Russian troops have advanced again in Ukraine after a week’s delay. The humanitarian disaster in the country is worsening, with the number of refugees now estimated at more than 2.4 million. Oil prices rose as talks to lift sanctions on Iran are on hold, dampening hopes of a rapid increase in Iranian oil supplies to the market. Rivian stumbled after revising its production plan for this year. Shares of Chinese technology companies are experiencing their worst week in a year due to revived fears of their forced delisting from U.S. stock exchanges, and the company behind a major nickel short sale said it wants to keep the position open. Here’s what you need to know about the financial market on Friday, March 12.
1. A summit meeting is “possible” and meanwhile, the Russian special operation is gaining momentum again
The Kremlin said a meeting between President Vladimir Putin and Ukrainian President Volodymyr Zelensky was possible, raising hopes for a diplomatic resolution to the hostilities, which are now in their third week. That hope collapsed Thursday after a meeting between the two countries’ foreign ministers broke off with no apparent progress.
EU leaders called for a complete withdrawal of Russian troops from Ukraine, setting the bar high for any reminder of an end to economic pressure on Russia. They also pledged another 500 million euros ($555 million) in military aid to Ukraine.
The UNHCR estimates that some 2.4 million refugees have now left Ukraine, the largest such displacement in Europe since World War II.
2. Oil prices jumped due to the suspension of negotiations with Iran
Oil prices rose as talks to lift sanctions on Iran were put on hold. The move came as Western powers, especially Washington, worried that concessions offered to Iran on its nuclear program were too high a price to pay for increasing Iran’s oil supply to the world market.
The Biden administration also probed Venezuela this week to see how it would increase its supplies. Of greater concern is the unwillingness or inability of U.S. shale companies to increase production despite record high oil prices. Rig count data from Baker Hughes, which measures U.S. drilling activity, is due a little later.
By 06:30 a.m. ET (11:30 GMT), WTI crude futures were up 2.0% to $108.43 a barrel, while Brent crude futures rose 2.3% to $111.84 a barrel.
3- U.S. market to open higher; Rivian in focus
U.S. stock indexes are set to open higher on Friday, paralleling gains made in Europe on renewed hopes of diplomatic progress in resolving the conflict.
By 06:15 a.m. ET (11:15 a.m. GMT), the Dow Jones futures were up 387 points, or 1.2%, while the S&P 500 futures were up 1.4% and the Nasdaq 100 futures were up 1.6%.
A stock that will likely be in the spotlight a little later is electric car maker Rivian, which announced a larger fourth-quarter loss and was forced to cut its production guidance for the year Thursday night. Shares of Oracle (NYSE:ORCL) are also down in the premarket after its third-quarter earnings missed forecasts due to higher operating expenses and weak stock investment performance.
Also in focus will be Meta Platforms after news that it has authorized calls for violence against Russian officials and military forces on social media platforms in violation of its normal policies.
4. Selling of Chinese Big Tech stocks intensified after SEC warning
Shares of Chinese technology companies are experiencing their worst week in a year after the U.S. Securities and Exchange Commission (SEC) on Thursday revived fears it may be forced to delist them from the country’s stock indexes.
The SEC said ACM Research, fast-food giant Yum China, BeiGene, Zai Lab and HutchMed risk being delisted from stock exchanges in early 2024 if they fail to submit proper audit documents supporting their financial statements.
The Nasdaq Golden Dragon China Index, which tracks Chinese stocks, fell 10% on Thursday; with individual companies such as Nio, Alibaba and Pinduoduo losing between 8% and 20%. The index is now down about 68% from its high in February last year.
Meanwhile, in China, the number of officially reported new COVID-19 infections exceeded 1,000 for the first time in 2 years. Chinese Premier Li Keqiang also reiterated his concern over Western sanctions on Russia, which are likely to cause a sharp slowdown in the country’s economy.
5. A major nickel short seller wants to keep his position open
The London Metal Exchange (LME) said nickel trading will be suspended for the rest of the week as it struggles to cope with the backlash to protect its members.
Tsangshin, the Chinese company whose large short position was the main cause of the price spike that forced the LME to suspend trading, said it wants to leave the position open, which may not be a bad thing given the lack of agreement on what price it can be closed at.
Prices of other base metals continued to rise on Friday amid continued uncertainty over supply from Russia. The head of mining giant Norilsk Nickel, Vladimir Potanin, warned that Russia’s current policies will take it back to 1917, the year of the Bolshevik Revolution.