US Business

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.

China ramped up crude oil imports from Russia in May, customs data showed Monday, helping to offset losses from Western nations scaling back Russian energy purchases over the invasion of Ukraine.

The spike means Russia has overtaken Saudi Arabia to become China’s top oil provider as the West sanctions Moscow’s energy exports.

The world’s second-biggest economy imported around 8.42 million tonnes of oil from Russia last month — a 55 percent rise on-year.

Beijing has refused to publicly condemn Moscow’s war and has instead exacted economic gains from its isolated neighbour.

It imported 7.82 million tonnes of oil from Saudi Arabia in May.

China bought $7.47 billion worth of Russian energy products last month, about $1 billion more than in April, according to Bloomberg News.

The new customs data comes four months into the war in Ukraine, with buyers from the United States and Europe shunning Russian energy imports or pledging to slash them over the coming months.

Asian demand is helping to staunch some of those losses for Russia, especially buyers from China and India.

India bought six times more Russian oil from March to May compared with the same period last year, while imports by China during that period trippled, data from research firm Rystad Energy shows.  

“For now, it is just pure economics that Indian and Chinese refiners are importing more Russian-origin crude oil… as such oil is cheap,” said analyst Wei Cheong Ho.

According to the International Energy Agency’s latest global oil report, India has overtaken Germany in the last two months as the second-largest importer of Russian crude.

China has been Russia’s biggest market for crude oil since 2016.

– ‘No limits’ –

Days before Moscow’s invasion of Ukraine, China’s President Xi Jinping greeted his Russian counterpart Vladimir Putin in Beijing where the two countries declared a bilateral relationship of “no limits”.

Although demand in China remains muted due to Covid restrictions, there has been some improvement in the past month as cities loosen controls after the country’s worst outbreak since the early days of the pandemic.

This has allowed supply chain problems to ease and industrial production to pick up, official data shows.

China’s overall imports from Russia spiked 80 percent in May from a year ago to $10.3 billion, according to customs data.

Beijing’s purchases of Russian liquefied natural gas surged 54 percent on-year to 397,000 tonnes, even as overall imports of the fuel fell.

China has been accused of providing a diplomatic shield for Russia by criticising Western sanctions on Moscow and arms sales to Kyiv.

– Joint goals –

Once bitter Cold War rivals, Beijing and Moscow have stepped up cooperation in recent years as a counterbalance to what they see as US global dominance.

This month they unveiled the first road bridge linking the countries, connecting the far eastern Russian city of Blagoveshchensk with the northern Chinese city of Heihe.

Last week Xi assured Putin of China’s support on Russian “sovereignty and security” in a call between the two leaders. 

The Kremlin said the pair had agreed to ramp up economic cooperation in the face of “unlawful” Western sanctions.

The West has implemented unprecedented sanctions on Russia in retaliation for its war in Ukraine, forcing Moscow to find new markets and suppliers to replace foreign firms that have left Russia following the invasion.

The 27-nation European Union agreed in late May to a package of sanctions that would halt the majority of Russian oil imports.

The United States has already banned all Russian oil but European nations are much more dependent on these imports.

Energy is a major source of income for Putin’s government, and Western nations are trying to isolate Moscow and impede its ability to continue the war.

Europe’s main stock markets rose on Monday after a mixed Asian session, as traders set aside recession fears and French political uncertainty.

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 equities rallied 1.0 percent in midday deals on Monday, with sentiment boosted by news of a blockbuster takeover offer for publisher Euromoney.

But the eurozone was more muted. Frankfurt stocks were up 0.5 percent and Paris gained just 0.3 percent, while oil prices languished on stubborn demand concerns.

Markets were rocked last week by a fierce sell-off 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.

“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.

Investors digested news that French President Emmanuel Macron and his allies faced political deadlock after losing their parliamentary majority in a stunning blow for the president and his reform plans.

Wall Street, shut on Monday for a US public holiday, had risen on Friday.

There is a sense among traders, however, that stock markets still have some way down to go before they find a bottom, with data suggesting economies are beginning to feel the pinch.

Cleveland Fed chief Loretta Mester added to the worry. She said the risk of a recession in the United States 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 drags on and uncertainty continues to reign.

Oil prices slid on Monday, extending 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 cuts off imports of the commodity from Russia in response to the Ukraine war.

– Key figures at around 1115 GMT –

London – FTSE 100: UP 1.0 percent at 7,085.94 points

Frankfurt – DAX: UP 0.5 percent at 13,192.85

Paris – CAC 40: UP 0.3 percent at 5,900.21

EURO STOXX 50: UP 0.6 percent at 3,457.35

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 $1.0538 from $1.0499 late Friday

Pound/dollar: UP at $1.2256 from $1.2241

Euro/pound: UP at 85.98 pence from 85.77 pence

Dollar/yen: DOWN at 134.74 yen from 135.02 yen

Brent North Sea crude: DOWN 0.4 percent at $112.72 per barrel

West Texas Intermediate: DOWN 0.2 percent at $109.38

Brussels Airport cancelled all outbound flights on Monday after most security staff joined a nationwide strike for better pay as soaring inflation hit workers’ purchasing power.

The stoppage kicked off a week of travel chaos in several parts of Europe, notably a massive rail strike in Britain from Tuesday and, later on, strikes hitting the continent’s biggest airline Ryanair in multiple countries.

Brussels Airport informed passengers on its site and social media that all departing flights were scrapped for the day — 232 in total.

Only a quarter of arriving flights were still operating. Freight traffic was unaffected.

The departure hall at the airport was largely empty, with only around 100 passengers inside, some lining up to change tickets or get assistance while others slumped resignedly in seats or slept on the floor.

Oleksandr Zayikin, a Ukrainian merchant mariner who had been away for four months, told AFP the strike had prevented a reunion with his wife in Istanbul. He had left before Russia’s invasion of his country.

“I’m upset,” the 29-year-old said, adding he would now probably find a Brussels hotel for a few days.

“In Ukraine it’s not a usual thing, we don’t have such strikes. But I really respect that people do that,” he said.

Maria Antonia, a 20-year-old Romanian student who had a flight booked to return to Bucharest, didn’t see the last-minute messages the airport had written for passengers from late Sunday.

“We didn’t know it was cancelled until we got to the airport,” she said.

“That was a little bit of a hassle. But we can manage it I think.”

Passengers were told to contact their airline to reschedule their flights or seek a refund.

German travel group TUI arranged to have flights that were to have left from Brussels take off from some regional Belgian airports.

The national strike in Belgium was called by the three main unions to push for higher salaries as inflation sent the cost of living higher.

A demonstration was to take place later Monday in the centre of Brussels, with unions expecting up to 70,000 people to march.

China ramped up crude oil imports from Russia in May, customs data showed Monday, helping to offset losses from Western nations scaling back Russian energy purchases over the invasion of Ukraine.

The spike means Russia has now overtaken Saudi Arabia to become China’s top oil provider as the West continues to sanction Moscow’s energy exports.

The world’s second-biggest economy imported around 8.42 million tonnes of oil from Russia last month — a 55 percent on-year rise — as Beijing continues to refuse to publicly condemn Moscow’s war while exacting economic gains from its isolated neighbour.

China imported 7.82 million tonnes of oil from Saudi Arabia in May.

In total, China bought $7.47 billion worth of Russian energy products last month, about $1 billion more than April, according to Bloomberg News.  

The new customs data comes four months into the war in Ukraine, with buyers from the US and Europe shunning Russian energy imports or pledging to slash them over the coming months.

But while European powers are scaling back and Russia’s energy exports are falling, Asian demand is helping to staunch some of those losses, especially in China and India.

According to the International Energy Agency’s latest global oil report, India has overtaken Germany as the second-largest importer of Russian crude in the last two months. 

China has been Russia’s biggest market for crude oil since 2016. 

– ‘No limits’ –

Days before Moscow’s invasion of Ukraine, China’s President Xi Jinping greeted his Russian counterpart Vladimir Putin in Beijing, with the two countries declaring a bilateral relationship of “no limits”. 

Although demand in China remains muted, there has been some improvement in the past month as cities began to loosen virus restrictions after the country’s worst Covid outbreak since the early days of the pandemic.

This has allowed some supply chain problems to ease and industrial production to pick up, official data showed.

China’s overall imports from Russia spiked 80 percent from a year ago in May to $10.3 billion, customs data added.

Apart from oil, Beijing’s purchases of liquefied natural gas from Russia also surged 54 percent on-year in May to 397,000 tonnes, even as overall imports of the fuel fell.

Beijing — which has repeatedly refused to condemn Moscow’s bloody invasion of Ukraine — has also been accused of providing a diplomatic shield for Russia by blasting Western sanctions and arms sales to Kyiv.

Once bitter Cold War enemies, Beijing and Moscow have stepped up cooperation in recent years as a counterbalance to what they see as US global dominance.

– Joint goals –

Earlier this month they unveiled the first road bridge linking the two countries, connecting the far eastern Russian city of Blagoveshchensk with the northern Chinese city of Heihe.

Last week, President Xi Jinping assured President Vladimir Putin of China’s support on Russian “sovereignty and security” on a call between the two leaders. 

The Kremlin said the pair had agreed to ramp up economic cooperation in the face of “unlawful” Western sanctions.

The West has adopted unprecedented sanctions against Russia in retaliation for its war in Ukraine, and Moscow is looking for new markets and suppliers to replace the major foreign firms that left Russia following the invasion.

The 27-nation European Union agreed in late May to a package of sanctions that would halt the majority of Russian oil imports.

While the United States had already banned Russian oil, European nations are much more dependent on those imports.

Energy is a major source of income for Putin’s government, and Western nations are trying to isolate Moscow and impede Moscow’s ability to continue the war.