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Asian Tech Stocks and US Treasuries Face Shifts as Democrats Move Towards Congressional Control

• Saxo Bank analyst Charu Chanana said a decisive Democratic victory in the US midterms has raised concerns about tighter regulation of Big Tech, stronger AI oversight and reduced fiscal stimulus, putting additional pressure on Asian technology stocks, particularly in Taiwan and South Korea.
• She said weakness is spreading across the AI supply chain, but demand for advanced chips remains intact. This suggests a repricing of market expectations rather than a breakdown in the AI growth story.
• Chanana warned that further declines are possible and advised against indiscriminate buying during the dip. She recommended distinguishing companies funding AI infrastructure from suppliers of critical technologies, while allowing long term investors to selectively add exposure during weakness.
• US Treasury prices rose on Wednesday as investors anticipated tighter federal spending and political gridlock amid expectations of Democrats gaining control of Congress. Falling equities also increased demand for safe haven government bonds.
• Investors also assessed whether tighter AI regulation could slow economic growth and reduce the need for further Federal Reserve rate hikes.
• Markets were relieved that the possibility of Trump's previously discussed $5,000 payment to every US adult had diminished. The proposal would have cost approximately $1.2 trillion, equivalent to around 16% of the federal budget.
• Barrenjoey chief rates strategist Andrew Lilly said markets had previously assigned roughly a 5% probability to the payment plan, warning that its implementation would have triggered a catastrophic reaction in the Treasury market.
• House Democratic Leader Hakeem Jeffries is expected to become the next Speaker of the House. If elected, he would become the first African American Speaker in US history.

Democrats Projected to Win US House, Potentially Securing Largest Majority in Nearly Two Decades as Trump Blames Iran War for Republican Losses

• CBS News projects that Democrats have won control of the US House of Representatives, ending Republican control of both chambers of Congress. Democrats could secure their largest House majority in nearly 20 years.
• Regaining the House will allow Democrats to lead congressional committee investigations, increase oversight of the Trump administration and block parts of his legislative agenda.
• Speaking to The Wall Street Journal, President Donald Trump said the Iran war contributed to Republican losses but insisted he did not regret launching the conflict. He said he had tried for months to end the fighting and had complained to advisers that it had become a persistent problem.
• Trump blamed the biggest political damage on rising oil prices and higher US gasoline and diesel costs, rather than broader economic weakness or corruption allegations.
• He ruled out immediate personnel changes and defended Defence Secretary Pete Hegseth, who led the military operations, calling him “excellent”.
• In a Fox News interview, Trump warned that he would veto legislation he opposed, saying Democrats would submit “some crazy bills”. He suggested repeated vetoes could eventually bring Democrats back to the negotiating table, while adding that some Democrats had already contacted him.
• Trump also said it was too early to discuss potential candidates for the 2028 presidential election, but noted that there was a large pool of talent.
• Separately, Trump said he had discussed funding and support with Israeli Prime Minister Benjamin Netanyahu and that Netanyahu agreed with his position.

Trump Says Iran War Will End When He Decides, Signals Willingness to Work With Democrats

• US President Donald Trump congratulated Democrats on their midterm victories and said he was willing to work with them on several issues.
• Speaking to CBS, Trump said he hoped he would not need to use his veto power but warned that he would veto what he described as “crazy bills” if Democrats refused to cooperate. He said he had an “absolute veto”.
• On the Iran conflict, Trump said the war would end “when I say it will”. According to The Wall Street Journal, he also said he did not regret launching the war.
• Trump acknowledged that the Iran conflict may have contributed to Republican losses, saying voters might be unwilling to accept short term increases in gasoline prices. However, he argued that Americans recognised his administration's achievements in dealing with Iran.
• Trump said he did not expect to replace members of his Cabinet and rejected the suggestion that the electoral defeat was related to his administration's personnel.
• He added that he expected some Republican candidates to perform better and said he did not feel guilty about the election outcome.

Asian Currencies Rise as Democratic Gains Weigh on Dollar and US Equity Futures

• Asian currencies strengthened against the US dollar as Democratic gains in the US midterm elections increased the likelihood of the party controlling both chambers of Congress.
• Maybank analysts said tighter scrutiny of the AI sector under a Democratic-controlled Congress could weigh on the AI-led market rally and put further pressure on the dollar.
• They added that falling US Treasury yields reduce the dollar's appeal as a funding and investment currency for carry trades, creating additional downside pressure.
• USD/JPY fell 0.7% to 157.61, while USD/KRW declined 0.5% to 1,338.20.
• US Treasury yields moved lower during the Asian session. With equities also declining, the move may indicate increased demand for safe-haven assets.
• US equity futures pared some losses but remained lower. Nasdaq 100 futures fell 1.58%, S&P 500 futures declined 0.93%, and Dow Jones futures dropped 0.57%.
• Separately, a Fox News commentator joked that Trump may struggle to deliver his previously stated pledge of $5,000 payments to each US adult. Trump had linked the proposed payments to Republicans retaining control of both chambers of Congress.

Democrats Projected to Flip Texas, North Carolina and South Carolina Senate Seats as Trump Acknowledges Possible Losses

• President Donald Trump told The New York Times that Democrats are likely to win control of both the House and Senate in the 2026 midterm elections. He said he would accept the results and was willing to cooperate with Democrats.
• Trump said he did not regret endorsing Republican candidates, including Texas Attorney General Ken Paxton, who is trailing in the Senate race.
• Decision Desk HQ projects Democrat James Talarico to defeat Paxton in Texas, marking the first Democratic Senate victory in the state since 1988.
• US media have also projected Democratic victories in North Carolina and South Carolina Senate races. These gains would significantly improve Democrats' chances of regaining Senate control. They need a net gain of four seats to secure a majority.
• In his first public response to the midterm results, Trump told supporters to "pretend I'm on the ballot". He added that although he was not running, "If I were, we'd win by a landslide."

SBI Research Proposes Scrapping LTCG Tax on Equities, Raising STT by 50% to Offset Revenue Loss

• SBI Research, the research arm of State Bank of India, has proposed abolishing Long Term Capital Gains (LTCG) tax on equities and increasing Securities Transaction Tax (STT) by 50% to compensate for the revenue loss.
• The report estimates that scrapping LTCG tax would reduce government revenue by around ₹40,000 crore to ₹50,000 crore in FY28, equivalent to just 0.1% to 0.2% of GDP.
• SBI Research expects LTCG collections of approximately ₹1 lakh crore in FY26 and ₹40,000 crore to ₹50,000 crore in FY27, compared with around ₹1.29 lakh crore collected in FY25.
• To offset the potential revenue loss, the report estimates that a 50% increase in STT could generate an additional ₹45,000 crore in FY28. Under the proposal, STT on equity delivery transactions would increase to 0.15% from the current 0.10%.
• The report also suggests alternative options, including increasing the LTCG exemption limit to ₹2 lakh from ₹1.25 lakh, applying a 5% tax on holdings between two and three years, and removing LTCG tax on holdings beyond three years.
• Fiscal deficit warning: SBI Research projects India's FY27 fiscal deficit at 4.7% of GDP, against the Budget Estimate of 4.3%. It estimates the deficit at ₹18.2 lakh crore, around ₹1.2 lakh crore above the budget target.
• The projected slippage includes ₹1.1 lakh crore in revenue losses from excise duty cuts, ₹90,000 crore in additional fertiliser subsidies and around ₹48,000 crore in petroleum and LPG support.
• SBI Research said expenditure cuts may be necessary to keep the fiscal deficit within the budget target. It added that the government's large cash balance could help avoid additional borrowing.
• Finance Minister Nirmala Sitharaman recently said the government would consider reviewing LTCG tax, while SEBI has also backed scrapping the tax for foreign investors.

GIFT Nifty Moves to 23.5 Hour Trading, Extending Market Access Across Global Time Zones

• NSE International Exchange (NSE IX) in GIFT City began 23.5 hour trading on Monday and completed its first trading session under the extended timings, Moneycontrol reported.
• Trading now runs from 3:15 AM to 2:45 AM IST, covering Asian, European and US market hours.
• GIFT Nifty, the dollar denominated Nifty 50 futures contract, now begins regular trading at 5:15 AM, 1 hour and 15 minutes earlier than before.
• NSE IX MD and CEO V. Balasubramaniam described the move as a major milestone for the exchange.
• The extended trading window aims to improve global access to Indian equity derivatives and provide overseas investors with greater flexibility.

Democrats Projected to Win Control of US House as Republicans Face Midterm Setback

• Decision Desk HQ projected on Tuesday night that Democrats will regain control of the US House of Representatives, ending the Republican majority. The projection was called at 9:09 p.m. ET on November 3, while several races were still being counted and polling stations remained open in western states.
• Democrats recorded several House victories earlier in the evening, including North Carolina's 11th District and Pennsylvania's 8th District, both previously held by Republicans.
• In the Senate, Democrats held seats in Virginia and Georgia. Decision Desk HQ projected that Jon Ossoff won re-election in Georgia.
• In Florida, Democrat Jared Moskowitz secured re-election in a redrawn district that President Donald Trump had won by 9 percentage points. Democrat Pia Dandiya was also projected to win Florida's 22nd District.
• A White House official told Bloomberg that Trump's resolve to oppose the "Radical Left" would only grow stronger regardless of the election outcome.
• Another White House official argued that voters who backed Democrats could regret their decision if gasoline prices fall quickly following a resolution to the Iran conflict. Officials also said Trump had done more to promote several Republican candidates than the candidates themselves.
• The White House further pointed out that Trump was not on the ballot, arguing that his supporters are more likely to turn out when he personally contests an election.

Trump May Announce Fresh Tariffs After Midterms as Oil Prices Fall on Hopes of Iran War De-escalation

• Trump may increase tariffs: Goldman Sachs economists expect President Donald Trump to announce fresh tariff increases after the US midterm elections, potentially more than offsetting any tariff rollbacks by Democrats.
• Democrats face limits on tariff policy: Even if Democrats gain control of both chambers, they would remain short of the two-thirds majority required to override a presidential veto. Democrats could hold hearings and increase scrutiny of Trump's trade policy but may struggle to reverse tariffs.
• White House prepares countermeasures: The administration is reportedly preparing executive actions in case Democrats win, including possible new tariffs on critical minerals and wind turbines, Reuters reported.
• Trump's comments on Israel aid: Trump told Fox News that the US would stop providing $4 billion in annual military aid to Israel after this year, sending oil prices lower as markets assessed the implications for the Middle East conflict.
• Oil prices retreat: Brent crude fell to its lowest level in more than three weeks. Prices had previously risen following reports of US strikes on Iran's Qeshm Island, which officials described as defensive actions to protect shipping in the Strait of Hormuz.
• US-Iran diplomatic efforts: Qatar said mediation between Washington and Tehran had made progress. However, ING warned that it was too early to rule out renewed escalation in the region.

US Midterm Results Favour Democrats, Triggering Fall in Treasury Yields, Dollar and Global Stock Futures

• Democrats projected to regain House control: Election forecasting firm Decision Desk HQ (DDHQ) projected that Democrats would win control of the US House of Representatives, ending Republican control.
• Treasury yields decline: Following preliminary results favouring Democrats, the US 10 year Treasury yield fell from an earlier 4.97% to around 4.89%, its lowest level since early September.
• Dollar weakens, safe havens gain: The dollar fell to its lowest level since late September. The Swiss franc gained 0.8%, the euro rose 0.6% against the dollar and the Japanese yen advanced 0.5%, reflecting increased demand for currencies viewed as safe havens.
• US stock futures fall: US equity index futures came under selling pressure as investors assessed the potential implications of a Democratic victory for Washington's policy direction.
• South Korean stocks reverse gains: South Korean equities turned lower amid election uncertainty. SK Hynix's decline widened to 4.5%, while Samsung Electronics fell 3%.
• Rhode Island gubernatorial race: DDHQ projected Democratic candidate Helena Fox to win the Rhode Island governor's race. With around 50% of votes counted, she was leading independent candidate Ken Block by 56% to 28%.

Qatar Pushes US-Iran Mediation as IRGC Puts Military Forces on High Alert

• Qatar continues mediation efforts: Qatar's Foreign Ministry spokesperson Majed Al Ansari said Doha will continue working to bridge differences between the US and Iran. Both sides remain willing to continue negotiations and review mediation proposals, although no concrete breakthrough has been achieved.
• Three-hour talks in Tehran: A Qatari delegation travelled to Tehran on Monday and held discussions with Iranian officials for approximately three hours. Communication between the parties is continuing, with Qatar coordinating efforts alongside Pakistan, the Gulf Cooperation Council (GCC) and other regional partners.
• Strait of Hormuz warning: Qatar said freedom of navigation in the Strait of Hormuz and the Arabian Gulf is non-negotiable. It condemned the attack on the Qatari gas carrier Al Mayeda, warning that attacks on vessels and further military escalation could threaten regional security and undermine negotiations.
• Regional diplomatic outreach: Qatar's Emir discussed the regional crisis and Russia's potential role in resolving it with President Vladimir Putin during his visit to Moscow. Doha is also maintaining communication with senior Iranian officials.
• IRGC raises military readiness: Separately, Iran's Islamic Revolutionary Guard Corps (IRGC) said on November 3 that it is maintaining a high state of combat readiness and implementing the Supreme Leader's orders under a policy of "maximum deterrence".
• Military preparations: The IRGC said its priorities include updating databases of potential enemy targets, bringing enemy assets within its operational reach and preparing to respond swiftly to threats of any level. It accused the US of seeking to overthrow Iran's government and divide its territory.
• Warning to adversaries: The IRGC said Iran's armed forces and people would determine when and under what conditions the conflict with its adversaries ends.

Iran Denies Reaching Agreement With US, Says Nuclear and Diplomatic Talks Show No New Progress

• Iran has denied reaching any agreement with the United States, with a spokesperson for the Iranian delegation saying negotiations have made no fresh progress, according to Iranian state broadcaster IRIB.
• Iranian Foreign Ministry spokesperson Esmaeil Baghaei said both sides continue to exchange information through mediators, as they have previously, but no new breakthrough has been achieved.
• Baghaei said Iran remains at the highest level of defensive preparedness and is ready to respond forcefully to any act of aggression.
• He also expressed doubts about Washington's sincerity in pursuing diplomacy, citing Iran's past experiences with the United States.

Goldman Sachs Warns of 'Hidden Bear Market' as 60% of S&P 500 Stocks Enter Bear Market Territory

• The S&P 500 is trading just 3% below its latest record high, but approximately 60% of its constituent stocks are already down at least 20% from their respective peaks, according to Goldman Sachs.
• Goldman Sachs trader Bobby Molavi described the divergence as a "hidden bear market", highlighting the unusual weakness beneath the index's strong headline performance.
• Molavi pointed out that both major technology companies investing heavily in AI and companies receiving that investment are facing simultaneous stock declines.
• He questioned why both sides of the AI investment cycle are being punished by investors despite expectations that artificial intelligence could transform the economy.
• Concerns over the sustainability of massive AI spending have triggered a broad market rotation, with technology stocks facing significant pressure in recent weeks.
• Meanwhile, many other S&P 500 constituents have gained over the past month as investors move away from crowded technology trades towards defensive sectors and previously under-owned areas.

Meta Launches $20 Billion Bond Sale as AI Spending Plans Raise Debt and Credit Concerns

• Meta began marketing a five tranche dollar bond offering on Tuesday as part of plans to raise at least $20 billion across US and European markets, according to Bloomberg. It is the company's first dollar bond sale in six months.
• The fundraising follows equity offerings totalling approximately $97.5 billion. On October 27, Meta increased its common stock offering to $25 billion and added $12.5 billion in mandatory convertible preferred shares. It also plans an at the market share sale programme of up to $60 billion, expected to begin after its non-voting Class C shares start trading in early 2027.
• Meta has guided for capital expenditure of $135 billion to $145 billion in 2026 as it accelerates investment in AI infrastructure.
• The company raised $30 billion through bonds last year and issued $25 billion of investment grade bonds in April. Demand for the April offering reached $96 billion at one point. Alphabet also sold €6 billion in bonds on Monday.
• On October 30, S&P Global Ratings affirmed Meta's AA- credit rating but changed its outlook from stable to negative, warning that rising spending could push leverage above 1.0x and keep free operating cash flow negative for longer.
• S&P warned that returns from AI investments could be delayed or fail to materialise. It expects Meta's capital expenditure to reach $140 billion in 2026 and exceed $225 billion in 2027, with free operating cash flow deficits of $22 billion and $71 billion, respectively.

Indian Seafarer Killed After Indian-Flagged Vessel Attacked Near Oman, 13 Crew Rescued

• Gujarat seafarer Gandhar Nahim Ajij died after the Indian-flagged dhow MSV Al Jusufi was struck near Limah, off Oman's coast.
• Oman's Coast Guard rescued the remaining 13 Indian crew members, Union Shipping Minister Sarbananda Sonowal said.
• The attacker and the weapon used in the incident remain unidentified, according to NDTV.
• The Ministry of External Affairs condemned the attack and called for immediate de-escalation and a diplomatic solution, ANI reported.
• The incident comes amid growing maritime security risks linked to US-Iran hostilities. The UK Maritime Trade Operations (UKMTO) had also reported a projectile strike near Limah on November 1.

$147 Million Leveraged Oil Bet Raises Stakes as Iran War Escalation Fears Support Crude Prices

• An anonymous trader opened approximately $147 million in 10x leveraged long positions in Brent and WTI crude on Hyperliquid on November 2, according to TheStreet.
• The positions were reportedly opened ahead of Tuesday's US midterm elections, indicating a significant bet on higher oil prices amid expectations of a possible escalation in the Iran war.
• Oil prices rose on Tuesday following reports of US strikes on Iran's Qeshm Island, reversing Monday's sharp decline driven by hopes of diplomatic progress.
• Goldman Sachs warned that Brent crude could reach $140 per barrel in 2027 if oil production across the Gulf remains depressed, according to The Economic Times.

FPI Ownership in Indian Equities Falls to Lowest Level Since 2011 as Domestic Investors Take Control

• Foreign Portfolio Investors (FPIs) held just 14.02% of 5,638 BSE listed companies at the end of September, the lowest level since December 2011, according to a Mint analysis.
• Foreign ownership declined by nearly 0.4 percentage points during the September quarter and by 154 basis points over the past year, despite FPIs turning net buyers with investments of ₹13,970 crore during the quarter. They had withdrawn ₹1.43 lakh crore in the June quarter.
• Domestic Institutional Investors (DIIs) invested a net ₹1.7 lakh crore in equities during the September quarter, taking their ownership in Nifty 500 companies to a record 21.3%, compared with 16.8% for FPIs, according to Motilal Oswal.
• Domestic mutual funds' ownership also reached a record 11.59%, narrowing the gap with foreign investors to 2.43 percentage points from 4.77 percentage points a year earlier.
• Foreign stakes are at multi year lows in nearly 70% of India's top 100 companies. Reliance Industries is at a 15 year low, while TCS, HCL Technologies and Maruti Suzuki have seen foreign ownership fall to levels not recorded in more than two decades.
• FPI ownership in Infosys dropped to 25.1%, its lowest since March 2001. At Axis Bank, foreign holdings declined to 38.1% from 49.4% since September 2024.

US Midterm Elections Underway as Security Fears Rise and Investors Watch Treasury Yields and Dollar

• Election security concerns: Voting is underway in the US midterm elections on November 3, with concerns growing over possible unrest if Republicans suffer major losses. Pollsters and election monitors fear President Donald Trump could allege fraud and encourage supporters to take to the streets, raising concerns about a repeat of the January 6 Capitol riot.
• Security measures tightened: Some polling stations in battleground areas have installed bulletproof glass and other security measures. Local election officials are preparing for potential threats, while some have reportedly begun carrying handguns. Election watchdogs also report resignations among election staff due to safety concerns.
• Key political stakes: All 435 House seats, 35 Senate seats and 36 governorships are being contested. The results will determine whether Republicans retain control of Congress or Democrats regain control of one or both chambers. More than 57 million people had already voted early, according to Reuters.
• Markets in focus: State Street Investment Management advised Asian investors to focus on movements in US Treasury yields, the dollar and corporate credit spreads rather than treating election results as direct buy or sell signals. The key questions are whether US policy changes affect export demand, technology investment and global borrowing costs.
• Interest rate outlook: A clearer policy outlook after the election could improve market sentiment, but does not automatically mean interest rates will fall. Investors should also consider persistent inflation and fiscal risks, with the Federal Reserve continuing to describe inflation as elevated.

AdaniConneX in Talks for $1.5 Billion Offshore Loan From DBS, MUFG and FAB

• AdaniConneX is in discussions with DBS, Mitsubishi UFJ Financial Group (MUFG) and First Abu Dhabi Bank for an offshore loan of around $1.5 billion, Bloomberg reported.
• The proposed facility follows an $800 million, 18 month loan secured in August, reportedly a day after a US judge dismissed charges against Gautam Adani.
• Pricing and the loan tenor, expected to be between five and seven years, are still under negotiation.
• The fundraising comes as the Adani Group and Reliance Industries step up investments in data centres and AI computing infrastructure.

US Midterm Uncertainty, AI Investment Concerns and Rising Oil Prices Weigh on Markets as Bond Yields Climb

• Eurozone bond yields rise: Eurozone government bond yields climbed, tracking higher US Treasury yields and a modest recovery in oil prices. Germany’s 10 year yield rose 2.1 basis points to 3.316%, while Belgium’s 10 year yield gained 3.2 basis points to 4.428% after budget negotiations collapsed. Markets are watching the US midterm elections, with the possibility of Democrats winning both chambers gaining attention. Analysts said Democratic control could support US Treasuries, although the market reaction to President Trump remains uncertain.
• Dollar weakens on AI concerns: The US dollar softened as investors questioned the sustainability of AI investments and assessed midterm election uncertainty. Apple warned that AI related operating costs could squeeze margins, while Anthropic reported an operating loss in Q3 following a costly data centre deal. OpenAI's latest funding round also reportedly raised less than half of its initial $30 billion target. The dollar index fell 0.12% to 101.684, after touching a one month low of 101.426.
• Oil and geopolitical risks remain in focus: Higher oil prices following the reported US strike on Iran's Qeshm Island provided some support to the dollar. Investors are assessing how the midterm outcome could influence US policy in the Middle East, the duration of supply disruptions and the geopolitical risk premium in crude. A Democratic gain in Congress could increase scrutiny of military policy and pressure for diplomatic solutions. However, greater pressure for negotiations does not automatically mean geopolitical risks or oil prices will decline.

White House Lists India Among Countries With Improved Trade Deals Despite Unsigned US Trade Pact

• The White House has included India in a 127 item document titled “Promises Made, Promises Kept, Results Delivered”, released on November 2, claiming President Donald Trump secured new and improved trade agreements with several countries.
• India is listed alongside the UK, European Union, Japan, China, South Korea and Southeast Asian nations. The document credits Trump's tariff policy with securing agreements covering more than half of global GDP.
• However, the interim trade pact announced by India and the US in February remains unsigned. The joint statement outlined a framework rather than a final agreement.
• A US Supreme Court ruling against reciprocal tariffs subsequently forced both sides to revisit the terms.
• Commerce Minister Piyush Goyal said most negotiations have concluded and the first tranche is undergoing final legal drafting. Commerce Secretary Rajesh Agrawal, however, said no signing date has been set.

Iran Says It Is at Highest Level of Military Defensive Readiness, Warns US Against Further Escalation

• Iranian Parliament Speaker Mohammad Bagher Ghalibaf said Iran is fully prepared for war, with its “finger on the trigger”, and will respond to US actions with authority and rationality.
• He said Iran is at the highest level of defensive readiness across both battlefield and military operations, adding that the responsibility to prevent war now rests with Washington.
• Ghalibaf warned that any further US strategic mistake would trigger a completely new battlefield, leaving the US with even fewer options to find a way out.
• He said Iran's Supreme Leader has approved military strategies to counter possible attacks and that Tehran would respond unpredictably to any miscalculation by the US or Israel.

Iran Says It Remains Far From US Deal as Oil Prices Rise Over 2%

• A senior Iranian official said Tehran and Washington remain far from reaching an agreement to end the war. Iran is prepared to respond forcefully to any US strikes in the region and beyond.
• The official said mediators are working to narrow differences, adding that Tehran will not accept excessive US demands.
• Iranian Parliament Speaker Mohammad Bagher Ghalibaf said Tehran had delivered Washington a “strong and rational response” and that “the ball is now in the US’s court.”
• Qatari mediators held further talks with Iranian officials in Tehran on Monday. A diplomat said both sides are reviewing the mediators’ latest proposal.
• Oil prices rose more than 2% intraday, with WTI and Brent gaining. US stock futures turned lower, with S&P 500 and Nasdaq futures down 0.3%. Spot silver fell below $50 an ounce, declining more than 3%.

• The International Energy Agency (IEA) warned that the Iran war is disrupting global gas supplies and intensifying competition among buyers, creating severe tightness in the LNG market.
• The IEA now expects global LNG supply to decline by a record 3% this year, equivalent to around 20 billion cubic metres (bcm).
• Disruptions to shipping through the Strait of Hormuz and Iranian strikes on regional energy infrastructure have sharply reduced exports from Qatar and the UAE. Around 20% of global LNG shipments previously passed through the strait.
• The IEA expects shipping flows through Hormuz to remain severely disrupted at least until the end of the year.
• Higher production from North America and Africa, along with increased output from existing facilities in Africa, Asia and Russia, lifted non Gulf LNG production by 14% between March and October. This offset roughly two thirds of the Gulf supply losses.
• Despite this additional production, global LNG output is estimated to have fallen around 6% during the conflict.
• Europe's gas storage entering the 2026 to 2027 heating season is at its lowest level since 2013, increasing its dependence on global LNG supplies. The need to replenish depleted reserves this summer could intensify competition for LNG and extend supply tightness into next year.
• Meanwhile, global natural gas demand is forecast to decline by around 1.5%, or 65 bcm, this year, driven by weaker demand in the Middle East, lower industrial consumption in Europe and a shift from gas to coal for power generation in several Asian countries.

• Informal gold imports into India surged more than 15 times year on year to around 50 tonnes in Q3 2026, compared with just 3 tonnes a year earlier, according to the World Gold Council (WGC), citing Metals Focus data.
• The surge followed India's decision to more than double gold import duty to 15%, increasing incentives to bring gold into the country through unofficial channels such as smuggling and individuals carrying small quantities.
• The WGC said the report does not detail how informal trade flows were tracked. The higher import duty was introduced to curb gold demand and narrow the trade deficit, which had widened amid rising energy prices.
• Meanwhile, the WGC expects India's gold demand in 2026 to fall to around 650 tonnes, its lowest level since 2020, as elevated prices weigh on jewellery purchases and investment.
• India's Q3 gold demand declined 29% year on year to 162.5 tonnes. Jewellery demand fell 20%, while investment demand dropped 40%. Diwali and wedding season purchases could support a recovery in Q4.
• Globally, central banks purchased 321 tonnes of gold in Q3, the fastest quarterly pace since the end of 2024. Year to date purchases reached 675 tonnes, slightly above the same period last year.
• China and Poland were the largest reported buyers in Q3, adding 63 tonnes and 41 tonnes respectively, while Russia was the only major seller, reducing its holdings by 19 tonnes.
• The WGC said central bank demand remains an important support for gold prices. Some additional buying may also have been encouraged by recent price weakness.

• Sunil Tirumalai, EM Strategist at UBS Global Research, expects MSCI India companies to deliver 10% to 12% earnings CAGR in dollar terms over 2027 and 2028.
• Nifty 50 earnings growth is expected to be broadly similar, potentially a couple of percentage points higher due to differences in index composition.
• Tirumalai said Indian equities have undergone a significant relative valuation correction. India's valuation premium over emerging markets has fallen from around 110% in September 2024 to 65% currently.
• However, Indian equities continue to trade at a premium to emerging market peers. The current premium is nearly double the 30% to 40% level seen before the COVID 19 pandemic.
• He attributed part of the narrowing premium to improving earnings prospects in other emerging markets, particularly South Korea and Taiwan, where earnings upgrades have gained momentum.
• Banking is among UBS's preferred sectors, with valuations significantly below historical levels. Tirumalai sees potential value in banking stocks as corporate and management related uncertainties settle and investors refocus on fundamentals.
• He also sees opportunities in companies supplying the power and data centre ecosystems, supported by power shortages and rising infrastructure demand.
• On a possible reduction in long term capital gains tax, he said it could improve foreign investor sentiment in the near term, but would not be enough on its own to drive sustained FPI inflows.
• Foreign investors will continue to assess earnings growth, underlying fundamentals and India's relative market performance against other emerging economies.

• Oil prices rose in early Asian trading on Tuesday after The Wall Street Journal reported a US strike on Iran's Qeshm Island.
• The rebound recovered part of Monday's sharp sell-off, when hopes of diplomatic progress between Washington and Tehran raised expectations of an end to the eight-month Iran war.
• Iran's talks with Qatari mediators and signals from Tehran regarding its authority to negotiate had helped ease concerns over prolonged supply disruptions.
• Goldman Sachs raised its December Brent crude forecast to $105 per barrel from $90, citing increased geopolitical risks to global oil supplies.

US Carries Out Limited Strike on Iran's Qeshm Island, Calls Operation Defensive Amid Ongoing Diplomatic Efforts bigbreakingwire.in