AFP

Europe’s main stock markets rebounded on Monday after a mixed Asian session following tumultuous sessions last week over recession fears.

Bitcoin regained $20,000 after sinking to an 18-month low of $17,599 in weekend deals because risk-averse investors had shunned the world’s most popular cryptocurrency.

London’s FTSE 100 rallied to close 1.5 percent higher, with sentiment boosted by news of a blockbuster takeover offer for publisher Euromoney.

Frankfurt stocks finished 1.1 percent higher while Paris gained 0.6 percent after French President Emmanuel Macron and his allies faced political deadlock after losing their parliamentary majority in weekend elections.

Wall Street, shut on Monday for a US public holiday, had risen on Friday, though the broad-based S&P 500 lost 5.8 precent for the week, its worst performance since 2020.

“Stability often comes before recovery and markets being more composed would suggest investors are no longer panicking,” said Russ Mould, investment director at broker AJ Bell.

Markets were rocked last week by a fierce selloff after the US Federal Reserve’s sharp interest rate hike — the biggest in nearly 30 years — and a warning of more to come as inflation soars.

The Fed’s move was followed by the fifth straight rate increase in Britain and the Swiss central bank’s first hike since 2007, raising concerns that such moves will drive countries into recession.

“There has undoubtedly been a shift in the market mindset over the last week and a half that has weighed heavily on risk assets,” said Craig Erlam, analyst at OANDA online trading platform.

“The prospect of a recession is being considered far more broadly and what’s more, central banks are increasingly resisting the urge to push back against it,” he said.

Cleveland Fed chief Loretta Mester added to the worry, warning that the risk of a US recession was increasing and it would take several years to bring inflation down from four-decade highs to the bank’s two-percent target.

She told CBS’s “Face The Nation” on Sunday that while she was not predicting a contraction, the Fed’s decision not to act sooner to fight rising prices was hurting the economy.

Analysts warned there was likely to be more pain ahead for traders as the Ukraine war — which has sent energy and food prices soaring this year — drags on and uncertainty continues to reign.

Oil prices stabilised on Monday after Friday’s hefty losses on demand worries caused by the prospect of a world recession.

However, US Energy Secretary Jennifer Granholm said prices could continue to surge if the European Union cut off imports of the commodity from Russia in response to the Ukraine war.

– Key figures at around 1620 GMT –

London – FTSE 100: UP 1.5 percent at 7,121.81 points (close)

Frankfurt – DAX: UP 1.1 percent at 13,265.60 (close)

Paris – CAC 40: UP 0.6 percent at 5,920.09 (close)

EURO STOXX 50: UP 0.9 percent at 3,469.33

Tokyo – Nikkei 225: DOWN 0.7 percent at 25,771.22 (close)

Hong Kong – Hang Seng Index: UP 0.4 percent at 21,163.91 (close)

Shanghai – Composite: FLAT at 3,315.43 (close)

New York – Dow: DOWN 0.1 percent at 29,888.78 (close)

Euro/dollar: UP at $1.0528 from $1.0499 late Friday

Pound/dollar: UP at $1.2243 from $1.2241

Euro/pound: UP at 86.02 pence from 85.77 pence

Dollar/yen: UP at 135.06 yen from 135.02 yen

Brent North Sea crude: UP 0.6 percent at $113.78 per barrel

West Texas Intermediate: UP 0.5 percent at $108.52

burs-lth/jj

Global air transport is on course to return to profit after two pandemic-battered years but the war in Ukraine and the cost-of-living crisis lurk as threats, the industry’s world body said on Monday.

Renewed profitability “appears within reach” in 2023, the International Air Transport Association said, predicting a rebound in passenger levels to 83 percent of pre-pandemic levels this year.

Industry losses are expected to drop to $9.7 billion in 2022, a “huge improvement” from $137.7 billion in 2020 and $42.1 billion in 2021, IATA said in an upgraded industry outlook at its annual general meeting in Doha.

“Airlines are resilient. People are flying in ever greater numbers. And cargo is performing well against a backdrop of growing economic uncertainty,” IATA director general Willie Walsh said.

The air industry was sent reeling by the pandemic, with passenger numbers plunging 60 percent in 2020 and remaining 50 percent down in 2021. Airlines lost nearly $200 billion over two years.

While some firms in the sector went bankrupt, others — often those backed by states — have emerged with profits intact.

IATA said there were positive signs in the latest figures, with North American carriers expected to return an $8.8 billion profit this year.

More than 1,200 aircraft are expected to be delivered in 2022, while cargo volumes should reach a record 68.4 million tonnes “despite economic challenges”, it added.

“Strong pent-up demand, the lifting of travel restrictions in most markets, low unemployment in most countries, and expanded personal savings are fuelling a resurgence in demand that will see passenger numbers reach 83 percent of pre-pandemic levels in 2022,” IATA said.

– Clouds on the horizon –

Turnover should reach 93 percent of 2019 levels this year or $782 billion, a rebound of 54.5 percent on 2021, as revenues from passenger flights more than double to $498 billion.

Cargo, a rare bright spot for air transport in the depths of the pandemic, will retreat slightly with revenues of $191 billion — still double the level of 2019.

Clouds remain on the horizon, however, especially the war in Ukraine after the closure of Russian airspace to several long-haul carriers forced them into costly detours.

Airlines, desperate to put the coronavirus pandemic behind them, are facing a potential summer of chaos with shortages and strikes that could threaten their recovery.

In the past few weeks, delays and cancellations caused by a lack of staff at airports and strikes for better pay have wreaked havoc upon travellers.

The problems originate with the pandemic when airlines and airports laid off thousands of workers during its worst-ever crisis. Now, they are scrambling for employees.

However, Walsh played down the difficulties, saying they weren’t widespread and should ease in time.

High inflation will also erode the purchasing power of consumers, although airlines could profit from rising prices and interest rates as their debts are locked in at lower levels.

Meanwhile, the industry remains wary of new coronavirus variations that could close borders once again. 

China is still bound up with restrictions that are depressing the world’s second-biggest domestic market and are creating “chaos” in global logistics, said IATA’s chief economist Marie Owens Thomsen.

IATA originally planned to hold its annual general meeting in Shanghai, but moved it to Qatar as China, pursuing its “zero-Covid” policy, continues to grapple with the pandemic.

The number of Africans with access to electricity fell during the Covid pandemic, but $25 billion in annual investments could bring full coverage by 2030, the International Energy Agency said Monday.

The IEA said 600 million people, or 43 percent of the continent’s population, lack access to electricity — mostly in sub-Saharan Africa.

The number of people living without electricity increased by four percent, or 25 million people, between 2019 and 2021, after a decade of progress.

Before Covid, there had been “lots of good developments in countries such as Ghana, Kenya, Rwanda,” IEA chief Fatih Birol told AFP ahead of the release of the Paris-based agency’s African Energy Outlook 2022.

“But because of Covid and the economic difficulties, we see that this positive trend is reversing now,” Birol said.

Russia’s invasion of Ukraine has added to the economic strains on Africa from the Covid pandemic, as the conflict has sent the prices of energy, food and other commodities soaring, according to the IEA.

“When I look at 2022, with the high energy prices and the economic burden on the African countries, I don’t see many reasons to be hopeful,” Birol said.

But Africa could get universal access to electricity by the end of the decade with $25 billion in annual investment, according to the IEA.

Countries need to give international financial institutions, especially development banks, a “strong mandate” to make Africa and clean energy on the continent “an absolute priority”, Birol said.

“It’s not the case now,” he added.

Africa is facing more severe effects from climate change than most other parts of the world, despite emitting less energy-related carbon dioxide (CO2) than any other region, the IEA said.

“We have to see a huge amount of investment coming in Africa in all parts of the energy system, but the most important one will be clean energy options,” Birol said.

“We would need to double the energy investments to reach our energy and climate goals.”

Renewables — including solar, wind, hydropower and geothermal — could account for over 80 percent of new power generation capacity in Africa by 2030, the IEA report said.

While Africa is home to 60 percent of the best solar resources worldwide, it only has one percent of installed solar energy capacity, according to the report.