US Business

Stock markets and oil prices rallied Friday, with investors largely pricing in more interest rate hikes aimed at taming runaway inflation.

The dollar slid one percent versus the pound and euro after recent hefty gains.

London’s stock market jumped more than 1.5 percent in morning deals, mirroring advances in Paris and Frankfurt, while the British capital’s exchange mourned the death of Queen Elizabeth II.

“We are deeply saddened at the passing of Her Majesty Queen Elizabeth II,” the London Stock Exchange said in a message posted on its website.

“Our sympathies and condolences are with The Royal Family.”

The LSE is expected to shut on the day of the queen’s funeral following her death on Thursday.

“Markets are being very British about the whole thing, carrying on in a fashion that I suspect she would have approved of,” said IG analyst Chris Beauchamp.

– Dollar off highs –

The more confident mood across equity and oil markets was reflected in a cooler dollar, which had surged to multi-decade highs against major peers in recent weeks owing to the Federal Reserve’s hawkish tilt to tighter monetary policy.

The greenback’s softness came even after Federal Reserve chief Jerome Powell reasserted the US central bank’s determination to keep hiking interest rates to fight prices, even at the cost of economic growth.

His warning that “we need to act now forthrightly, strongly” followed comments from his deputy Lael Brainard, who said policymakers would lift borrowing costs for as long as it takes to bring inflation down from 40-year highs.

Still, Wall Street ended in positive territory Thursday, putting markets on course for a weekly gain and easing some pressure after hefty losses in August caused by worries that rising rates would spark a recession.

New York’s rise filtered through to Asia, where Hong Kong rose close to three percent heading into a long weekend.

Edward Moya, analyst at trading platform OANDA, said traders cheered as “Powell stuck to his hawkish script and affirmed the commitment to tighten policy until inflation is back towards their target.

“Wall Street is expecting to see some pricing pressure relief with next week’s inflation report, but that shouldn’t derail the current 75 basis-point pace of tightening.”

There was also some cheer from news that inflation in China had eased slightly in August, giving the government more room to introduce more economy-supporting measures, though the recovery remains hostage to leaders’ strict zero-Covid strategy of growth-sapping lockdowns.

The euro was holding well above parity with the dollar, one day after the European Central Bank announced its own 75 basis-point rise as it warned inflation was “far too high” and likely to stay above target for “an extended period”.

ECB chief Christine Lagarde suggested policy would continue to be tightened for some time.

The yen strengthened as officials began speaking up after the unit approached a 32-year low versus the greenback.

The pick-up came after Bank of Japan chief Haruhiko Kuroda met Prime Minister Fumio Kishida on Friday before saying “the rapid weakening of the yen is undesirable”. 

The talks were used as a sign of intent to act in support of the currency if it continued to weaken. 

– Key figures at around 1045 GMT –

London – FTSE 100: UP 1.6 percent at 7,378.05 points

Frankfurt – DAX: UP 1.5 percent at 13,092.83

Paris – CAC 40: UP 1.8 percent at 6,233.32

EURO STOXX 50: UP 1.8 percent at 3,576.28

Tokyo – Nikkei 225: UP 0.5 percent at 28,214.75 (close)

Hong Kong – Hang Seng Index: UP 2.7 percent at 19,362.25 (close)

Shanghai – Composite: UP 0.8 percent at 3,262.05 (close)

New York – Dow: UP 0.6 percent at 31,774.52 (close)

Euro/dollar: UP at $1.0090 from $1.0001 on Thursday

Pound/dollar: UP at $1.1621 from $1.1500

Euro/pound: DOWN at 86.84 pence from 86.93 pence

Dollar/yen: DOWN at 142.13 yen from 144.07 yen 

Brent North Sea crude: UP 2.0 percent at $90.89 per barrel

West Texas Intermediate: UP 1.5 percent at $84.77 per barrel

burs/bcp/rfj/lth

EU energy ministers met on Friday to seek a united response to the energy shock triggered by Russia’s war on Ukraine, which has sent prices for electricity and heating skyrocketing.

Moscow’s invasion has seen the price of natural gas hit record levels, throwing the EU economy into deep uncertainty, with all eyes on whether Russian President Vladimir Putin will cut off the energy flow entirely.

Before the war, 40 percent of the EU’s gas imports came from Russia, with most of the supply going to Germany, the bloc’s economic powerhouse, now scrambling to come up with new ways to heat homes and power factories.

The European Commission, the EU’s executive, will ask the ministers meeting in Brussels to consider a series of highly complex proposals designed to ease the burden.

“Right now, we need extraordinary intervention measures to address high and very volatile prices,” the EU’s energy commissioner Kadri Simson said, as she arrived for the talks.

“No doubt, ahead of us is a very difficult winter but our energy union is strong and we will prevail.”

The main drive will be to find ways to compensate households and businesses that are struggling to pay their bills and keep activity going.

The EU executive will propose a mechanism that would make non-gas electricity companies, such as nuclear, solar or renewable firms, share windfall revenues won on the back of high prices for electric power.

The market price of electricity in Europe is closely linked to the gas price, meaning non-gas utilities are enjoying a revenue bonanza while companies stuck paying for gas struggle.

Fossil fuel companies would also be levied on their mega profits from the inflated energy prices.

Finding consensus will be difficult with energy policy and dependence on Russia varying greatly across the EU’s 27 countries.

“Today, we are defining a mandate for the European Commission. We have to agree on a series of objectives, a calendar,” French energy minister Agnes Pannier-Runacher said.

– Price cap push stalled –

One proposal that has broad backing is an idea to rescue electricity companies that are struggling to hedge their spending on energy markets that have been extremely volatile.

This would be done by relaxing EU rules on state rescues of companies that are suddenly facing more onerous terms for cash as fears of a crisis spread.

The commission will also ask member states to agree on a united way to cut back on energy demand, with mandatory cuts on usage still considered an option, diplomats said.

“These are proposals where I feel there is quite a large convergence of views among the member states,” a key EU diplomat said.

An idea to cap Russian gas prices, however, is stalled, diplomats warned, amid fears that retribution from Moscow would throw the European economy into even further chaos.

US Secretary of State Antony Blinken, ahead of a visit to Brussels, on Friday urged Europeans to seize the opportunity and finally end the dependence on Russian energy “once and for all”.

But an EU diplomat aware of the state of negotiations warned that there was no majority among the member states in favour of the idea. 

The EU’s energy ministers are set to debate the commission’s ideas, with many countries expected to come to the table with their own proposals.

The commission, which draws up laws that are then ratified by member states and the European Parliament, would then formalise the proposal next week.

Asian markets rallied Friday following a healthy performance on Wall Street, with investors largely pricing in more interest rate hikes aimed at taming runaway inflation.

The more confident mood was reflected in a dip in the dollar, which has surged in recent weeks to multi-decade highs against its major peers owing to the Federal Reserve’s hawkish tilt to tighter monetary policy.

The greenback’s softness came even after Fed chief Jerome Powell reasserted the bank’s determination to keep hiking rates to fight prices, even at the cost of economic growth.

His warning that “we need to act now forthrightly, strongly” followed comments from his deputy Lael Brainard, who said policymakers would lift borrowing costs for as long as it takes to bring inflation down from 40-year highs.

Still, Wall Street ended in positive territory, putting markets on course for a weekly gain and easing some pressure after hefty losses in August caused by worries that rising rates would spark a recession.

“The markets have finally digested the fact that rates are almost certain to go up by 75 basis points when the Fed moves next (on September 21),” JoAnne Feeney, at Advisors Capital Management, told Bloomberg TV.

“What we are seeing though is some recognition that perhaps the sell-off that we saw in the second half of August was a bit overdone,” she said.

New York’s rise filtered through to Asia, where Hong Kong rose close to three percent heading into a long weekend, while Tokyo, Sydney, Shanghai, Singapore, Wellington, Mumbai, Manila and Bangkok were also well up.

London, Paris and Frankfurt also rose in early trading.

OANDA’s Edward Moya said traders cheered as “Powell stuck to his hawkish script and affirmed the commitment to tighten policy until inflation is back towards their target.

“Wall Street is expecting to see some pricing pressure relief with next week’s inflation report, but that shouldn’t derail the current 75 basis-point pace of tightening.”

There was also some cheer from news that inflation in China had eased slightly in August, giving the government more room to introduce more economy-supporting measures, though the recovery remains hostage to leaders’ strict zero-Covid strategy of growth-sapping lockdowns.

On currency markets, the euro was holding well above parity with the dollar after the European Central Bank announced its own 75 basis-point rise as it warned inflation was “far too high” and likely to stay above target for “an extended period”.

ECB chief Christine Lagarde suggested policy would continue to be tightened for some time.

The yen strengthened as officials began speaking up after the unit approached a 32-year low versus the greenback.

The pick-up came after Bank of Japan chief Haruhiko Kuroda met Prime Minister Fumio Kishida on Friday before saying “the rapid weakening of the yen is undesirable”. 

The talks were used as a sign of intent to act in support of the currency if it continued to weaken. 

However, there is an expectation the Japanese unit will see more losses as the BoJ sticks rigidly to its ultra-loose policies despite the Fed’s increasingly hawkish moves.

Oil prices edged up after Thursday’s gains though they remain pressured by ongoing worries about the impact on demand from possible recessions caused by the rate hikes and inflation. 

Weakness in China’s economy and lockdowns in major cities were also cause for concern among commodities traders. 

Reports that President Joe Biden was considering releasing more crude from the US strategic reserves were also weighing on the market.

Washington is concerned that prices could spike in December when European Union sanctions on Russian supplies kick in.

– Key figures at around 0810 GMT –

Tokyo – Nikkei 225: UP 0.5 percent at 28,214.75 (close)

Hong Kong – Hang Seng Index: UP 2.7 percent at 19,362.25 (close)

Shanghai – Composite: UP 0.8 percent at 3,262.05 (close)

London – FTSE 100: UP 1.0 percent at 7,335.91

Euro/dollar: UP at $1.0096 from $1.0001 on Thursday

Pound/dollar: UP at $1.1628 from $1.1500

Euro/pound: DOWN at 86.81 pence from 86.93 pence

Dollar/yen: DOWN at 142.39 yen from 144.07 yen 

West Texas Intermediate: UP 1.2 percent at $84.54 per barrel

Brent North Sea crude: UP 1.3 percent at $90.32 per barrel

New York – Dow: UP 0.6 percent at 31,774.52 (close)

Asian markets rallied Friday following a healthy performance on Wall Street, with investors largely pricing in more interest rate hikes aimed at taming runaway inflation.

The more confident mood was reflected in a dip in the dollar, which has surged in recent weeks to multi-decade highs against its major peers owing to the Federal Reserve’s hawkish tilt to tighter monetary policy.

The greenback’s softness came even after Fed chief Jerome Powell reasserted the bank’s determination to keep hiking rates to fight prices, even at the cost of economic growth.

His warning that “we need to act now forthrightly, strongly” followed comments from his deputy Lael Brainard, who said policymakers would lift borrowing costs for as long as it takes to bring inflation down from 40-year highs.

Still, Wall Street ended in positive territory, putting markets on course for a weekly gain and easing some pressure after hefty losses in August caused by worries that rising rates will spark a recession.

“The markets have finally digested the fact that rates are almost certain to go up by 75 basis points when the Fed moves next (on September 21),” JoAnne Feeney, at Advisors Capital Management, told Bloomberg TV.

“What we are seeing though is some recognition that perhaps the sell-off that we saw in the second half of August was a bit overdone,” she said.

New York’s rise filtered through to Asia, where Hong Kong added more than two percent heading into a long weekend, while Tokyo, Sydney, Shanghai, Singapore, Wellington, Manila and Bangkok were all up.

OANDA’s Edward Moya said traders cheered as “Powell stuck to his hawkish script and affirmed the commitment to tighten policy until inflation is back towards their target.

“Wall Street is expecting to see some pricing pressure relief with next week’s inflation report, but that shouldn’t derail the current 75 basis-point pace of tightening.”

There was also some cheer from news that inflation in China had eased slightly in August, giving the government more room to introduce more economy-supporting measures, though the recovery remains hostage to leaders’ strict zero-Covid strategy of growth-sapping lockdowns.

On currency markets, the euro was holding well above parity with the dollar after the European Central Bank announced its own 75 basis-point rise as it warned inflation was “far too high” and likely to stay above target for “an extended period”.

ECB chief Christine Lagarde suggested policy would continue to be tightened for some time.

The yen was also slightly stronger, having been in danger of hitting a 32-year low versus the greenback, with senior Japanese officials hinting at possible action to curb its losses if the unit fell further.

However, there is an expectation that it will see more losses as the Bank of Japan sticks rigidly to its ultra-loose policies despite the Fed’s increasingly hawkish moves.

Oil prices extended Thursday’s gains though they remain pressured by ongoing worries about the impact on demand from possible recessions caused by the rate hikes and inflation. 

Weakness in China’s economy and lockdowns in major cities were also cause for concern among commodities traders. 

Reports that President Joe Biden was considering releasing more crude from the US strategic reserves were also weighing on the market.

Washington is concerned that prices could spike in December when European Union sanctions on Russian supplies kick in.

– Key figures at around 0320 GMT –

Tokyo – Nikkei 225: UP 0.6 percent at 28,219.70 (break)

Hong Kong – Hang Seng Index: UP 2.2 percent at 19,269.43

Shanghai – Composite: UP 0.7 percent at 3,258.94

Euro/dollar: DOWN at $1.0070 from $1.0001 on Thursday

Pound/dollar: DOWN at $1.1568 from $1.1500

Euro/pound: UP at 87.07 pence from 86.93 pence

Dollar/yen: DOWN at 143.70 yen from 144.07 yen 

West Texas Intermediate: UP 0.4 percent at $83.91 per barrel

Brent North Sea crude: UP 0.7 percent at $89.73 per barrel

New York – Dow: UP 0.6 percent at 31,774.52 (close)

London – FTSE 100: UP 0.3 percent at 7,262.06 (close) 

As Indonesia’s capital Jakarta grapples with overflowing plastic waste and pollution pours into the sea, one burgeoning business is trying to turn rubbish into revenue.

Tridi Oasis Group, which employs 120 people, has recycled more than 250 million bottles since it was founded six years ago.

“I don’t see discarded plastic as trash. For me, it is a valuable material in the wrong place,” 35-year-old founder Dian Kurniawati told AFP.

Indonesia has pledged to reduce plastic waste by 30 percent over the next three years — a mammoth task in the Southeast Asian nation of nearly 270 million people where plastic recycling is rare.

The country generates approximately 7.8 million tonnes of plastic waste every year, with more than half mismanaged or disposed of improperly, according to the World Bank.

Kurniawati’s company receives plastic from recycling centres across the greater Jakarta area — which has 30 million people — at its factory in Banten province outside the city.

Then the company exports recycled plastic to European countries and also distributes it locally to be processed and used as packaging or textiles. 

Kurniawati resigned from her consultant job to start the firm, tackling head-on the massive challenges faced by the world’s fourth most populous country in dealing with the plastic crisis.

As one of the initiators of the “Beach Clean Up Jakarta” movement, she saw how Jakarta is littered with plastic waste and was frustrated that little was being done to change the situation.

– ‘Our problem’ – 

Hundreds of piles of crushed clear plastic bottles sit piled neatly in the Banten factory, ready to be sorted to make sure no labels or caps are left behind. 

The bottles are then cleaned thoroughly to eliminate contamination before being cut into small flakes, ready to be transported to clients for processing and reuse as packaging or textiles. 

Fajar Sarbini, a 24-year-old employee, hopes more Indonesians will start recycling.

“People throw away their waste mindlessly, they should at least sort out sharp materials so they won’t hurt garbage collectors,” he said.

Jakarta does not have a municipal collection system for household waste and has no incineration facilities.

With green trends rising and the will of younger generations to live more sustainably growing, the country is not without hope. 

“Indonesia is catching up and the acceleration is quite fast because we got help from social media and youth campaigns,” Kurniawati said. 

But she said the waste problem facing the country is enormous and the regulation to encourage plastic to be recycled is lacking.

“Plastic waste is our problem and solving it takes a concerted effort from everybody,” she said.

“It can’t be solved by just the government or recycling companies.” 

EU energy ministers on Friday will attempt to forge a united response to the energy shock from Russia’s war on Ukraine that has sent prices for electricity and heating skyrocketing.

Moscow’s invasion has seen the price of natural gas hit record levels, throwing the EU economy into deep uncertainty with all eyes on whether Russian President Vladimir Putin will cut off the energy flow entirely.

Before the war, 40 percent of the EU’s gas imports came from Russia, with most of the supply going to Germany, the bloc’s economic powerhouse that is now scrambling to come up with new ways to heat homes and power factories.

The European Commission, the EU’s executive, will ask the ministers meeting in Brussels to consider a series of highly complex proposals designed to ease the burden.

The main drive will be to find ways to compensate households and businesses that are struggling to pay their bills and keep activity going.

The EU executive will propose a mechanism that would see non-gas electricity companies, such as nuclear, solar or renewable firms, share windfall revenues won on the back of high prices for electric power.

The market price of electricity in Europe is closely linked to the gas price, meaning non-gas utilities are enjoying a revenue bonanza while companies stuck paying for gas struggle.

Fossil fuel companies would also be levied on their mega profits from the inflated energy prices.

There needs to be a “discussion without qualms” about a potential solidarity levy on “energy companies that make windfall profits in times of war”, said Austrian Energy Minister Leonore Gewessler ahead of the talks.

– Price cap push stalled –

Another proposal that has broad backing is an idea to rescue electricity companies that are struggling to hedge their spending on the financial markets.

This would be done by relaxing EU rules on state rescues of companies that are suddenly facing more onerous terms for cash as fears of a crisis spread.

The commission will also ask member states to agree on a united way to cut back on energy demand, with mandatory cuts on usage still considered an option, diplomats said.

“These are proposals where I feel there is quite a large convergence of views among the member states,” said a key EU diplomat.

An idea to cap Russian gas prices however is stalled, diplomats warned, with fears rife that the retribution from Russia would throw the European economy into even further chaos.

EU chief Ursula von der Leyen on Wednesday urged member states to agree a price cap on Russian gas, a measure that Putin has warned would be “an absolutely stupid decision”.

But an EU diplomat aware of the state of negotiations warned that there was no majority among the member states in favour of the idea. 

The EU’s energy ministers are set to debate the commission’s ideas, with many countries expected to come to the table with their own proposals.

The commission, which draws up laws that are then ratified by member states and the European Parliament, would then formalise the proposal next week.