Chinese Business

Hackers have followed through on a threat to leak sensitive medical records stolen from a major Australian health company that counts the country’s prime minister among nearly 10 million customers.

Medibank told investors that a “sample” selection of customer data was posted on a “dark web forum” on Wednesday after it refused to pay a ransom demand.

The data included names, birth dates, passport numbers and information on medical claims for hundreds of customers who were separated into “naughty” and “nice” lists. 

Some on the “naughty” list had numeric codes that appeared to link them to drug addiction, alcohol abuse and HIV infection. 

For example, one record carried an entry that read: “p_diag: F122”. 

F122 corresponds with “cannabis dependence” under the International Classification of Diseases, published by the World Health Organization. 

Medibank is Australia’s largest private health insurer and the hack is likely to include some of the country’s most influential and wealthy individuals.

Prime Minister Anthony Albanese said he himself was a Medibank customer and that the attack was a “wake-up call” for corporate Australia.

– Potential Russian link –

The perpetrator of the hack has not yet been publicly identified. 

But the Australian Federal Police’s Justine Gough said it was the work of a “criminal or criminal groups” that could be operating outside the country.

Sanjay Jha, chief scientist at the University of New South Wales’s Institute for Cyber Security, said it was difficult to attribute any attack to a single group.

However, he told AFP it carried some of the hallmarks associated with a Russian hacker group called REvil — which has previously targeted everything from Brazilian meat company JBS to Lady Gaga.

“The pattern matches the behaviour in parts. So that is why there is a serious indication it could be them selling the data,” Jha said.

A defunct REvil website has been redirecting traffic to the dark web forum where the Medibank data was leaked.

REvil — an amalgam of ransomware and evil — was the subject of a US$10 million reward from US authorities before being reportedly dismantled by Russia this year. 

JBS Foods, one of the largest beef producers in the world, paid REvil a ransom of US$11 million in 2021.

Jha said the hackers could now look to sell the sensitive data to blackmailers and other scammers.

– ‘Scumbags’ and ‘crooks’ –

The hackers also uploaded what they said were a series of messages sent to Medibank in the days before the leak. 

“We will do everything in our power to inflict as much damage as possible for you, both financial and reputational,” one message from the hackers read. 

Hundreds of millions of US dollars have been wiped off Medibank’s market value, with the company’s share price down more than 20 percent since October, when news of the leak first emerged.

Troy Hunt, a cyber security expert working for Microsoft, wrote on Twitter that the breach was “about as bad as we feared it would get”. 

The Medibank hack followed an attack on telecom company Optus in September that exposed the personal information of some nine million Australians.

Jha said the enormous Medibank and Optus data breaches could make it easier to carry out cyber attacks on different systems in the future. 

“A lot of credentials have been stolen in recent months,” he said. “That makes the job of attackers easier — they can go and try other systems with millions of credentials.” 

Australia’s assistant treasurer Stephen Jones said the perpetrators were “scumbags” and “crooks”.

“We shouldn’t be giving in to these fraudsters,” he told local media.

As Medibank tried to contain the leak, it was also staring down the barrel of a potentially costly class action lawsuit.

Dozens of state-owned Sri Lankan companies employing tens of thousands of people could be restructured or closed as part of an IMF bailout of the bankrupt country, with the country’s airline top of the list for reform.

With nearly 6,000 staff, SriLankan Airlines is the biggest and most expensive of the cash-haemorrhaging, sclerotic companies that have drained the budget and compounded the worst financial crisis in national history.

According to treasury figures, the carrier was losing $4.50 for every dollar it earned at the start of this year. It has not turned a profit since 2008, when its chief executive was sacked for offending the country’s then-leader.

“Even those who have never stepped into a Sri Lankan aircraft are paying to subsidise the airline,” government spokesman Manusha Nanayakkara told reporters this month. 

“We can’t continue like this.”

Sri Lanka defaulted on its $51 billion foreign debt in April and is now neck-deep in the arduous process of renegotiating its obligations with creditors.

Its 22 million people suffered through months of food and fuel shortages, and at the peak of the crisis, a furious mob stormed government buildings and chased Sri Lanka’s former president into exile. 

The International Monetary Fund (IMF) has given preliminary approval to a $2.9 billion bailout, and the government hopes to be able to access the first tranche by the end of the year.

Terms of the deal have yet to be released, but IMF cash is usually conditional on painful reforms, such as tax hikes, removing consumer subsidies, and privatising or closing underperforming state firms.

The country has more than 300 state enterprises, ranging from nut farms to fuel retailers, and the top 52 firms lost nearly $2.4 billion between January and April — around $140 million a week.

SriLankan Airline’s future is the most urgent priority, and the government last month instructed the finance ministry to begin its restructuring, ideally by attracting outside investment.

But finding a company willing to pour money into the airline will be immensely challenging, analysts say, given its history of interference, mismanagement and turbulent partnerships.

– ‘It’s even more difficult now’ –

In 1998, Emirates bought a minority stake in the carrier and took over its management. 

It stayed in the black for most of the next decade, although one of its most profitable years was — ironically — 2001, when the Tamil Tigers separatist movement attacked the country’s main international airport. 

Several of the airline’s planes were destroyed in the July attack, but insurance payouts and the removal of excess capacity offset a downturn in ticket sales. 

But the partnership was terminated and the chief executive sacked by then-president Mahinda Rajapaksa in 2008 after the carrier refused to bump fare-paying passengers to make room for members of his family returning from a jaunt in London. 

The leader packed SriLankan’s management with relatives and loyalists, several of whom now face corruption charges, and the airline has bled cash since.

Rajapaksa even started a rival state-owned airline named after himself, a colossal failure that was eventually merged into SriLankan — along with its accumulated losses.

Authorities tried to sell a 49 percent stake in SriLankan back in 2017 when the island nation’s tourism market was booming, but even then private equity firm TPG eventually withdrew its bid after deciding it was not a viable operation.

Airlines are “generally not that attractive” to investors, Singapore-based aviation analyst Brendan Sobie told AFP, “particularly airlines that are government owned and have a lot of legacy issues, have a lot of debt, like SriLankan does”.

“There’s not many foreign airlines, particularly in this post-Covid environment, that are even looking or considering buying stakes in airlines overseas,” he added, and the track record for strategic investments in the sector was “very bad”.

“It’s very difficult,” he said.

– ‘We are a bankrupt country’ –

SriLankan chairman Ashok Pathirage acknowledges the airline’s current balance sheet is not an attractive proposition.

“If you try to privatise the whole thing, people will come and ask the government to take half of the debt,” Pathirage told AFP. 

But he said SriLankan could settle about half of its liabilities by splitting off and selling profitable business arms, including its virtual monopoly on catering and ground handling at Colombo airport.

Trade union leaders and employees support a restructuring along those lines, on the condition that no jobs are cut.

“The airline is losing money not because of the staff, but expensive leases and poor financial structures,” a cabin crew member, who requested anonymity, told AFP.

But selling off the airline’s profitable divisions would leave the rump operations generating even bigger losses for the government.

Former state finance minister Eran Wickramaratne told AFP that if authorities could not find an investor, the airline should be grounded permanently before it could burden the public further.

“We are a bankrupt country,” he said. “We have not been able to service our debt and that reality has struck home.”

Tesla chief Elon Musk sold nearly $4 billion worth of shares in the electric car company, SEC filings showed Tuesday, more than a week after he closed his $44 billion acquisition of Twitter.

Musk has been pushing for ways to pay for the massive deal, for which he took on billions of dollars in debt and earlier sold $15.5 billion worth of shares in Tesla.

On Tuesday, documents filed with the US Securities and Exchange Commission (SEC) indicated that he had disposed of more than another 19 million shares, worth in excess of $3.9 billion.

Musk took control of Twitter and fired its top executives in late October, after a drawn-out back-and-forth between the world’s richest person and the influential social media company.

The billionaire initially tried to step back from the deal after his unsolicited offer was accepted in April.

He said in July that he was canceling the contract because he had been misled by Twitter over the number of fake “bot” accounts, allegations rejected by the company.

After Musk sought to terminate the sale, Twitter filed a lawsuit to hold the entrepreneur to the agreement. With a trial looming, he revived his takeover plan.

– Overhaul –

On Friday, Twitter sacked half of its 7,500-strong staff as its new owner launched an overhaul of the company.

Jack Dorsey, who co-founded Twitter in 2006 and stepped down as CEO last year, tweeted to apologize for growing the site too quickly, following news of the firings.

Musk has been searching for ways for the social media platform to make money after the buyout, including an idea to charge users $8 a month for verified accounts.

The move would help overcome a potential loss of advertisers, Twitter’s main source of revenue, after many top brands put their ad buys on hold, uneasy about Musk’s well-known disdain for content controls.

Musk’s actions and statements since taking over the reins of Twitter have prompted concern, including warnings from the United Nations.

UN rights chief Volker Turk has urged Musk to make respect for human rights a priority for the social network.

Musk has insisted that content moderation remains a priority for Twitter and that he would create a council dedicated to the task.

Musk’s decision to pull Twitter off the stock market has allowed him to make major changes quickly, but it also took the company more heavily into debt, a risky choice for a money-losing business.

Asian stocks made a positive start Wednesday following gains on Wall Street but lost momentum as factory gate prices in China fell for the first time in nearly two years.

Shares in Tokyo and Hong Kong rose at the open, with the United States bracing for a tense night of midterm election results.

But they dipped in mid-morning trade after official data showed the world’s second-largest economy languishing under Beijing’s strict zero-Covid policy.

Markets had climbed in New York and Europe on Tuesday as polls opened in crucial US elections that will shape the political fortunes of President Joe Biden.

Biden’s Democrats are facing a gargantuan struggle to hang onto control of Congress, and a Republican victory could pave the way for a White House comeback bid by Donald Trump.

Such a result could also lead to political deadlock in Washington — a prospect welcomed by investors “as it prevents any significant shifts in policy,” according to Scope Markets analyst James Hughes.

At the same time, market players are eying US inflation data due on Thursday, causing the dollar to retreat, said Edward Moya, senior market analyst at OANDA.

“The dollar got crushed today as a short-covering move accelerated as investors embraced risk appetite ahead of the midterm elections and Thursday’s pivotal inflation report,” he said in a note late Tuesday.

Tokyo was down 0.2 percent at the break, while Hong Kong lost 0.1 percent in morning trade, with Shanghai up 0.3 percent.

Other Asian markets were mostly higher, with Taipei up 1.4 percent, Seoul gaining 1.1 percent and Singapore up 0.3 percent. Sydney rose 0.6 percent while Jakarta was flat.

Speculation over how long Beijing will stick with its harsh lockdown-and-testing policies designed to stamp out Covid-19 has fuelled volatility in Chinese markets in recent days.

Official data showed Wednesday that China’s producer price index (PPI) fell by 1.3 percent on-year in October, pushing it into negative territory for the first time since December 2020.

The consumer price index (CPI) — the main gauge for retail inflation — rose by 2.1 percent on-year in October, moderating slightly from September’s two-year high of 2.8 percent.

Some stocks turned negative after “China inflation data printed a rather gloomy picture, with PPI remaining deflationary and CPI much weaker than expected, pointing to waning demand,” Stephen Innes of SPI Asset Management said in a note.

“Rolling lockdowns in China, as Covid cases rebound, are catching oil traders leaning the wrong way,” he added. Both main crude indexes were down more than 2.5 percent.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: DOWN 0.2 percent at 27,827.16 (break)

Hong Kong – Hang Seng Index: DOWN 0.1 percent at 16,539.83

Shanghai – Composite: UP 0.3 percent at 3,072.68

Pound/dollar: UP at $1.1544 from $1.1468 on Tuesday

Euro/dollar: UP at $1.0074 from $1.0005

Dollar/yen: DOWN at 145.465 yen from 146.26 yen

Euro/pound: UP at 87.28 pence from 87.23 pence

West Texas Intermediate: DOWN 3.3 percent at $88.79 per barrel

Brent North Sea crude: DOWN 2.6 percent at $95.32 per barrel

New York – Dow: UP 1.0 percent at 33,160.83 (close)

London – FTSE 100: UP 0.1 percent at 7,306.14 (close)

Trafficked, beaten and locked up far from his family in China, Lu was one of thousands of people in Cambodia forced to operate online scams to line their captors’ pockets.

Covid shutdowns had left the builder out of work, so when he heard he could earn $2,000 a month on a construction project in Cambodia, he jumped at the chance.

But he soon realised he had been lured by a scamming gang to a compound in the seaside resort of Sihanoukville, along with hundreds of others.

There he was forced to work 12 to 16 hour shifts, trawling social media and dating apps on a hunt for victims to scam out of huge sums.

“Once I arrived it was too late to escape,” Lu told AFP. “But as long as I was alive, I would keep trying.”

People from countries around Asia — including Vietnam, the Philippines, Thailand, Malaysia, China, Taiwan, Hong Kong, Bangladesh and India — have been sucked into similar operations.

Some, like 34-year-old Lu, have made it out, though thousands of others are feared still trapped.

In August, the UN special rapporteur on the situation of human rights in Cambodia, Vitit Muntarbhorn, said the trafficking victims “were experiencing a living hell often resulting in torture and even death”.

– Metal bars and barbed wire – 

Sihanoukville was once a sleepy resort town, but it was transformed by a vast influx of Chinese investment.

Dozens of casinos sprang up in recent years, making it a hub for Chinese gamblers and drawing in international crime groups.

As travel restrictions bit during the pandemic, these groups shifted their focus.

Jeremy Douglas, of the United Nations Office for Drugs and Crime (UNODC), said “criminal groups moved casino businesses online, and some then did a pivot and added online and phone scams”.

One gang member told AFP on condition of anonymity that the first people to fall prey to operations like his were Chinese nationals already in Cambodia.

Then gangs started trafficking people into the country.

Douglas of the UNODC said “thousands, and some have estimated possibly tens of thousands” of people have been ensnared.

To stop victims from escaping, compounds were installed with metal window bars and barbed wire.

“Once they arrived in the compound, they could not leave,” the gang member said.

“People were beaten or tortured and sold if they refused to scam others.”

Within Cambodia, some were sold on to other gangs, the source said. Those with good IT or English-language skills could be sold for up to $50,000.

– ‘The real mafia’ – 

AFP interviewed four trafficking victims who said they too received lucrative job offers during the pandemic.

A 38-year-old Malaysian Chinese man called Roy described flying to Phnom Penh and being met by a woman in smart office wear who whisked him through immigration and into a car for the five-hour drive to Sihanoukville.

There, he was taken to a complex of apartment blocks a dozen or so storeys tall, housing a mix of accommodation and office rooms.

“It just looked like a normal office, with three rows of tables with monitors and keyboards, just like a cybercafe,” Roy told AFP.

But he said “once you get in you know you’re not doing customer service”.

Roy and others like him had their passports taken away, and were instructed to set up fake profiles on apps and dating sites including TikTok, Facebook, Instagram and WhatsApp.

Under the constant threat of violence, they would groom targets to pour money into crypto currency or other investment platforms.

Others were forced to build online “love” relationships with their targets and to scam them under the guise of needing help to pay debts off.

There are no reliable figures on how much money the gangs have netted from the scams, though the UN’s Douglas said the numbers are “staggering”.

It is not clear where the money ends up, he added, though criminal proceeds are often bundled together with online betting profits, with many of the scam compounds located near legal gambling businesses.

The gang member in Sihanoukville told AFP he did not know who he was ultimately working for.

“We don’t know who is who,” he said. “They are the real mafia.”

– ‘Shock, kick, shock’ –

Forced scammers who resisted paid a high price. Construction worker Lu said he was “beaten quite often” because he was caught trying to escape.

Others said gang members used electric batons to inflict shocks, or forced workers into rooms too small to stand in, depriving them of water, food and light for hours.

“They ask someone to lie down and then kick them, like a dog,” Roy said.

“Sometimes (they would) get an electric shock, kick and shock. They would get a five-minute to 10-minute beating.”

Some, like Roy, were fortunate.

After being told he would have to buy his way out for $20,000, he was rescued after contacting Taiwanese victims group the Global Anti-Trafficking Organisation (GASO).

The group works with Cambodian officials to facilitate rescues and repatriate citizens.

Others have taken a more dramatic approach — in August dozens of Vietnamese workers escaped a casino in southern Kandal province and swam across a river back to their homeland.

Attention on the issue has grown: in July the United States downgraded Cambodia in its annual human trafficking report.

After months of official denials, Prime Minister Hun Sen ordered a hunt for ringleaders and authorities launched a string of high-profile raids in August.

In September, police freed more than 1,000 foreigners from three Sihanoukville compounds.

At one site, a swoop netted nearly 9,000 mobile phones, 800 computers — and chillingly, handcuffs and electric shock instruments.

It was during one such raid that Lu was released.

– Crackdown or relocation? – 

Still, international observers and rights groups are sceptical of the depth of the government’s crackdown.

Jacob Sims, International Justice Mission’s Cambodia director, said the efforts need to go further than raids and rescues.

“Criminal accountability for the ringleaders of the transnational organised crime networks is absolutely essential if we hope to eradicate this issue,” he said.

There are fears that rather than shutting down, the groups are simply relocating.

“Today it is an operation in Cambodia, but tomorrow a gang under pressure uproots and shifts to Myanmar, Laos or the Philippines — and this has happened,” the UN’s Douglas said.

Back in Cambodia, those rescued by police, like Lu, face an uncertain future.

While he has evaded immigration detention, he told AFP he cannot afford to return to his wife and nine-year-old child in China.

A spokesperson for China’s foreign ministry told AFP the government was working with Cambodia and other countries to fight transnational crime, and that it “resolutely upholds both the safety and legal rights and privileges of Chinese citizens abroad”.

Lu said he had received no help from the Chinese embassy.

“The Chinese embassy only has one thing to say: ‘Adults have to pay for their decisions,'” he said.

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The wealth of China’s billionaires this year dropped by the largest amount in more than two decades, according to an annual ranking, as zero-Covid curbs and a property market crisis stall the world’s second-largest economy.

The Hurun China Rich List, released Tuesday, said the total wealth of all individuals with a minimum net worth of 5 billion yuan ($691 million) dropped by 18 percent to $3.5 trillion.

Only 1,305 people made it onto the list — an 11 percent net decrease compared with last year, and the biggest drop in 24 years. 

The fortunes of China’s ultra-rich have been battered by Beijing’s harsh zero-Covid policy, which has heavily disrupted production and supply chains.

They have also taken a hit from stock market routs during a two-year crackdown on the tech industry, and suffered from geopolitical volatility caused by events such as the war in Ukraine.

The property and healthcare sectors were hit especially hard, according to the list.

Property developer Yang Huiyan of Country Garden Holdings lost the most personal wealth at $15.7 billion this year, while Pony Ma, founder of tech and gaming giant Tencent, lost $14.6 billion after a sweeping crackdown on the gaming industry last year.

China’s three richest people stayed the same as last year, with Zhong Shanshan, founder of bottled water company Nongfu Spring, increasing his wealth by 17 percent to $65 billion.

Zhang Yiming, the founder of TikTok parent ByteDance, retained second place but saw his wealth drop by 28 percent to $35 billion after the company’s valuation dropped.

Alibaba founder Jack Ma fell from fifth to ninth place after losing 29 percent of his wealth to $25.7 billion, while Pony Ma slipped from fourth place to fifth.

Nearly 300 individuals listed last year were absent from this year’s list, most from the property industry, which has faced a spiralling debt crisis after the government imposed borrowing curbs in 2020. 

The chairman of property giant Evergrande, Xu Jiayin, fell out of the 100 richest to 172nd place as his company sagged under over $300 billion of debt.

The International Monetary Fund has predicted that China’s annual GDP growth will only reach 3.2 percent this year.

Factory gate prices in China were down for the first time in nearly two years last month, official data showed Wednesday, as falling global commodity prices made their mark on an economy ailing under strict Covid controls.

The producer price index (PPI) fell by 1.3 percent on-year in October, according to the National Bureau of Statistics (NBS), pushing it into negative territory for the first time since December 2020.

The figure represented a reduction from September’s 0.9 percent rise.

“In October, demand in some industries rose, and the national PPI rose slightly month-on-month,” said NBS statistician Dong Lijuan.

“But owing to the high comparison base from the same period last year, the year-on-year figure went from growth into decline.”

“Factory-gate inflation is likely to continue falling over the coming quarters due to a further decline in global commodity prices and a higher base for comparison,” said Julian Evans-Pritchard, senior China economist at Capital Economics.

“We expect it to stay in negative territory through the final months of the year and much of 2023.”

The consumer price index — the main gauge for retail inflation — rose by 2.1 percent on-year in October, the NBS said, moderating slightly from September’s two-year high of 2.8 percent.

Consumers in China have been largely spared the impact of a global surge in food and energy costs following Russia’s invasion of Ukraine.

“Under the impact of factors including a drop in consumer demand after the (National Day) holiday and last year’s high base of comparison, the rise in consumer prices somewhat fell back,” Dong said.

– Zero-Covid impact –

China is the last major economy wedded to a zero-Covid strategy, stamping out emerging outbreaks as they occur through snap lockdowns, mass testing and strict quarantines.

Authorities in areas where cases arise frequently invoke the policy to shut down businesses and confine people to their homes at short notice.

Much of the country also remains under a patchwork of travel restrictions, roiling international supply chains and hammering domestic demand.

The Chinese economy beat expectations to grow 3.9 percent in the third quarter, but analysts expect that it will fall well below this year’s official growth target of around 5.5 percent.

Global stock markets mostly moved higher on Tuesday as Americans headed to the polls in critical midterm elections.

The dollar dipped the euro, while Chinese demand concerns helped push oil prices down around one percent.

Europe’s main markets ended in the green after starting mixed, with Frankfurt adding 1.3 percent while London and Paris scored more modest gains. 

On Wall Street, the Dow had added around 1.5 percent two hours into trading, while the broader S&P 500 and tech-heavy Nasdaq were also up by a similar margin.

“Those US midterm elections today might keep investors on the sidelines a bit before they make any major decisions,” noted Markets.com analyst Neil Wilson.

“Investors are hoping for a political gridlock. That would make it difficult to pass radical policy changes,” said Fawad Razaqzada market analyst with City Index and FOREX.com.

Polls opened Tuesday in crucial US elections that could decide the political future of both President Joe Biden and his predecessor Donald Trump — who has all but announced he will seek the White House again in 2024.

Biden’s Democrats are facing a gargantuan struggle to hang on to Congress, after a race the president has cast as a “defining” moment for US democracy — while Trump’s Republicans have campaigned hard on kitchen-table issues like inflation and crime.

Polls show Republicans are likely to win at least one house of Congress — and some see the prospect of further Washington gridlock as a scenario that lessens the risk of policy uncertainty.

“Consensus is that investors prefer political deadlock as it prevents any significant shifts in policy,” added Scope Markets analyst James Hughes.

“With that looking like a real possibility, the real market turbulence may appear later in the week.”

Politics aside, investors are also waiting on US inflation data due on Thursday for a pointer on the interest path ahead.

In Asia, the Hong Kong and Shanghai stock markets sank as speculation about a rollback of China’s strict zero-Covid policies fuelled market volatility, but Tokyo ended 1.3 percent ahead.

– Crypto crunch –

Elsewhere, in the world of crypto finance, Binance, the world’s biggest cryptocurrency platform, tweeted it has agreed to buy its financially-troubled rival FTX.com.

Binance chief executive Changpeng Zhao said the group had signed a non-binding letter of intent “to fully acquire FTX.com,” which is enduring “a significant liquidity crunch”.

FTX’s native FTT token had earlier slumped 25.4 percent to 16.63 dollars, its lowest since early 2021 after Zhao said Binance was liquidating its holdings amid concerns about FTX’s finances.

Bitcoin, which had earlier sunk 5.3 percent to $19,583, ending a relatively bullish October run, shot back above $20,000 as its daily loss to 1.1 percent.

– Key figures around 1530 GMT –

New York – Dow: UP 1.5 percent at 33,344.07 points

EURO STOXX 50: UP 0.8 percent at 3,738.30

London – FTSE 100: UP 0.1 percent at 7,306.14 (close)

Paris – CAC 40: UP 0.4 percent at 6,441.50 (close)

Frankfurt – DAX: UP 1.2 percent at 13,688.75 (close)

Tokyo – Nikkei 225: UP 1.3 percent at 27,872.11 (close)

Hong Kong – Hang Seng Index: DOWN 0.2 percent at 16,557.31 (close)

Shanghai – Composite: DOWN 0.4 percent at 3,064.49 (close)

Pound/dollar: UP at $1.1562 from $1.1514 on Monday

Euro/dollar: UP at $1.0076 from $1.0020

Dollar/yen: DOWN at 145.49 from 146.93 yen

Euro/pound: UP at 87.14 pence from 87.03 pence

West Texas Intermediate: DOWN 1.0 percent at $90.90 per barrel

Brent North Sea crude: DOWN 0.7 percent at $97.22 per barrel

burs-cdw/rl

Global stock markets mostly moved higher on Tuesday as Americans headed to the polls in critical midterm elections.

The dollar clawed back some of its recent losses versus the euro, while Chinese demand expectations were keeping oil prices in check.

Europe’s main markets were showing modest gains some two hours from the close save for a tiny London dip. 

On Wall Street the Dow was up 0.4 percent shortly after the opening bell, while the broader S&P 500 and tech-heavy Nasdaq wobbled around before also moving higher.

“Those US midterm elections today might keep investors on the sidelines a bit before they make any major decisions,” noted Markets.com analyst Neil Wilson.

Polls opened Tuesday in crucial US elections that could decide the political future of both President Joe Biden and his predecessor Donald Trump — who has all but announced he will seek the White House again in 2024.

Biden’s Democrats are facing a gargantuan struggle to hang on to Congress, after a race the president has cast as a “defining” moment for US democracy — while Trump’s Republicans have campaigned hard on kitchen-table issues like inflation and crime.

Polls show Republicans are likely to win at least one house of Congress — and some see the prospect of further Washington gridlock as a scenario that lessens the risk of policy uncertainty.

“Consensus is that investors prefer political deadlock as it prevents any significant shifts in policy,” added Scope Markets analyst James Hughes.

“With that looking like a real possibility, the real market turbulence may appear later in the week.”

Politics aside, investors are also waiting on US inflation data due on Thursday for a pointer on the interest path ahead.

In Asia, the Hong Kong and Shanghai stock markets sank as speculation about a rollback of China’s strict zero-Covid policies fuelled market volatility, but Tokyo ended 1.3 percent ahead.

– Crypto crunch –

Elsewhere, in the world of crypto finance, the native token of the FTX crypto derivatives exchange platform slumped after the CEO of rival platform Binance said his firm was liquidating its holdings amid concerns about FTX’s finances.

Bitcoin was down 5.3 percent to $19,583, ending a relatively bullish October run. and FTX’s FTT token slumped 25.4 percent to 16.63 dollars, its lowest since early 2021.

The crypto industry is still licking its wounds since so-called stablecoin TerraUSD and a linked token, Luna, collapsed in May this year, knocking tens of billions of nominative value off the market.

“Given the current conditions and state of the crypto community, which is still under the horrors of Terra Luna, another shock of FTX’s exchange could draw some serious blood out of the crypto industry, and this means that Bitcoin price could actually revisit the price level of $10K, which will be complete chaos for the crypto market,” said Naeem Aslam. chief market analyst with Avatrade.

– Key figures around 1330 GMT –

New York – Dow: UP 0.4 percent at 32,956.33 points

London – FTSE 100: DOWN 0.1 percent at 7,304.89

Paris – CAC 40: UP 0.1 percent at 6,420.68

Frankfurt – DAX: UP 0.6 percent at 13,607.42

EURO STOXX 50: UP 0.5 percent at 3,725.97

Tokyo – Nikkei 225: UP 1.3 percent at 27,872.11 (close)

Hong Kong – Hang Seng Index: DOWN 0.2 percent at 16,557.31 (close)

Shanghai – Composite: DOWN 0.4 percent at 3,064.49 (close)

Pound/dollar: DOWN at $1.1454 from $1.1514 on Monday

Euro/dollar: DOWN at $1.0002 from $1.0020

Dollar/yen: DOWN at 146.35 from 146.93 yen

Euro/pound: UP at 87.33 pence from 87.03 pence

West Texas Intermediate: DOWN 0.3 percent at $91.47 per barrel

Brent North Sea crude: DOWN 0.1 percent at $97.86 per barrel

A speech by EU Council head Charles Michel scheduled to be broadcast at the opening of a major Chinese trade fair was abruptly cancelled due to wrangling over censorship, diplomats told AFP Tuesday.

The pre-recorded video address was meant to be shown at Friday’s opening of the China International Import Expo (CIIE) in Shanghai, but Michel’s spokesman and three Beijing-based diplomats confirmed it was not broadcast. 

“The Chinese wanted to censor parts of Charles Michel’s speech. Brussels preferred to cancel the speech altogether instead,” one European diplomat told AFP, requesting anonymity due to the sensitivity of the matter. 

Another European diplomat said Chinese authorities wanted to censor all parts of Michel’s speech about the Ukraine crisis, a sensitive issue for Beijing. China seeks to position itself as neutral in the crisis but has offered diplomatic backing to its strategic ally Russia.

The second diplomat said the EU had asked to discuss the censorship but the Chinese side refused, so the video address was cancelled.  

China’s foreign ministry spokesman Zhao Lijian denied any knowledge of the matter during a routine media briefing Tuesday.

Michel’s spokesman Barend Leyts told AFP the EU leader had been invited to address the 5th Hongqiao Forum/CIIE in Shanghai.

“As requested by the Chinese authorities, we had indeed provided a pre-recorded message which was ultimately not shown,” Leyts said.

“We have addressed this through the normal diplomatic channels.”

China-EU relations have deteriorated rapidly since both sides traded sanctions last year over China’s alleged human rights abuses in its Xinjiang region.

Beijing later slapped a trade embargo on virtually all Lithuanian goods in response to Vilnius’ deepening ties with Taiwan, a self-ruled island that China claims as its own territory. 

Since Russia invaded Ukraine in February, European Union leaders have repeatedly lobbied China to condemn Moscow’s actions and withdraw its support for Russia, but to little avail.

The bloc officially considers China a “partner, economic competitor and systemic rival” according to a formulation adopted in 2019. 

Michel, who is president of the EU body consisting of heads of member states, will attend next week’s G20 leaders’ summit in Bali along with senior EU official Ursula von der Leyen and Chinese President Xi Jinping.

Trade ties with China are still important to certain members of the bloc, with German Chancellor Olaf Scholz last week becoming the first G7 leader to visit China in person since the beginning of the Covid pandemic.