that the returns might not match the investment sums, leading to warnings that valuations may have gone too far. “AI is clearly a bubble,” warned Neil Wilson at Saxo markets. “The question is when — not if — it blows up. And timing is incredibly hard,” he added.”(Software giant) Oracle had a stab at pricking the bubble yesterday by disclosing that the margins from its AI cloud business — including server rentals using Nvidia chips — are very slim.”Tesla added to the gravity… as it dropped 4.5 percent on (its) lower-priced Model 3/Y reveal that underwhelmed analysts. Third-quarter earnings are still set to be strong, but doubts are being seeded for later.”But while the Oracle report dragged Wall Street on Tuesday, the S&P 500 and Nasdaq bounced back the day after to end at fresh records.And Asia fought to extend the gains, with Tokyo rallying more than one percent on continued optimism about further stimulus following the election of business-friendly Sanae Takaichi as leader of Japan’s ruling party.Shanghai advanced as it reopened after a week-long holiday, while Sydney, Taipei and Manila were also up. Hong Kong dipped along with Singapore, Wellington and Jakarta.The US shutdown was not helping matters, with Republicans and Democrats no closer to reaching a deal to reopen the government as the row goes into a second week. Democrats voted for a sixth time to block a Republican stopgap funding measure to reopen government departments — they refuse to back any funding bill that does not offer an extension of expiring health care subsidies for 24 million people. Minutes from the Fed’s latest rate meeting showed divisions among decision-makers on cutting them, with some agreeing only after being persuaded in discussion over rising prices and a string of weak jobs figures.”Policymakers that are becoming increasingly concerned about downside risks to employment likely favour additional and faster rate cuts going forward,” HSBC’s Ryan Wang said. “Those that are more concerned about upside inflation risks are likely more circumspect about future cuts.”Geopolitical worries were eased after news that Israel and Hamas agreed Thursday to the first phase of a deal to end the Gaza war that has killed tens of thousands and at times fanned worries of a possible Middle East conflict.Donald Trump announced a 20-point peace plan that will see Palestinian militant group Hamas release all hostages while Israel would pull its troops back to an agreed-upon line. Oil prices, which have been elevated by worries over supplies from the region, slipped.Gold, which hit a record of nearly $4,060 an ounce Wednesday — partly on concerns about the crisis in Gaza — was slightly lower.In company news, Hong Kong-listed Hang Seng Bank soared more than 26 percent on reports that HSBC plans to take it private by buying its remaining shares. The deal values the lender at US$37 billion. HSBC tumbled more than six percent.- Key figures at around 0230 GMT -Tokyo – Nikkei 225: UP 1.4 percent at 48,405.93 (break)Hong Kong – Hang Seng Index: DOWN 0.1 percent at 26,809.57Shanghai – Composite: UP 1.0 percent at 3,921.28Euro/dollar: UP at $1.1646 from $1.1628 on WednesdayPound/dollar: UP at $1.3416 from $1.3401Dollar/yen: DOWN at 152.49 yen from 152.64 yenEuro/pound: UP at 86.81 pence from 86.78 penceWest Texas Intermediate: DOWN 0.9 percent at $61.99 per barrelBrent North Sea Crude: DOWN 0.8 percent at $65.75 per barrelNew York – Dow: FLAT at 46,601.78 London – FTSE 100: UP 0.7 percent at 9,548.87 (close)

Gold topped $4,000 an ounce for the first time Wednesday as investors flocked to the safe haven metal on worries over the US government shutdown, France’s political crisis and other global economic uncertainties.US and European stock markets rose while Asian equities fell as investors also kept tabs on the AI investment boom and the prospect of further US interest rate cuts this year.Gold, considered a safe investment in times of uncertainty, reached an all-time high of nearly $4,060 an ounce Wednesday. Silver also rose close to a record high.”Gold is continuing to glitter, and it is a gift that keeps on giving,” said Fawad Razaqzada, market analyst at City Index and Forex.com.”Markets hate uncertainty, and right now, it’s in no short supply –- although stocks haven’t exactly sold off,” he added.”Instead, it is gold that continues to benefit from haven flows while stock markets continue to find buyers on the dips too,” he added.- US political deadlock -Parts of the US government began to close last week after Democrats and President Donald Trump failed to break a deadlock over spending.Steve Clayton, head of equity funds at Hargreaves Lansdown, noted that the price of gold had doubled over the last two years.While France’s political upheaval has contributed to the gold rush, the Paris stock market rose on Wednesday.President Emmanuel Macron is facing the worst domestic crisis of his mandate following the departure of his latest prime minister over a deadlocked debate on an austerity budget.Frankfurt’s DAX was also higher following mixed economic news.The German government raised its growth forecast for 2025 from zero to 0.2 percent growth, and its 2026 projection from one to 1.3 percent.Earlier, however, official data showed a sharp decline in industrial production in August, particularly in the automotive sector.Back in New York, investors have largely shrugged off the shutdown, viewing the negative impacts as likely to be reversed once the government reopens.But Art Hogan of B. Riley Wealth Management said lingering worries about the shutdown could become more consequential once earnings season gets underway in earnest if companies express caution over their outlook.There “could be a self-fulfilling slowdown in economic growth,” Hogan said.For now, US stocks continue to drift higher. Both the S&P 500 and Nasdaq ended at records.”Traders seem to consider the shutdown no more than a mild inconvenience due to the postponement of certain economic data releases,” said David Morrison, analyst at Trade Nation.”Instead, investors continue to expect more upside in US equities, supported by ongoing investment in artificial intelligence, along with the prospect of 50 basis-points-worth of rate cuts before the year-end,” he said.Futures markets expect the Fed to cut interest rates later this month.Among individual companies, chip company Advanced Micro Devices piled on 11.4 percent, extending a rally following an announcement of a big deal with OpenAI earlier this week. Fellow semiconductor companies Nvidia and Micron also rose.- Key figures at around 2020 GMT -New York – Dow: FLAT at 46,601.78 New York – S&P 500: UP 0.6 percent to 6,753.72New York – Nasdaq Composite: UP 1.1 percent to 23,043.38 London – FTSE 100: UP 0.7 percent at 9,548.87 (close)Paris – CAC 40: UP 1.1 percent at 8,060.13 (close)Frankfurt – DAX: UP 0.9 percent at 24,497.13 (close)Tokyo – Nikkei 225: DOWN 0.5 percent at 47,734.99 (close)Hong Kong – Hang Seng Index: DOWN 0.5 percent at 26,829.46 (close)Shanghai – Composite: Closed for a holidayEuro/dollar: DOWN at $1.1628 from $1.1657 on TuesdayPound/dollar: DOWN at $1.3401 from $1.3426Dollar/yen: UP at 152.64 yen from 152.70 yenEuro/pound: DOWN at 86.78 pence from 86.93 penceBrent North Sea Crude: UP 1.2 percent at $66.25 per barrelWest Texas Intermediate: UP 1.3 percent at $62.55 per barrel

The global economy is doing better than expected, even as it faces prolonged uncertainty and underwhelming medium-term growth prospects, the head of the IMF said Wednesday. The world economy is doing “better than feared, but worse than we need,” International Monetary Fund Managing Director Kristalina Georgieva told reporters in Washington.She added that the Fund now expects global growth to slow “only slightly this year and next,” propped up by better-than-expected conditions in the United States, and among some other advanced, emerging market and developing countries. Georgieva’s remarks came ahead of next week’s gathering of finance ministers and central bank governors at the World Bank and the IMF in Washington. Trade is once again likely to dominate the agenda at the annual meetings, following US President Donald Trump’s decision earlier this year to unleash sweeping tariffs against many trading partners.- ‘Multiple shocks’ -“All signs point to a world economy that has generally withstood acute strains from multiple shocks,” Georgieva said, pointing to “improved policy fundamentals,” the adaptability of the private sector, lower-than-expected tariffs, and supportive financial conditions. “The world has avoided a tit-for-tat slide into trade war — so far,” she added. She noted that the average US tariff rate has fallen from 23 percent in April to 17.5 percent today, while the US effective tariff rate of around 10 percent remains “far above” the rest of the world.But, she warned, the full effect of those tariffs “is still to unfold,” adding that the resilience of the world economy has yet to be “fully tested.” Against this backdrop, the Fund still expects global growth to remain at roughly three percent over the medium term, in line with previous forecasts — below the 3.7 percent, on average, seen before the Covid-19 pandemic.”Global growth patterns have been changing over the years, notably with China decelerating steadily while India develops into a key growth engine,” Georgieva said. To boost lackluster growth prospects elsewhere, she called on countries to act swiftly to “durably” lift output, rebuild fiscal buffers, and address “excessive” trade imbalances. The Fund’s prescriptions for policymakers differed by region, with Asia urged to deepen its internal trade, and to strengthen the service sector and access to finance. Carried out correctly, this could raise economic output by as much as 1.8 percent in the long run, Georgieva said. African countries should promote “business-friendly reforms” and continue with efforts to build up the Continental Free Trade Area which, she said, could lift their real GDP per capita by “over 10 percent.””Gains from this region can be especially large,” she said. – Tough love for Europe -Georgieva reserved her harshest criticism for Europe, which has struggled with economic growth in recent years, in marked contrast to the United States.To raise competition in the bloc, Georgieva called on the European Union to appoint a new “single market czar” to drive reforms, a move that would simplify the EU’s structure and consolidate the power to make the changes required. These changes include steps to deepen EU single market integration in financial services and energy. “Catch up with the private sector dynamism of the US,” she said, adding that Europe must “recognize that there will be some sacrifices on the way.”For the world’s largest economy, Georgieva urged the Trump administration to address the country’s federal deficit and to take steps to incentivize household savings. And for China, the world’s second-largest economy, Georgieva reiterated the IMF’s ongoing calls for fiscal reforms to boost private consumption and reduce dependence on industrial policy to drive growth. 

Gold surpassed $4,000 an ounce for the first time Wednesday as investors piled into the safe haven investment over various economic concerns including the US government shutdown.”This latest high marks the latest stage in what has been a meteoric rise in the gold price, which has now doubled in the last two years,” noted Steve Clayton, head of equity funds at  Hargreaves Lansdown.The precious metal’s recent rally has also come amid concerns that a surge in the value of technology companies, which has helped drive stock markets to record highs, may have been overdone.Global economic uncertainty, US President Donald Trump’s tariffs war and geopolitical crises are supporting gold, according to analysts.It reached an all-time high above $4,040 an ounce Wednesday, while silver was also within a few dollars of its own record high.Elsewhere, stock markets largely rose in Europe after losses for major indices in Asia.The dollar traded mixed against main rivals and oil prices rose around one percent. The Paris CAC 40 index gained as France’s outgoing prime minister said consultations to end the country’s political crisis had shown cross-party willingness to agree on a budget by the end of the year.Frankfurt’s DAX was also higher despite a sharper-than-expected drop in German industrial production, reviving fears of a recession in Europe’s largest economy as it reels from US tariffs.The closure of parts of the US government is adding to the sense of unease among investors, with key economic data, including on jobs, being postponed and muddying the waters for the Federal Reserve as it tries to decide on its rate plans.While gold traders were busy pushing the metal ever higher, equity markets were more subdued in Asia as questions were asked about the hundreds of billions of dollars that have been invested in artificial intelligence.The AI boom has seen some indices and companies hit record highs, with chip titan Nvidia topping a $4 trillion valuation.But a report that software firm Oracle’s cloud computing profit margin was much lower than expected sent shivers through trading floors, with Wall Street falling into the red Tuesday.”In a market priced for perfection, any delay in cash flow — even a temporary one — feels like the bartender calling ‘last call’,” wrote Stephen Innes of SPI Asset Management.”Traders didn’t wait for clarification; they simply started easing out of their positions. The Oracle story didn’t crash the party, but it definitely sobered it.”Tech firms, which have enjoyed strong buying this year and in recent months, led selling in Asia, with Alibaba and JD.com down in Hong Kong, TSMC dropping in Taipei and Renesas sharply lower in Tokyo.The Tokyo stock market dropped after a strong start to the week, fuelled by optimism that the election of business-friendly conservative Sanae Takaichi as the ruling party’s leader will see more stimulus measures and a fresh push for monetary easing.- Key figures at around 1045 GMT -London – FTSE 100: UP 0.6 percent at 9,539.13 pointsParis – CAC 40: UP 0.7 percent at 8,030.20Frankfurt – DAX: UP 0.5 percent at 24,513.01Tokyo – Nikkei 225: DOWN 0.5 percent at 47,734.99 (close)Hong Kong – Hang Seng Index: DOWN 0.5 percent at 26,829.46 (close)Shanghai – Composite: Closed for a holidayNew York – Dow: DOWN 0.2 percent at 46,602.98 (close)Euro/dollar: DOWN at $1.1630 from $1.1652 on TuesdayPound/dollar: UP at $1.3428 from $1.3422Dollar/yen: DOWN at 152.92 yen from 151.97 yenEuro/pound: DOWN at 86.64 pence from 86.83 penceBrent North Sea Crude: UP 0.9 percent at $66.06 per barrelWest Texas Intermediate: UP 1.1 percent at $62.38 per barrel

Gold prices broke $4,000 on Wednesday for the first time as investors piled into the safe haven over expectations for US interest rate cuts and worries over the US government shutdown.The rally in the precious metal also came after concerns that a tech-fuelled rally that has sent some equity markets to record highs may have gone too far, fanning talk of an asset bubble.Traders have been piling into gold all year, pushing it up more than 50 percent since the start of 2025, on the back of a range of issues including global economic uncertainty, Donald Trump’s trade war and geopolitical crises.Its allure was increased further this week by political turmoil in France, where the prime minister resigned and President Emmanuel Macron’s former premier urged him to resign and call early elections.Gold — long considered a go-to in times of uncertainty — climbed to a high of $4,039.86 on Wednesday, even as the dollar has pushed up against most of its peers in recent days. Silver was also within a few dollars of its own record high.The closure of parts of the US government is adding to the sense of unease among investors, with key economic data, including on jobs, being postponed and muddying the waters for the Federal Reserve as it tries to decide on its rate plans.”The rapid rise in gold prices has been supported by rising inflows into (exchange-traded funds) and central bank buying, including solid demand from China, as gold benefits from political, economic, and inflation uncertainty,” wrote Taylor Nugent at National Australia Bank.And Pepperstone’s Chris Weston said, “funds and global reserve managers want a hedge — against fiscal recklessness, currency debasement, and unpredictable government policy — and gold sits squarely at the heart of that movement”.- AI party sobers up -While gold traders were busy pushing the metal ever higher, equity markets were more subdued in Asia as questions were asked about the hundreds of billions of dollars that have been invested in artificial intelligence.The AI boom has seen some indexes and companies hit record highs, with chip titan Nvidia topping a $4 trillion valuation.But a report that software firm Oracle’s cloud computing profit margin was much lower than expected sent shivers through trading floors, with all three main indexes on Wall Street falling into the red.”In a market priced for perfection, any delay in cash flow — even a temporary one — feels like the bartender calling ‘last call’,” wrote Stephen Innes of SPI Asset Management.”Traders didn’t wait for clarification; they simply started easing out of their positions. The Oracle story didn’t crash the party, but it definitely sobered it.”Tech firms, which have enjoyed strong buying this year and in recent months, led selling in Asia, with Alibaba and JD.com down in Hong Kong, TSMC dropping in Taipei and Renesas sharply lower in Tokyo.Hong Kong and Taipei were among the biggest losers, while Sydney and Singapore also fell.Tokyo dropped after a strong start to the week, fuelled by optimism that the election of business-friendly conservative Sanae Takaichi as the ruling party’s leader will see more stimulus measures and a fresh push for monetary easing.Wellington, Manila, Bangkok, Mumbai and Jakarta edged up with London, Paris and Frankfurt. – Key figures at around 0810 GMT -Tokyo – Nikkei 225: DOWN 0.5 percent at 47,734.99 (close)Hong Kong – Hang Seng Index: DOWN 0.5 percent at 26,829.46 (close)London – FTSE 100: UP 0.3 percent at 9,511.20Shanghai – Composite: Closed for a holidayEuro/dollar: DOWN at $1.1630 from $1.1652 on TuesdayPound/dollar: DOWN at $1.3411 from $1.3422Dollar/yen: UP at 152.51 yen from 151.97 yenEuro/pound: DOWN at 86.70 pence from 86.83 penceWest Texas Intermediate: UP 0.9 percent at $62.27 per barrelBrent North Sea Crude: UP 0.8 percent at $65.96 per barrelNew York – Dow: DOWN 0.2 percent at 46,602.98 (close)

When Donald Trump was elected, Indian garment exporter R.K. Sivasubramaniam thought the new US president would boost business and invested heavily in anticipation of a boom.But less than a year later, everything is “upside down”, he admits with a pained smile.Trump’s 50 percent tariffs on Indian goods, imposed in August, have upset the country’s $11 billion textile export industry and shaken confidence in the US market.Sivasubramaniam’s Raft Garments factory in southern India, normally frenetic with humming sewing machines, is quieter and work hours have been cut, hitting employees’ paypackets.If his US buyers turn to other suppliers, half his business could vanish.Meanwhile, half a million garments sit in towering stacks, ready for shipment but stalled over who will pay the new duties.Buyers are asking for a 16-20 percent discount.”We cannot give that much,” said Sivasubramaniam, whose desk carries crossed US and Indian flags. “It’s a very huge loss for us.”If Raft doesn’t shoulder part of the duties, it won’t be paid for garments already produced — leaving it unable to cover costs.”If it continues for another month… we cannot give work to our employees,” he warned.Trump’s anger at India’s purchases of Russian oil — which Washington says help finance Moscow’s war in Ukraine — has left New Delhi facing some of the world’s steepest tariffs.A trade deal that could ease that hinges partly on progress in peace talks.But the fallout is being felt in Tiruppur, in the southern state of Tamil Nadu.- ‘Worst possible situation’ -Dubbed India’s “knitwear capital”, and “Dollar City” for its export earnings, the small industrial town produced $5 billion in garments last fiscal year, two-fifths going to the United States. Its lanes are dotted with thousands of units including dyeing, embroidery and sewing workshops.Manufacturers paint a grim picture.”US orders have largely stopped, around 80 percent of the US business has reduced,” said Ramesh Jebaraj of Trinity Tex.In the same season last year, he produced 100,000 garments.Now he has barely a fifth of that — forcing him to seek buyers in Israel and the United Arab Emirates.”This is the situation across Tiruppur,” he told AFP. “Some of the bigger factories are on the verge of closing some of their units.”Alexander John of NC John Garments, which supplies Walt Disney, called the tariff standoff “the worst possible situation any business can be in”.With his US orders “completely at a standstill”, he has cut shifts and laid off workers.To stay afloat, he is looking to Europe and Britain but said “none of these markets can replace the US”.Tamil Nadu Chief Minister M.K. Stalin has warned that up to three million jobs could be at risk across the state’s textile belt, a grim prospect for a country struggling to provide well-paid work for its youth.Local industry associations say they have so far avoided widespread layoffs by agreeing to steep discounts on US shipments.”In the short term, we’re giving discounts to the customer ranging from 20 to 25 percent,” said N. Thirukkumaran, general secretary of the Tiruppur Exporters Association.But he admits it is not a long-term solution, and has pleaded for government support.- ‘We are helpless’ -Exporters describe the move as a calculated gamble, by selling at a loss to maintain US buyer relationships while awaiting a trade deal.At RRK Cotton’s facility in Palladam, 17 kilometres (10 miles) from Tiruppur, dimly lit production halls are quieter than normal.Owner R. Rajkumar, a former tailor who built his business over three decades, has closed two factories and furloughed some staff.”This is a situation nobody could have anticipated,” he said, adding that he was running three factories fulfilling European orders, and shipping some US orders after giving a discount.He fears the next ordering cycle could be disrupted if US buyers shift to rivals such as Vietnam or Bangladesh.All that depends on a trade deal.Meanwhile, anger and confusion run deep among workers and business owners.”My tailor… He doesn’t know what is a trade war, or why India is buying oil from Russia, and why it is affecting our lives, our bread,” said Kumar Duraiswamy, CEO of Eastern Global Clothing.”The problem is we are helpless,” he added.N. Karthick Raja, 38, employed at a small embroidery unit now running reduced shifts, fears for his livelihood.”If this job goes away, I don’t know what I will do next,” he said. “America has abandoned us, more or less.”

Wall Street stocks turned lower Tuesday and gold closed in on $4,000 per ounce as investors weighed the US government shutdown and political turmoil in France.Wall Street equities opened higher, but stumbled into negative territory soon thereafter, with some seeing signs of a fatigued market after a heady run.”The momentum is beginning to dry up,” said FHN Financial’s Chris Low. “It just feels to me like this is primarily profit-taking, we need another catalyst.”All three major indices finished the day lower, with the S&P 500 down 0.4 percent.In Europe, the Paris stock market edged back up after a sell-off, even as President Emmanuel Macron faced a call from his first prime minister, Edouard Philippe, to resign over a deepening political and budget crisis.London and Frankfurt also ended broadly stable, but the euro fell further against the dollar.Philippe, who aspires to become president, urged Macron to call for an early presidential election.Spot gold prices came within $10 of hitting $4,000 per ounce as futures markets topped the benchmark.”Gold has benefited from multiple catalysts this year, including tariff uncertainty, stubborn inflation, and a falling US dollar,” said analyst Bret Kenwell at eToro.”Uncertainty around the government shutdown and prospects of lower interest rates have only seemed to fan the flames of this year’s rally,” he added.The US government shutdown stretched into a seventh day, with Republicans and Democrats appearing no closer to an agreement.Bets on the Federal Reserve cutting interest rates this month and the political crisis in France are adding to the allure of gold, a safe-haven asset.In Asia, Tokyo eked out another record following the weekend election of a pro-stimulus advocate to lead Japan’s ruling party, before paring gains to close flat.The election of Sanae Takaichi — expected to become Japan’s prime minister this month — ramped up optimism that she will kick-start the economy through stimulus measures.Yields on 30-year Japanese bonds hit their highest level, reflecting fears the country’s already colossal debt will balloon further.Among individual companies, Tesla slid 4.5 percent after the company unveiled revamped versions at modestly lower price points. Analysts expressed disappointment that the pricing cut was not more significant in light of the demise of a federal tax credit.Ford tumbled 6.1 percent following a fire in an Oswego, New York, aluminum plant that is expected to reduce supplies to the auto giant for months. – Key figures at around 2015 GMT -New York – Dow: DOWN 0.2 percent at 46,602.98 (close)New York – S&P 500: DOWN 0.4 percent at 6,714.59 (close)New York – Nasdaq Composite: DOWN 0.7 percent at 22,785.97 (close)London – FTSE 100: UP less than 0.1 percent at 9,483.58 (close)Paris – CAC 40: UP less than 0.1 percent at 7,974.85 (close)Frankfurt – DAX: UP less than 0.1 percent at 24,385.78 (close)Tokyo – Nikkei 225: FLAT at 47,950.88 (close)Hong Kong – Hang Seng Index: Closed for a holidayShanghai – Composite: Closed for a holidayEuro/dollar: DOWN at $1.1652 from $1.1711 on MondayPound/dollar: DOWN at $1.3422 from $1.3485Dollar/yen: UP at 151.97 yen from 150.35 yenEuro/pound: DOWN at 86.83 pence from 86.85 penceBrent North Sea Crude: DOWN less than 0.1 percent at $65.45 per barrelWest Texas Intermediate: DOWN 0.1 percent at $61.73 per barrelburs-jmb/aha

AI-related goods and a surge in exports to the United States to beat President Donald Trump’s tariff hikes boosted global merchandise trade growth this year, the World Trade Organization said Tuesday.However, the picture is bleaker for 2026, the WTO warned, as the impact of those tariffs kicks in.The WTO raised its forecast for trade volume growth in 2025 to 2.4 percent — up from 0.9 percent in August — and slashed its 2026 outlook from 1.8 percent to 0.5 percent.”Global merchandise trade outpaced expectations in the first half of 2025, driven by increased spending on AI-related products, a surge in North American imports ahead of tariff hikes, and strong trade among the rest of the world,” the WTO said, as it published its updated global trade outlook.In an unusual move, the global trade body has revised its estimates several times this year due to uncertainties surrounding the new tariffs imposed by the Trump administration.Since returning to office in January, Trump has slapped several waves of new tariffs on imports entering the United States.His administration has imposed a basic tariff of 10 percent on all countries since April, with much higher rates for some economies.- Measured reaction to tariffs -“Countries’ measured response to tariff changes in general, the growth potential of AI, as well as increased trade among the rest of the world — particularly among emerging economies — helped ease trade setbacks in 2025,” WTO chief Ngozi Okonjo-Iweala said.The WTO said artificial intelligence-related goods — including semiconductors, servers, and telecommunications equipment — drove nearly half of the overall trade expansion in the first six months of the year, rising 20 percent year-on-year in value terms.Over those six months, “42 percent of global trade growth came from AI-related goods — far out of proportion to their 15 percent share in world trade”, Okonjo-Iweala told a press conference.But the former Nigerian finance minister said trade resilience this year should not fool countries into “complacency”.”Today’s disruptions to the global trade system are a call to action for nations to reimagine trade and together lay a stronger foundation that delivers greater prosperity for people everywhere,” she said.She noted that apart from a few countries, most WTO members have not imposed tit-for-tat tariffs on the United States “like it was in the 1930s” during the Great Depression, praising them for sticking to WTO rules.- ‘So much uncertainty’ -The report predicted that all regions will record weaker import performance in 2026 as higher tariff rates and heightened trade policy uncertainty bite.Okonjo-Iweala said that looking ahead to 2026, “the fact is there is so much uncertainty it is hard to be conclusive”.The WTO’s global GDP growth projection is 2.7 percent this year and 2.6 percent in 2026.Services export growth is now expected to slow from 6.8 percent last year to 4.6 in 2025, and further down to 4.4 percent next year.