SCO Summit Strengthens Sino-Russian Ties Amid US Tariff Threats

GLOBAL MOOD: Risk-off
Drivers: SCO consensus, BRICS unity, US tariff threats, US mixed data

Asian markets starts the week on a cautious note after a US court ruled Donald Trump’s trade tariffs illegal. On August 29, the Federal Circuit Court voted 7–4 saying Trump went beyond his powers under emergency law. The decision backs a May ruling that first struck down the tariffs. But here’s the catch: those duties, which also hit imports from India, are still in place until October 14. That window gives the Trump team a shot at taking the case to the Supreme Court, leaving investors hanging on what happens next.

THE BIG STORY
The Shanghai Cooperation Organisation is taking on "greater responsibility" for regional peace, stability, and the development of its member states, Chinese President Xi Jinping said on Sunday evening while hosting about 20 world leaders. Speaking at a welcome banquet during the two-day summit in Tianjin, Xi highlighted the SCO’s mission to build consensus among members and boost cooperation momentum, according to Chinese state news agency Xinhua.

Russian President Vladimir Putin, attending the summit, underscored that Russia and China share a “common stand against discriminatory sanctions” that impede socioeconomic development of BRICS countries and the global community. He noted both nations are focusing on mobilising resources for critical infrastructure projects and enhancing BRICS’ capacity to tackle urgent global challenges. Putin’s comments come amid US President Donald Trump’s threat of 10% tariffs on BRICS member countries, highlighting rising tensions between the group and the US.

Data Spotlight
US consumer spending rose 0.5% in July, marking the largest increase in four months, supported by higher purchases of motor vehicles, recreational goods, clothing, and durable household items. Spending on services also increased 0.4%, driven by financial services, healthcare, and housing, although restaurant and hotel outlays declined.

On the inflation front, the Personal Consumption Expenditures Price Index edged up 0.2% for the month, with goods prices down 0.1% due to lower energy and recreational goods costs, while services inflation remained steady. Year-on-year, the PCE Index rose 2.6%, unchanged from June. The data highlights robust domestic demand, yet economists caution that strong spending is unlikely to prevent the Federal Reserve from cutting interest rates next month amid signs of a softening labour market.

Takeaway: US Strong consumer spending sustains economic momentum, but inflation trends and labour market weakness keep Fed rate cuts on the table.

WHAT HAPPENED OVERNIGHT

• US Stocks slip amid persistent inflation, tech shares drag
  
  • Nasdaq dropped 1.2%, pressured by tech and AI shares.
    
  • Inflation data indicated tariffs are starting to feed into prices, adding pressure on market sentiment.
    
  • Dell tumbled nearly 9%, hit by higher manufacturing costs for AI servers and rising competition.
    
  • Nvidia fell 3.4% after its quarterly report fell short of expectations.

• US Treasury yields edge higher on strong spending data and trade optimism
  
  • US Treasury yields edged higher ahead of the long weekend and month-end repositioning.
    
  • Gains supported by resilient US economic data showing personal income and spending rose in July.
    
  • Investor sentiment was boosted after President Trump softened tariff threats, reflecting stability in trade concerns.

• US dollar slides amid expectations of Fed rate cut
  
  • US dollar Index declined 2% in August against a basket of major currencies.
    
  • Dollar weakened against the euro and Swiss franc on Friday.
    
  • Initially gained after US inflation matched expectations but later gave up gains.
    
  • Market positioning reflects expectations of a US interest rate cut by the Federal Reserve next month.

• Crude oil prices slip on weaker US demand, rising supply expectations
  
  • Brent crude prices fell on Friday amid concerns over weaker US demand.
    
  • Supply expected to rise this autumn from OPEC and allied producers.
    
  • Brent crude October contract settled down at $68.12 per barrel.

DAY’S LEDGER

Economic Data

• Japan Apr-Jun Capital Spending 
  
• China August Caixin Manufacturing PMI
  
• India August S&P Global Manufacturing PMI 
  
• Germany August Manufacturing PMI 
  
• Eurozone August Manufacturing PMI 
  
• Eurozone July Unemployment Rate 

Corporate Actions

• Highway Infrastructure to consider financial results
  
• Parsvnath Developers to consider financial results
  
• Unicommerce Esolutions to consider fund raising
  
• Websol Energy System to consider stock split

TICKERS TO WATCH

• Adani Power bags LoA for 800 MW thermal project in Anuppur, MP on DBFOO model.
  
• Asian Energy Services completes acquisition of UAE’s Kuiper Holdings, Cayman’s Kuiper Group.
  
• Aurobindo Pharma gets US FDA Form 483 with 5 observations at Telangana API unit.
  
• Bank of India cuts MCLR by 5–15 bps across tenors from Sep 1.
  
• BEML bags Indian Railways order worth over ₹0.8 bn for utility track vehicles.
  
• BHEL signs ToT agreement with DRDO’s DMRL for advanced metallurgical technology.
  
• Dharan Infra-EPC wins ₹11.7 billion work order from Skymax Infra Power.
  
• EPACK Durable faces tax search at Dehradun plant; no allegations found.
  
• GHCL chairman Anurag Dalmia barred by SEBI for 18 months in Golden Tobacco case.
  
• Gujarat Industries Power gets nod for 700–750 MW lignite-based power plant at Valia.
  
• HEG inks graphene tech collaboration pact with Sri Lanka’s CGT.
  
• Nazara Tech terminates deal to acquire 0.98% stake in Moonshine Technology.
  
• NCC secures water division orders worth ₹7.9 billion in August.
  
• Neogen Chemicals forms JV with Morita to enter lithium-ion battery materials biz.
  
• Paytm CFO Madhur Deora steps down; shareholders opt not to fill vacancy.
  
• PG Electroplast signs MoU with Maharashtra Govt for ₹10 billion greenfield appliances project.
  
• PNB Housing to mull fundraise of up to ₹50 billion via NCDs on Sep 5.
  
• Popular Vehicles gets nod from Maruti Suzuki to acquire dealership in Telangana.
  
• Torrent Power to invest ₹220 billion in 1,600 MW supercritical power plant in MP for MP Power Mgmt.
  
• Virtuoso Optoelectronics to invest ₹8 bn in Nashik electronics & motor components unit.
  
• Welspun Specialty gets GPCB clearance to resume operations at Bharuch plant.
  
• Zydus Wellness to acquire full stake in UK’s Comfort Click via subsidiary Alidac UK.

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• Throne of Thrones — A Love Letter to Japanese Toilets
  
• Prosperous Farms, not Farmhouses, Will Keep Children Happy
  
• Mumbai’s Addiction to Apathy
  
• Indian Banks’ Capital Comfort to Face Twin Challenges
  
• Xi Made Four Suggestions to Deepen India Ties, Misri Says
  
• India likely to receive above-average monsoon rainfall in September
  
  

See you tomorrow with another edition of The Morning Edge.

Have a great trading day.

India’s Russian oil imports aren’t about cheap barrels, they’re about strategic autonomy. Stopping now could weaken India’s leverage between the US, China, and Russia.

TK Arun writes, Why India Should Continue to Buy Oil from Russia