US stocks fall broadly as global central banks raise rates

Update US stocks fall broadly as global central banks raise rates
All three main indexes on Wall Street tumbled Wednesday (Shutterstock)
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Updated 22 September 2022

US stocks fall broadly as global central banks raise rates

US stocks fall broadly as global central banks raise rates

LONDON: Stocks fell on Wall Street in morning trading on Thursday and added to weekly losses for major indexes as central banks around the world hiked interest rates to fight inflation, according to AP.

The S&P 500 fell 0.6 percent as of 10:19 a.m. Eastern. The Dow Jones Industrial Average fell 98 points, or 0.3 percent, to 30,086 and the Nasdaq fell 1 percent. Every major index is solidly on track for weekly losses.

The losses were broad and led by retailers, technology stocks and industrial companies.

Starbucks fell 3.4 percent and Apple fell 1.2 percent. Energy stocks gained ground as US crude oil prices rose 3.4 percent. Valero Energy rose 1.4 percent.

Bond yields rose. The yield on the 2-year Treasury, which tends to follow expectations for Fed action, rose significantly to 4.12 percent from 4.02 percent late Wednesday. It is trading at its highest level since 2007.

The yield on the 10-year Treasury, which influences mortgage rates, jumped to 3.65 percent from 3.51 percent from late Wednesday.

Central banks in Europe and Asia raised interests a day after the Federal Reserve made another big rate hike and signaled that more were on the way.

Britain’s central bank raised its key interest rate by another half-percentage point.

Switzerland’s central bank raised its benchmark lending rate by its biggest margin to date, 0.75 percentage points, and said it couldn’t rule out more hikes. Central banks in Norway and the Philippines also raised interest rates.

The Fed and other central banks are raising interest rates in to make borrowing more expensive. The goal is to slow economic growth enough to tame inflation, but not so much that economies slip into a recession.

Wall Street is worried that the Fed may be pumping the brakes too hard on an already slowing economy, which makes steering into a recession more likely.

On Wednesday, Fed chair Jerome Powell stressed his resolve to lift rates high enough to drive inflation back toward the central bank’s 2 percent goal. Powell said the Fed has just started to get to that level with this most recent increase.

The US central bank lifted its benchmark rate, which affects many consumer and business loans, to a range of 3 percent to 3.25 percent. That is the fifth rate hike this year and up from zero at the start of the year.

The Fed also released a forecast known as a “dot plot” that showed it expects its benchmark rate to be 4.4 percent by year’s end, a full point higher than envisioned in June.


Oil Updates — Crude up; OPEC+ cancels technical meeting; Norway posts soldiers at oil plants

Oil Updates — Crude up; OPEC+ cancels technical meeting; Norway posts soldiers at oil plants
Updated 16 sec ago

Oil Updates — Crude up; OPEC+ cancels technical meeting; Norway posts soldiers at oil plants

Oil Updates — Crude up; OPEC+ cancels technical meeting; Norway posts soldiers at oil plants

RIYADH: Oil prices edged up on Tuesday as expectations that the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, may agree to a large cut in crude output when it meets on Wednesday outweighed concerns about the global economy.

Brent crude futures rose 46 cents, or 0.5 percent, to $89.32 per barrel by 0629 GMT after gaining more than 4 percent in the previous session.

US crude futures rose 30 cents, or 0.4 percent, to $83.93 a barrel. The benchmark gained more than 5 percent in the previous session, its largest daily gain since May.

OPEC+ cancels technical meeting ahead of key meeting of ministers

OPEC+ canceled a meeting of its Joint Technical Committee set for Oct. 4 ahead of a key gathering of ministers from the producer group to set policy, three OPEC+ sources told Reuters on Monday.

The JTC advises the OPEC+ Joint Ministerial Monitoring Committee and the overall OPEC+ ministerial meeting on market fundamentals.

One of the sources said the decision to scrap the JTC meeting came from the JMMC, without elaborating.

Norway posts soldiers at oil, gas plants after Nord Stream leaks

Norway’s military said on Monday it had posted soldiers to help guard major onshore oil and gas processing plants, part of a wider effort to boost security amid suspicion that sabotage caused leaks in the Nord Stream gas pipelines last week.

Russia’s Nord Stream 1 and 2 pipelines burst on Sept. 26, draining gas into the Baltic Sea off the coast of Denmark and Sweden. Seismologists registered explosions in the area, and police in several countries have launched investigations.

Norway, Europe’s largest gas supplier and a major oil exporter, last week deployed its navy and air force to patrol offshore petroleum fields and announced it would receive assistance from Britain, Germany and France in doing so.

At the request of Norwegian police, the Norwegian Home Guard, a rapid mobilization force, on Monday began to deploy troops at plants responsible for processing and exporting oil and gas.

Although the Norwegian government has said it was not aware of any specific threats to oil and gas infrastructure, it still found it prudent to beef up security and sought to calm concerns among workers.

(With input from Reuters)


Saudi IT firm solutions by stc acquire Egypt’s Giza Systems

Saudi IT firm solutions by stc acquire Egypt’s Giza Systems
Updated 5 min 12 sec ago

Saudi IT firm solutions by stc acquire Egypt’s Giza Systems

Saudi IT firm solutions by stc acquire Egypt’s Giza Systems

RIYADH: Arabian Internet and Telecommunication Co., known as solutions by stc, has completed all necessary procedures to acquire a $158 million stake in Egypt's Giza Systems Co., a bourse filing revealed.

The Saudi-listed company had earlier entered a binding deal for the takeover of an 89.49 percent stake in Giza Systems in addition to 34 percent of its unit, Giza Arabia.

However, the acquisition percentage decreased to 88.19 percent, mainly due to executive management shares, it said.

The financial impact will appear in the company’s financial statements from the fourth quarter of 2022.

solutions by stc saw its share price increase 2.85 percent at the opening of bell of Tuesday to reach SR252 ($67), at 10:10 a.m. Saudi time. 


Japan energy minister emphasizes importance of Saudi and Arab suppliers

Japan energy minister emphasizes importance of Saudi and Arab suppliers
Updated 37 min 37 sec ago

Japan energy minister emphasizes importance of Saudi and Arab suppliers

Japan energy minister emphasizes importance of Saudi and Arab suppliers
  • Japan depended on the Middle East for 95 percent of its oil in August and 98 percent in July

TOKYO: Japan’s Minister of Economy, Trade and Industry NISHIMURA Yasutoshi requested Saudi Arabia and other Arab countries to guarantee stable supply of oil.

Nishimura said he had met with executives from Aramco and has proposed talks with Saudi Arabia’s Energy Minister Abdulaziz bin Salman Al Saud.

He also met recently with Sultan Al-Jaber, UAE Minister of Industry and Advanced Technology and CEO of Abu Dhabi National Oil Company (ADNOC), as well as Talal Al-Awfi, Oman’s Minister of Energy and Minerals.

“I requested a stable supply of oil and LNG,” Nishimura said at a press conference at the ministry in reply to a question from Arab News Japan. “I got the reply that they will continue to cooperate with us.”

In the absence of imports from Iran and Russia due to sanctions enforced by the US, more than 90 percent of Japan’s supplies now come from Arab sources.

“It is important for Japan, which lacks resources, to promote a stable supply of crude oil,” Nishimura said. “It is true that oil imports from Russia have stopped and dependence on the Middle East is increasing. We are making decisions on specific sources of crude oil from the perspective of the market.”

“Japan depended on the Middle East for 95 percent of its oil in August and 98 percent in July, so we recognize the region as extremely important in terms of energy security and a stable supply of crude oil.”

Japan is looking to expand its energy business with the Middle East to include clean energy as well as oil and gas.

“We believe that the Middle East is also playing an important role in building the hydrogen and ammonia supply chain,” Nishimura said. “I hope such cooperative relationships will also be strengthened. Furthermore, Japan will strive to diversify its supply sources from the viewpoint of stable supply and security, and domestically also pursue all options, including the utilization and diversification of renewable energy and nuclear energy.”


Anaam International's shares rise as it plans $42m capital increase

Anaam International's shares rise as it plans $42m capital increase
Updated 26 min 41 sec ago

Anaam International's shares rise as it plans $42m capital increase

Anaam International's shares rise as it plans $42m capital increase

RIYADH: Saudi poultry processing firm Anaam International Holding Group’s board recommended an increase in capital of SR158 million ($42 million) through a rights issue, resulting in a rise in its share price.

Anaam International's share price climbed 3.53 percent to reach SR24.66, at 10:06 a.m. Saudi time.

The capital increase is aimed at boosting the working capital, lowering the loan rates, and supporting the business growth of the company, according to a bourse filing.

The capital hike is subject to the approval of the relevant official authorities and the company’s shareholders.

Wasatah Capital was appointed to act as the financial advisor to the offering.


Egypt’s non-oil economy under strain as inflationary pressure grows: S&P Global

Egypt’s non-oil economy under strain as inflationary pressure grows: S&P Global
Updated 04 October 2022

Egypt’s non-oil economy under strain as inflationary pressure grows: S&P Global

Egypt’s non-oil economy under strain as inflationary pressure grows: S&P Global

RIYADH: Business conditions in Egypt’s non-oil economy continue to be under strain with the country’s Purchasing Managers’ Index staying unchanged at 47.6 in September compared to the previous month, according to S&P Global.

According to S&P Global, a PMI above 50.0 marks growth, while those below 50.0 signals contraction.

Egypt’s PMI signals a solid deterioration in business conditions, albeit one that was the joint-weakest for seven months, as inflationary pressures, energy rationing, import restrictions, and weak demand continue to impact the country’s non-oil economy.  

“Non-oil activity in Egypt continued to suffer from weak demand, geopolitical tensions and surging inflation in the final month of the third quarter,” said Shreeya Patel, an economist at S&P Global Market Intelligence.

She added: “Firms nevertheless remain hopeful that macroeconomic conditions would improve in the medium-term, but for now, non-oil Egyptian businesses are challenged to operate in an environment which includes persistently high prices, weak demand and growing uncertainty.”