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Asian shares head for worst month since Covid-19 started

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Asian shares on Friday were headed for their worst month since the onset of COVID-19, while jitters in currency and bond markets persisted over hawkish talk from central banks, worries about a global recession and rising geopolitical risk.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.3pc, taking its monthly loss to a staggering 13pc – the largest since March 2020 when the nascent pandemic threw financial markets into chaos.

Japan’s Nikkei tumbled 2.1pc, Australia’s resources-heavy shares dropped 1.2pc, while Hong Kong and China’s mainland blue-chips gave up earlier gains to trade slightly lower ahead of long holidays.

Barring a sharp reversal, Hong Kong shares were heading for their worst quarter since 2001 and Chinese blue-chips were set to record their biggest quarterly loss since a stock market meltdown in 2015.

Offshore risk appetite remained fragile. The pan-region Euro Stoxx 50 futures were up 0.1pc, FTSE futures eased 0.1pc and S&P 500 futures rose 0.1pc.

“The ‘troubling triad’ of rising rates, slowing growth and strong dollar have all intensified,” said Timothy Moe, chief Asia-Pacific equity strategist at Goldman Sachs.

“We reduce our forecasts further and expect largely flat regional performance over the next two quarters with better returns on a 12-month view.”

Japan’s factories ramped up output in August and China’s factory activity returned to growth this month, data showed, but that failed to soothe investors for long.

The Reserve Bank of India also raised the repo rate by 50 basis points to 5.90pc on Friday as widely expected, as it continues to battle painfully high inflation and a rapidly weakening rupee.

Currency traders remained edgy given the risk of central bank interventions. Sterling rose 0.3pc in thin and volatile trading to $1.12, having its best week since end of 2020, after intervention from the Bank of English to buy long-dated bonds calmed markets.

The dollar climbed 0.3pc against a basket of major currencies on Friday and is up 3.1pc for the month, the best since April.

The U.S. currency’s relentless rise has pushed the yen, Chinese yuan and many emerging market currencies to long-term lows, piling pressures on policymakers to step in.

China’s central bank has asked major state-owned banks to be prepared to sell dollars for yuan in offshore markets.

In Europe, Britain’s gilt market has been roiled by government plans for heavy borrowing to finance spending.

Prime Minister Liz Truss said on Thursday she will stick to her plan to reignite economic growth, breaking her silence after nearly a week of financial market chaos.

German Chancellor Olaf Scholz also set out a 200 billion euro ($196 billion) “defensive shield”, including a gas price brake and a cut in sales tax for the fuel, to protect companies and households from the impact of soaring energy prices.

That came as Europe braces for a double-digit inflation reading later in the day, as the European Central Bank voiced support for another big interest rate hike. German inflation accelerated to 10.9pc this month, far beyond market expectations.

“Increased uncertainty and risks – and higher interest rates – logically see higher volatility in financial markets. Even G7 countries are now trading like emerging markets,” said Jan Lambregts, head of global economics and markets research at Rabobank.

“Indeed, markets now also see a far wider range of possible outcomes when it comes to FX and rate movements.”

U.S. Treasuries stabilised somewhat after a renewed bout of selling on hawkish talks from Federal Reserve officials, with the yield on 10-year bonds up by 5 basis points to 3.7943pc.

The two-year Treasury yield rose a similar amount to 4.2188pc.

A strong U.S. jobs market, with weekly jobless claims hitting a five-month low, adds to the case for more aggressive tightening from the Fed.

Overnight hawkish comments from Fed officials offered no indication that recent foreign exchange and bond market drama will lead the central bank to back off from its rate hike course.

Further weighing on market sentiment, Russian President Vladimir Putin is scheduled to announce the annexation of four Ukrainian regions on Friday, a move the United Nations said would mark a “dangerous escalation” and jeopardize prospects for peace.

Oil prices eased. U.S. crude lost 0.3pc to trade at $81.04 a barrel while Brent crude fell 0.7pc to $87.89 per barrel.

Gold was slightly higher. Spot gold was traded at $1662.5 per ounce. ($1 = 1.0195 euros)

 

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World leaders urge restraint as Israel says it will respond to Iran’s attack

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Israel’s military chief said Monday that the country will respond after Iran launched an attack involving hundreds of drones, ballistic missiles and cruise missiles. World leaders are urging Israel not to retaliate.

British Prime Minister Rishi Sunak says “all sides must show restraint” to avoid a rising spiral of violence in the Middle East. French President Emmanuel Macron said Paris will try to “convince Israel that we must not respond by escalating.”

The Iranian attack on Saturday marked the first time Iran has launched a direct military assault on Israel, despite decades of enmity dating back to the country’s 1979 Islamic Revolution. The attack happened less than two weeks after a suspected Israeli strike in Syria that killed two Iranian generals in an Iranian consular building.

An Israeli military spokesman said that 99% of the drones and missiles launched by Iran were intercepted.

Israel and Iran have been on a collision course throughout Israel’s six-month war against Hamas militants in the Gaza Strip. The war erupted after Hamas and Islamic Jihad, two militant groups backed by Iran, carried out a devastating cross-border attack on Oct. 7 that killed 1,200 people in Israel and kidnapped 250 others.

An Israeli offensive in Gaza has caused widespread devastation and killed over 33,700 people, according to local health officials.

Israel’s military chief says the country will respond to Iran’s missile strike over the weekend.

Lt. Gen. Herzi Halevi said Monday that Israel is still considering its steps. But he said the Iranian strike of missiles and attack drones “will be met with a response.”

Halevi spoke during a visit to the Nevatim air base, which Israel says suffered light damage in the Iranian attack.

Prime Minister Benjamin Netanyahu has been huddling with top officials to discuss a possible response

Pro-Palestinian demonstrators blocked a freeway leading to three Chicago O’Hare International Airport terminals Monday morning, temporarily stopping vehicle traffic into one of the nation’s busiest airports and causing headaches for travelers.

Protesters linked arms and blocked lanes of Interstate 190 around 7 a.m., a demonstration they said was part of a global “economic blockade to free Palestine,” according to Rifqa Falaneh, one of the organizers. Similar demonstrations blocking a freeway in California’s Bay Area also took place Monday.

O’Hare warned travelers on the social platform X to take alternative forms of transportation with car travel “substantially delayed this morning due to protest activity.”

A United Nations Security Council meeting on Yemen on Monday touched on the risk of escalation after Iran’s attack on Israel.

Diplomats are calling this “a particularly dangerous moment in the Middle East,” as U.N. special envoy for Yemen Hans Grundberg said.

“The need for broader regional de-escalation is acute,” he added. “I share the secretary-general’s alarm about the very real danger of regionwide escalation and his urging to all parties for maximum restraint.”

A U.N. Security Council emergency meeting Sunday to discuss the attack ended without any action taken.

“Now is the time to defuse and de-escalate,” U.N. Secretary-General António Guterres said. “Now is the time for maximum restraint.”

British Prime Minister Rishi Sunak says “all sides must show restraint” to avoid a rising spiral of violence in the Middle East.

Sunak on Monday condemned Iran’s attack on Israel as “a reckless and dangerous escalation.” He said he would speak to Israeli Prime Minister Benjamin Netanyahu to express the U.K.’s solidarity with Israel “and to discuss how we can prevent further escalation.”

Britain is urging Israel to refrain from a retaliatory strike. Sunak told lawmakers in the House of Commons that “we want to see calmer heads prevail.”

He said Israel’s security is “non-negotiable,” but added that the conflict in Gaza must be brought to an end, and the world “must invest more deeply in the two-state solution.”

Iran had about 150 ballistic missiles capable of reaching Israel from Iranian territory, and appears to have used up most of that current stockpile in its weekend attack, retired Gen. Frank McKenzie, the former head of U.S. CENTCOM said Monday.

McKenzie discussed the attack in a panel discussion with the Jewish Institute for National Security of America, a Washington-based think tank and lobbying group.

McKenzie argued that Iran’s expenditure of those 150 long-range missiles, out of a total ballistic missile stockpile of about 3,000, showed that Iran’s barrage on Israel “was a maximum effort. It was an indiscriminate effort.”

The U.S. and its partners in the region are easily able to track when Iran brings its ballistic missiles out of storage and positions them on launch pads, he said.

When Iran launches, deep space sensors detect that immediately, he said. Radars in the region then catch when any missiles break the radar plane, he said.

Especially given the distance involved, “it is hard for Iran to generate a bolt from the blue against Israel,” McKenzie said.

The Kremlin is “extremely concerned” about the situation in the Middle East, its spokesman said Monday.

Dmitry Peskov told his daily conference call with reporters that Moscow urges “all countries in the region to show restraint.”

“Further escalation is in no one’s interests. Therefore, of course, we advocate that all disagreements be resolved exclusively by political and diplomatic methods,” Peskov said.

AUSTRIAN FOREIGN MINISTER CONDEMNS IRAN’S ATTACK

Austria’s foreign minister has spoken with his Iranian counterpart to condemn Tehran’s attack on Israel and call on Iran to rein in its proxies in the Middle East.

Alexander Schallenberg said in a statement he told Iran’s Hossein Amirabdollahian on Monday that “we cannot afford another front in the Middle East. There would only be losers, in the region and beyond.”

Schallenberg said he also urged Amirabdollahian to “exercise Iran’s influence on proxies in the region.”

Austria hosted talks on Iran’s nuclear agreement with world powers in 2015.

Amirabdollahian already spoke on Sunday with German Foreign Minister Annalena Baerbock. A spokesperson for Baerbock, Christian Wagner, said Iran’s ambassador to Germany was summoned to the Foreign Ministry in Berlin on Monday.

OIL PRICES FALL AFTER IRAN’S STRIKE ON ISRAEL IS THWARTED

Oil prices fell Monday after Iran’s missile and drone strike failed to cause widespread damage in Israel and the U.S. administration made it clear it did not support a wider war with Iran.

Analysts say the chief risk to oil prices from the Israel-Hamas war is if the conflict escalates and disrupts oil supplies from Iran and Persian Gulf producers through the Strait of Hormuz choke point.

The stance taken by Iran, which said the matter “can be deemed concluded” with the retaliatory strikes, and the U.S. position reassured oil traders, who sent the price of international benchmark Brent crude 0.7% lower to $89.82 per barrel in Monday morning trading. That is below the levels just above $90 per barrel seen on Friday before the weekend attacks.

Risks that could send prices higher include any Israeli strike against Iranian oil facilities or tougher enforcement of sanctions against Iran by the U.S. “Any retaliation by Israel … especially one that targets Iran’s oil facilities, will have major implications for energy markets,” said analysts at S&P Global.

Tougher sanctions enforcement against Iranian oil shipments by the U.S. could raise oil prices but would risk higher inflation and pump prices for U.S. motorists in an election year.

4 ISRAELI SOLDIERS WOUNDED IN A BLAST ALONG THE BORDER WITH LEBANON

The Israeli military says four soldiers were wounded by an explosion along the northern border with Lebanon.

The military said that the source of the explosion, which occurred overnight, was still unclear. It left one soldier severely wounded, two moderately wounded, and one with light injuries.

The Iran-backed Lebanese militant group Hezbollah said Monday that mines they set up in southern Lebanon near the border detonated after Israeli ground troops encroached on Lebanese territory, incurring casualties.

The incident comes as tensions in the region soared after an Iranian air assault was thwarted by Israel and its allies. Israel has not said whether it will respond.

Since the outbreak of the Israel-Hamas war in Gaza on Oct. 7, concerns have grown that near-daily clashes along the border between Israel and Hezbollah could escalate into a full-scale war.

GERMAN CHANCELLOR CALLS ON ISRAEL TO CONTRIBUTE TO DE-ESCALATION

German Chancellor Olaf Scholz is calling on Israel to “contribute to de-escalation” in the Middle East following Iran’s attack on the country.

Scholz told reporters in Shanghai on Monday that “Iran must stop this aggression.”

Asked whether he will attempt to dissuade Israeli Prime Minister Benjamin Netanyahu from a military response to Saturday night’s attack, he said there’s widespread agreement that Israel’s success in largely repelling the attack with allies’ help was “really impressive.”

He added that “this is a success that perhaps also should not be thrown away. Hence also our advice to contribute to de-escalation themselves.”

Germany is a staunch ally of Israel.

AFRICAN GOVERNMENTS URGE ISRAEL, IRAN TO AVOID ESCALATION

Some African governments are urging Israel and Iran to avoid an escalation of the conflict.

While Iran’s attack on Israel “represents a real and present threat to international peace and security,” Israel should “show utmost restraint” in its response, President William Ruto of Kenya said in a statement posted on social platform X.

The warring parties “must exercise the utmost restraint and avoid any act that would escalate tensions in a particularly fragile region,” South Africa’s government said in a statement Sunday.

Nigeria’s Foreign Ministry urged Israel and Iran to “reflect on the universal commitment to peaceful resolution of conflicts.”

GAZA HEALTH MINISTRY REPORTS 68 DEAD IN LAST 24 HOURS

The Health Ministry in Gaza on Monday said the bodies of 68 people killed in Israel’s bombardment have been brought to hospitals in the past 24 hours. Another 94 were wounded, it said.

The fresh fatalities brought the death toll in the strip to 33,797 since the war began on Oct. 7, it said. The ministry doesn’t differentiate between civilians and combatants, but said two thirds of the dead are children and women.

Another 76,456 were wounded in the war, the ministry said.

The ministry said many casualties remain under the rubble and first responders have been unable to retrieve them amid the relentless bombing.

Israel launched its war on Hamas after the militant group’s complex attack on southern Israel on Oct. 7. Israeli authorities say 1,200 people, mostly civilians, were killed and roughly 250 people taken hostage in the attack. Israel says it has killed 12,000 militants in its offensive, without providing evidence.

ISRAELI MILITARY WARNS PALESTINIANS NOT TO RETURN TO NORTHERN GAZA

The Israeli military renewed warnings on Monday for Palestinians in Gaza not to return to the embattled territory’s north, a day after five people were killed trying to reach their homes in the war-torn area.

The military said Palestinians should stay in southern Gaza where they have been told to shelter because the north is a “dangerous combat zone,” Israeli military spokesman Avichay Adraee wrote on social platform X.

On Sunday, hundreds of Palestinians sheltering in central Gaza headed north in an attempt to return to their homes. Throngs of people were seen crowding a seaside road.

Hospital authorities in Gaza said five people were shot by Israeli forces while trying to head north. The Israeli military had no immediate comment and the precise circumstances behind the deaths were not immediately clear.

The returnees said they were prompted to make the journey north because they were fed up with the difficult conditions they are forced to live under while displaced.

Northern Gaza was an early target in Israel’s war against Hamas, which it launched in response to the militant group’s deadly Oct. 7 attack. The military is still operating in the north in a bid to stamp out militants that have regrouped.

Vast parts of northern Gaza have been flattened by Israel’s offensive and much of its population displaced.

BRITISH FOREIGN SECRETARY URGES ISRAEL TO AVOID STRIKING BACK AT IRAN

British Foreign Secretary David Cameron has urged Israel “to be smart as well as tough” and avoid striking back at Iran in response to its drone and missile barrage.

Cameron told the BBC that the U.K. does not support a retaliatory strike. The U.K.’s top diplomat said the attack had been a defeat for Iran and echoed President Joe Biden, who urged Israel to “take the win.”

Cameron said Britain’s message to Israel is: “Now is the time to be smart as well as tough, to think with head as well as heart.”

He said British fighter jets had played an “important part” in shooting down some of the more than 300 ballistic missiles, cruise missiles and drones fired at Israel from Iran, but did not provide details.

MACRON SAYS IRAN’S ATTACK ON ISRAEL WAS A ‘DISPROPORTIONATE RESPONSE’

French President Emmanuel Macron said Iran’s attack on Israel was a “disproportionate response” to the bombing of its consulate in the Syrian capital, Damascus. Firing a barrage of missiles and drones on Israel was an “unprecedented, very dangerous” act in the volatile Middle East, Macron said of Saturday’s attacks.

Speaking to French media BFMTV and RMC on Monday, Macron said that France had carried out “interceptions” of missiles that Iran aimed at Israel at the request of Jordan.

“We have condemned, we have intervened, we will do everything to avoid an escalation, an inferno,” Macron said.

He said France will try to “convince Israel that we must not respond by escalating.”

Instead of retaliating by attacking Tehran, France will work to “isolate Iran, increase sanctions and find a path to peace in the region,” Macron said.

GERMAN FM TELLS IRANIAN COUNTERPART NOT TO FURTHER ESCALATE TENSIONS

Germany’s foreign minister says she has made “unmistakably” clear to her Iranian counterpart that Tehran must not further escalate tensions in the Middle East.

Annalena Baerbock spoke by phone Sunday with Iranian Foreign Minister Hossein Amirabdollahian, following a previous conversation last week before Iran’s attack on Israel. She said she “warned him unmistakably against a further escalation.”

She said at a news conference in Paris on Monday that “Iran is isolated.” She added that “Israel won in a defensive way” thanks to its strong air defense and the intervention of the U.S., Britain and Arab countries.

Baerbock said that “it is now important to secure this defensive victory diplomatically” and prevent a regional confrontation.

Asked whether Israel has the right to strike back against Iran, Baerbock said that “the right to self-defense means fending off an attack; retaliation is not a category in international law.” She said she had made that point to Amirabdollahian last week.

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Middle East, world cannot ‘afford more war’: UN chief

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United Nations (UN) Secretary General Antonio Guterres warned the international community Sunday against deeper descent into conflict, addressing the Security Council during a meeting over Iran’s weekend attack on Israel.

“Neither the region nor the world can afford more war,” Guterres said.

“The Middle East is on the brink,” he told the Security Council.

“The people of the region are confronting a real danger of a devastating full-scale conflict. Now is the time to defuse and de-escalate,” he added, calling for “maximum restraint.”

Late on Saturday, Iran launched a direct attack on its long-time arch foe Israel for the first time, firing a wave of more than 300 missiles and drones.

Nearly all of them were intercepted by Israel and others, including the United States, Jordan and Britain.

According to the Israeli army, 12 people were injured.

Iran said its attack came in response to a deadly April 1 air strike on Tehran’s consulate building in the Syrian capital Damascus that was widely blamed on Israel.

That attack killed seven Iranian Revolutionary Guards, including two senior generals, and prompted Iranian threats of retaliation.

The unprecedented exchange, marking a major escalation between the two countries, has sparked renewed fears of a broader conflict, including the potential for an Israel counterstrike.

– ‘Step back from the brink’ –

The United States said Sunday it will not join any Israeli counterattack on Iran, with President Joe Biden warning Prime Minister Benjamin Netanyahu to “think carefully” about any escalation.

The rising tensions come against the backdrop of Israel’s six-month-old war against Hamas in Gaza, which began after the Palestinian Hamas group’s unprecedented attack in Israel October 7 which resulted in the deaths of 1,170 people, mostly civilians, according to an AFP tally based on Israeli figures.

Israel’s retaliatory offensive has killed at least 33,729 people in Gaza, mostly women and children, according to the territory’s Hamas-run health ministry.

Since the start of the conflict, Iran-backed groups in Iraq, Lebanon, Syria, and Yemen have carried out a flurry of attacks on Israeli and Western targets.

Sunday’s Security Council session on the simmering crisis came at Israel’s request, with its Ambassador Gilad Erdan urging the council to “take action (and) condemn Iran for their terror.”

The body must “impose all possible sanctions on Iran before it’s too late,” he said.

Iran’s UN envoy Amir Saeid Iravani meanwhile insisted the Islamic republic was exercising its “inherent right to self-defense.”

“The Security Council… failed in its duty to maintain international peace and security,” Iravani said.

Therefore, Tehran “had no choice” but to respond, he said, adding that his country does “not seek escalation or war,” but will respond to any “threat or aggression.”

During his speech, Guterres repeated his condemnation of Iran’s strikes on Israel, and the Israeli attack on the Iranian consulate in Damascus.

“It’s time to step back from the brink. It is vital to avoid any action that could lead to major military confrontations on multiple fronts in the Middle East,” Guterres said.

He also repeated his call for an “immediate humanitarian ceasefire” in Gaza, which experts warn is on the verge of famine.

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Bangladeshi Expats in China Celebrate Eid Reunion, Pahela Baishakh

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Representatives from China adorned the festive atmosphere with traditional Bangladeshi cultural elements, marking the celebration of Eid reunion and Bengali New Year. Despite the thousand-mile distance, the essence of Bangladeshi heritage and culture remained intact throughout the event.

The event, organized by the Bangladeshi community in Guangzhou, was held at Sun Yat-sen Park on Sunday (April 14).

The program included a vibrant array of activities, such as a New Year rally, children’s drawing competition, traditional indoor games for adults, poetry recitation, Bengali folk music performances, panel discussions, and a feast featuring a variety of traditional Bangladeshi dishes.

The event commenced with Quran recitation by Golam Kader Siddique and Abu Sayed Sayem. Speakers at the event included Dr. Miraj Ahmed, Humayun Kabir Dulal, Kallol Kanti Debnath, Mamun Sikdar, Sakhaowat Hossen, Atiqullah, Mahadi Amit, along with many others.

Over two hundred Bangladeshi and Chinese citizens attended the program, enriching the cultural exchange and fostering bonds between the two communities.

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