Asian Shares Struggle for Direction as Tech Weakness Meets Geopolitical Risks

GLOBAL MOOD: Cautiously Risk-on
Drivers: Fed Rate Cut, Tariffs Impact, Geopolitical Tensions

Investors are cautiously risk-on, reflecting optimism from Fed rate cuts and strong tech and housing data, but sentiment is tempered by geopolitical tensions and mixed signals from the US labour market and global trade uncertainties.

TODAY’S WATCHLIST
 - Fed Williams Speech
 - US weekly Jobless Claim

THE BIG STORY
US President Donald Trump is scheduled to meet Pakistani Prime Minister Shehbaz Sharif at the White House today, following the recent trade deal between the two countries, a Trump administration official told Reuters. The meeting signals a warming of US-Pakistan relations under Trump, even as Washington has traditionally leaned on India as a counterweight to China in Asia. The bilateral discussions are expected to cover trade, security, and regional cooperation, highlighting the US’s strategic interest in South Asia amid global geopolitical shifts.

Meanwhile, tensions over trade with Russia continue to draw global attention. China rejected Trump’s criticism that India and China are the “primary funders” of the Ukraine war through Russian oil purchases, noting that the US and European Union are also trading with Moscow. Chinese Foreign Ministry spokesperson Guo Jiakun warned that Beijing would safeguard its interests if normal trade with Russia is obstructed. In parallel, Iranian President Masoud Pezeshkian blamed the US and Israel for undermining peace talks, while Iran’s rial hit a record low, reflecting growing economic and geopolitical strains.

Data Spotlight 
Sales of new US single-family homes surged to the highest level in over three-and-a-half years in August, rising 20.5% to a seasonally adjusted annualized rate of 800,000 units, the Commerce Department reported. July’s pace was also revised upward to 664,000 units from 652,000, and year-on-year sales jumped 15.4%, largely driven by a 72.2% increase in the Northeast, which represents a smaller portion of new housing construction. Analysts highlighted that weakening labour market conditions could limit the broader impact of falling mortgage rates on the housing sector.

Takeaway: Despite the headline surge in new home sales, volatility and regional concentration suggest the housing market’s strength may be overstated, and a weakening labour market could dampen sustained growth in the sector.

WHAT HAPPENED OVERNIGHT

• US Stocks slip as investors book profits ahead of inflation data
  • US stocks fell for a second straight session with indexes near record highs.
  • Investors digested Federal Reserve Chair Jerome Powell’s comments on potentially stretched valuations.
  • Freeport-McMoRan plunged 17% after declaring force majeure at its Grasberg mine in Indonesia.
  • General Motors rose 2.3% after UBS upgraded the stock to “buy” and discussed a $2.26B government loan for Thacker Pass lithium project.

• US Treasury yields edge higher as markets digest Powell’s comments 
  • Yield on the 10-year US Treasury note rose 2.9 basis points to 4.147%, while the 30-year bond yield climbed to 4.7517%.
  • Investors are assessing Fed Chair Powell’s remarks on labor market and inflation risks with limited guidance on future rate cuts.
  • Treasury supply weighs on the market, with $70 billion in 5-year notes auctioned Wednesday and $44B in 7-year notes scheduled for Thursday.

• US Dollar index Strengthens on Powell’s Cautious Tone 
  • The US dollar index rose 0.66% to 97.87, approaching a three-week high.
  • Greenback gained against the yen, Swiss franc, and euro.
  • Powell highlighted two-sided risks: inflation pressures from tariffs and employment risks from slower job growth.
  • Fed Chair offered no guidance on an October rate cut but stressed policy decisions are data-driven, not political.

 

• Crude oil prices surge to seven-week high on supply concerns
  • Crude oil prices climbed around 3% to seven-week highs amid tightening supply concerns.
  • US West Texas Intermediate crude gained 2.5%, to $64.99 a barrel.
  • Market sentiment was boosted by a surprise drop in US weekly crude inventories and export issues in Iraq, Venezuela, and Russia.

Day’s Ledger

Economic Data

• Euro M3 money supply
• US weekly Jobless Claim

Corporate Actions

• Afcons Infrastructure to consider fund raising
• Fredun Pharmaceuticals to consider fund raising
• Gayatri Projects Ltd, to consider fund raising
• Healthy Life to consider rights issue
• Panache Digilife to consider fund raising
• Trustedge Capital to consider rights issue
  

Policy Events

• BoJ Monetary Policy Meeting Minutes
• Fed Goolsbee Speech
• Fed Bowman Speech
• Fed Barr Speech
• Fed Daly Speech
• Fed Williams Speech

TICKERS TO WATCH

• APOLLO HOSPITALS gets CCI approval for demerger of pharmacy and digital health businesses
  
• GLENMARK unit signs pact with Hengrui Pharma for trastuzumab rezetecan
  
• Income Tax Department issues ₹2.5 billion refund to NEW INDIA ASSURANCE
  
• LUPIN gets tentative US FDA approval for generic Biktarvy tablets
  
• NTPC GREEN subsidiary begins partial commercial operations at Gujarat wind power project
  
• ONGC leases Pipavav port and storage facilities for 5 years
  
• POWER GRID acquires SPV Davanagere Power Transmission for ₹65.3 million
  
• TATA STEEL infuses $460 million into wholly owned subsidiary T Steel Holdings
  
• WAAREE ENERGIES invests ₹3 billion in Waaree Energy Storage via rights issue

 MUST READ

• Cabinet clears ₹697.25 billion package to boost shipbuilding, maritime sector
• No major rise in insurance sales despite zero GST, say distributors
• India fuel exports surge to multi-year highs on higher refinery runs
• Cabinet clears plan to add 5,023 MBBS, 5,000 PG medical seats across India
• Indian pharma sector revenue growth to ease to 7-9% in FY26: Crisil
• Festivals, GST cuts to drive credit card spends after 13.7% August rise
• Kremlin says Trump claims on war in Ukraine mistaken, offers 'real info'
• Canada Factory Sales Estimated to Have Fallen 1.5% in August
• Australian Inflation Accelerates to Highest Level in a Year
• EU Parliament Chief Expects Lawmakers to Approve US Trade Deal
  

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See you tomorrow with another edition of The Morning Edge.

Have a great trading day.

India is rightly proud of its engineering talent.

Teams in Bengaluru and Noida are designing 3-nanometre and even 2-nanometre chips—at the very frontier of global technology. But here’s the catch: the intellectual property belongs to foreign firms like Renesas and ARM.

So, while Indians design, others own.

Why does ownership matter? 

TK Arun writes, Not Just Make in India, Chips Need to be Made by India