Economy
Asian Equities Close Mixed as US Federal Reserve Slashes Rates
By Investors Hub
Asian stocks turned in a mixed performance on Thursday after the U.S. Federal Reserve cut interest rates, as widely expected but indicated it is ready to hold off on further rate cuts for now.
Investors also digested news that Chile has canceled the Asia-Pacific Economic Cooperation summit scheduled to be held in Santiago in mid-November, citing violent protests across the country.
U.S. President Donald Trump and Chinese President Xi Jinping were due to meet at the summit to discuss and possibly sign phase one of a U.S.-China trade deal.
Chinese shares fell after the release of weak economic data. The benchmark Shanghai Composite Index dropped 10.26 points, or 0.4 percent, to 2,929.06, while Hong Kong’s Hang Seng Index gained 239.01 points, or 0.9 percent, to end at 26,906.72.
Chinese factory activity slipped to an eight month-low in October, official data showed. The manufacturing PMI fell to 49.3 from 49.8 a month ago. China’s service sector also logged weaker growth in October, with the corresponding index dipping to 52.8 from 53.7 in September.
Japanese shares eked out modest gains after the Bank of Japan maintained its policy rates but signaled further monetary easing going forward. The central bank said short and long-term interest rates are expected to remain at current or lower levels as long as it is necessary to achieve its price stability target.
A rebound in industrial output also helped underpin investor sentiment. Industrial production in Japan was up a seasonally adjusted 1.4 percent month-on-month in September, the government said in a preliminary report. That beat forecasts for an increase of 0.4 percent following the 1.2 percent decline in August.
On a yearly basis, industrial output was up 1.1 percent – again beating expectations for a decline of 0.1 percent following the 4.7 percent drop in the previous month.
The Nikkei 225 Index rose 83.92 points, or 0.4 percent, to 22,927.04, while the broader Topix closed marginally higher at 1,667.01.
Sony soared 4.1 percent after posting the highest operating profit for a second quarter on the back of strong demand for image sensors for mobile phones. Market heavyweight SoftBank Group advanced 3.7 percent and Fast Retailing added 1.3 percent.
Apple Inc. supplier Alps Alpine jumped 8.7 percent after Apple forecast sales for the crucial holiday shopping quarter ahead of Wall Street expectations.
Australian markets fell modestly, with lower oil prices and weak results from Australia and New Zealand Banking Group weighing on sentiment.
The benchmark S&P/ASX 200 Index dropped 26.10 points, or 0.4 percent, to 6,663.40, while the broader All Ordinaries Index ended down 21.80 points, or 0.3 percent, at 6,772.90.
ANZ tumbled 3.3 percent as the country’s fourth-largest lender missed market expectations for second-half profits. Commonwealth Bank of Australia, Westpac Banking Corp and National Australia Bank all fell more than 1 percent.
A drop in oil prices also pulled down energy stocks, with Beach Energy shares falling as much as 2.6 percent.
Meanwhile, gold miners Evolution Mining and Newcrest edged up slightly as gold prices climbed on dollar weakness after the Federal Reserve cut interest rates for the third time this year.
In economic news, private sector credit in Australia was up 0.2 percent sequentially in September, the Reserve Bank of Australia said in a report, unchanged from the previous month.
Separately, official data showed that the total number of building approvals issued in Australia was up a seasonally adjusted 7.6 percent month-on-month in September.
Seoul stocks ended off their day’s highs after Samsung Electronics said its earnings would remain weak despite a recovery in chip sales.
The Kospi jumped more than 1 percent earlier in the day before ending the session up 3.21 points, or 0.2 percent, at 2,083.48. Samsung Electronics gave up early gains to end on a flat note.
By Adedapo Adesanya
The Naira appreciated against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, July 17, by N1.35 or 0.07 per cent to N1,380.18/$1 from N1,381.53/$1.
It also improved its value against the Pound Sterling in the same market segment during the session by N11.75 to trade at N1,854.42/£1 compared with the previous day’s N1,866.17/£1, and gained N5.69 against the Euro to sell at N1,576.99/€1 versus Thursday’s closing price of N1,582.68/€1.
In the same vein, the Naira chalked up N1 against the United States currency yesterday at the GTBank forex desk to quote at N1,388/$1, in contrast to the preceding day’s N1,389/$1, but closed flat at the black market at N1,405/$1.
The appreciation of the Nigerian currency on Friday came amid fresh signals that Nigeria is building its external reserves for protection against shocks and excessive currency volatility.
The Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, said the country’s gross reserves had risen above approximately $52 billion by 15 July, while net reserves had increased from about $3 billion when the current CBN leadership took office to more than $40 billion.
Mr Cardoso linked the increase in reserves to reforms that had restored greater confidence in the foreign exchange system. He also pointed to efforts to diversify foreign currency inflows, including policies designed to increase remittances through official channels.
He noted that monthly diaspora remittances had risen above $600 million and the CBN expected them to reach approximately $1 billion by the end of 2026. The target is part of a broader effort to grow reserves through recurring inflows rather than temporary measures.
The improvement, he argued, had strengthened Nigeria’s capacity to respond when unexpected events threatened market stability.
The apex bank has also launched a new digital platform that will track every foreign exchange transaction involving Bureau De Change (BDC) operators, marking a major step in its efforts to improve transparency and strengthen oversight of Nigeria’s retail forex market.
As for the crypto market, prices were up as markets overlooked geopolitical developments and macro forces weighing on the whole market ecosystem rather than anything crypto-specific, with Cardano (ADA) up by 4.6 per cent to $0.1661.
Bitcoin (BTC) jumped by 1.8 per cent to $63,968.32, Ethereum (ETH) improved by 0.9 per cent to $1,843.88, Dogecoin (DOGE) also rose by 0.9 per cent to $0.0723, Solana (SOL) soared by 0.6 per cent to $74.90, Ripple (XRP) also appreciated by 0.6 per cent to $1.08, and Binance Coin (BNB) advanced by 0.1 per cent to $567.32.
However, TRON (TRX) depreciated by 0.2 per cent to close at $0.3218, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Adedapo Adesanya
The prices of the crude oil grades rose Friday, as fighting between the US and Iran continued in the Middle East, leading to further attacks in Bahrain, Jordan, Kuwait, Oman, Qatar and Syria.
Brent crude futures advanced by about 4.6 per cent to $88.10 per barrel, while the US West Texas Intermediate (WTI) futures gained about 4.5 per cent to settle at $82.49 per barrel.
US forces stepped up attacks on Iranian sites, reportedly striking key bridges, railways, and an airport, prompting retaliatory action by Iran.
US Central Command said that it had completed its sixth consecutive night of strikes against Iran, hitting dozens of military targets such as military logistics infrastructure and maritime capabilities.
Centcom said more than 50,000 service members were operating across the Middle East, adding that they “remain vigilant, lethal, and ready.”
Iran said it attacked the US targets in Bahrain, Jordan, Kuwait, Oman, Qatar and Syria in retaliation for the latest round of strikes by the Americans.
Kuwait said Iran attacked a power and water desalination plant as fighting escalated in the Persian Gulf, saying that the attack damaged the facility that sparked a fire that affected a large number of its electricity-generating units, according to The Kuwait Times.
Kuwait is heavily dependent on desalination plants for potable water. Analysts have long feared that Iran would strike infrastructure that is critical to supporting civilian life in the Middle East.
A tanker was hit by a projectile off the coast of Oman, causing minor damage, the United Kingdom Maritime Trade Operations Centre said in an incident report Friday. Iran has repeatedly attacked tankers over the past week as it tries to force civilian ships to transit the Strait of Hormuz through its waters.
The escalating fighting comes as the fragile truce reached last month has collapsed, once again disrupting energy flows through the strategically vital Strait of Hormuz, which typically handles around 20% of the world’s oil traffic.
Earlier in the week, President Donald Trump said American forces would target Iran’s infrastructure next week unless the two sides reached a diplomatic breakthrough.
Iran has asked Yemen’s Houthis to close the Red Sea oil route if the US targets Iranian power infrastructure.
Market analysts noted that Iran and the US still have strong economic incentives to avoid a complete breakdown in talks, with the US seeking lower oil prices ahead of the November midterm elections and Iran reluctant to forgo economic incentives.
By Adedapo Adesanya
Despite signs that Nigeria’s headline inflation is easing, rising food prices continue to threaten the country’s inflation outlook, the chief executive of the Centre for the Promotion of Private Enterprise (CPPE), Mr Muda Yusuf, has warned.
He noted that structural inflationary pressures in the real economy remain pronounced despite improving macroeconomic stability.
In a policy brief released following the inflation report, he noted that headline inflation eased marginally, while month-on-month change moderated from 1.75 per cent to 1.66 per cent, indicating that headline inflation has largely plateaued.
According to him, the dominant concern in the latest inflation report is the renewed acceleration in food inflation.
This growth, he said, suggested that food prices have resumed an upward trajectory after a brief period of moderation.
Warning that a renewed increase in food inflation has significant economic and social implications, he stressed that food inflation remained the biggest driver of Nigeria’s cost-of-living crisis, stressing that rising food prices continue to erode household purchasing power, worsen poverty and food insecurity while weakening the inclusiveness of the current reform programme.
He maintained that sustained moderation in food prices is critical to improving citizens’ welfare and strengthening public confidence in the ongoing economic reforms.
Acknowledging the easing of core inflation as encouraging, he drew attention to the persistence of urban inflation.
At 16.08 per cent, urban inflation exceeded the national headline inflation rate of 15.91 per cent, while month-on-month urban inflation increased from 1.99 per cent to 2.13 per cent.
According to Mr Yusuf, the figures indicated that inflationary pressures remained particularly intense across urban centres.
He attributed the rising urban inflation partly to increasing population displacement from rural communities affected by insecurity, expressing worry that as more households migrate to urban areas, demand for housing, transportation, utilities and other essential services would increase, adding to inflationary pressures and creating additional urbanisation challenges.
Addressing insecurity in farming communities, he said, was important not only for protecting lives and property and boosting agricultural output but also for easing cost pressures in urban centres, adding that the June CPI data reinforced the view that Nigeria’s inflation challenge is predominantly structural rather than monetary.
On the monetary policy outlook, he said the data do not justify further monetary tightening, arguing that headline inflation has largely stabilised.
The CPPE chief expected the Monetary Policy Committee (MPC) to retain the current monetary policy rate at its next meeting, adding that the priority is for monetary and fiscal authorities to work together to accelerate structural reforms to expand food supply, improve logistics, reduce energy and production costs, lower debt service costs, as well as strengthen domestic value chains.
