The Morning Edge: West Asia Tensions Ease as Iran Seeks Ceasefire; US-UK Seal Partial Trade Deal

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Global Sentiment: Risk-on 
Factors: Iran Seeks Ceasefire

TODAY’S WATCHLIST
 -Bank of Japan interest rate decision
 -US May retail sales data 

THE BIG STORY
West Asia tensions showed signs of de-escalation on Monday as Iran asked Qatar, Saudi Arabia, and Oman to urge US President Donald Trump to push Israel toward an immediate ceasefire. In exchange, Tehran has signalled readiness to show flexibility in nuclear negotiations. Regional leaders engaged in urgent backchannel diplomacy throughout the weekend, working to contain the most intense confrontation yet between Iran and Israel. The shift in tone suggests a potential diplomatic opening, even as both sides remain on alert.

Meanwhile, in a separate development, President Trump signed a partial trade agreement with British Prime Minister Keir Starmer during the G7 Summit in Canada. The deal reduces tariffs on UK automobiles and removes duties on aerospace products, though key issues like steel and aluminium remain unresolved. The move reflects continued US engagement on global trade, even as foreign policy challenges persist.

DATA
China's new home prices slipped 0.2% month-on-month in May, marking another setback for the property sector despite ongoing policy support. Official data indicated a year-on-year increase of 5.8% in factory output, marking its slowest growth rate in six months and falling short of April's 6.1%. Meanwhile, retail sales demonstrated a slight improvement, offering limited alleviation for the economy. The figures highlight continued pressure on China’s growth outlook amid a prolonged housing slump and lingering US trade tariffs. Analysts warn that without a stronger recovery in real estate; overall demand may remain weak despite selective consumption gains. 

WHAT HAPPENED OVERNIGHT
US stocks ended higher on Monday as easing oil prices reduced inflation worries following limited fallout from the Israel-Iran conflict. The Nasdaq led gains with its best session since May 27, driven by a 3% jump in the Philadelphia Semiconductor Index. Advanced Micro Devices soared 8.8% after Piper Sandler raised its price target. UPS and FedEx each added 1.1% following news they were named logistics partners for the newly launched Trump Mobile. Meanwhile, Sarepta Therapeutics plunged 42.1% after reporting a second patient death linked to its gene therapy treatment. 

The 10-year US Treasury yield slipped to 4.41% on Monday, retreating from an intraday high of 4.46%, as geopolitical tensions eased following signs Iran may be open to renewed nuclear talks. Diminished fears of a broader West Asia conflict and falling oil prices helped reduce inflation concerns, supporting bond demand. Attention now shifts to the Federal Reserve’s policy decision on Wednesday, where rates are widely expected to remain unchanged amid ongoing uncertainty in trade and fiscal outlooks.

The US dollar edged higher against traditional safe-haven currencies like the yen and Swiss franc on Monday, supported by signs of diplomatic de-escalation between Iran and Israel. Tehran’s request for Gulf states to mediate with the US in exchange for nuclear talks flexibility helped the dollar rebound to 144.65 yen and 0.8136 franc. However, the greenback weakened against most other majors, with the euro rising to $1.1576 and the dollar index slipping 0.25% to 98.02, as traders awaited a busy week of central bank decisions.

Brent crude oil prices fell on Monday, with Brent down 1.35% to $73.23 a barrel and WTI slipping 1.66% to $71.77, as reports emerged that Iran may be seeking to de-escalate tensions with Israel. The potential for a truce eased fears of supply disruptions in the oil-rich region, prompting a retreat from last week’s sharp gains. Trading remained volatile amid ongoing geopolitical uncertainty.

Day’s Ledger

Economic Data:

• US May retail sales data 
• US May industrial production data 
• US May manufacturing production data
• India May passenger vehicles sales data 

Corporate Actions:

• Jan-Mar earnings: Orissa Minerals Development Company
• Suditi Industries to consider raising of funds 
• Warren Tea to consider scheme of arrangement

Policy Events

• Bank of Japan interest rate decision
• US FOMC two-day policy meeting begins

TICKERS

• BIOCON opened ₹45 billion QIP at ₹340.20 floor price with up to 5% discount. Proceeds to reduce $1.2 billion net debt and support balance sheet.
• HCL TECHNOLOGIES signed multi-year deal with E.ON to manage global cloud and network transformation. Will use AI Force for hyperautomation, private cloud buildout, and shift to product-driven model.
• HYUNDAI MOTOR INDIA began passenger vehicle engine production at Talegaon plant acquired from GM. Facility capacity is 130,000 units annually, part of Hyundai’s India expansion strategy.
• ICICI BANK informed that RBI approved Sandeep Batra’s reappointment as executive director for two years starting Dec. 23. Shareholder nod will be sought. 
• IIFL FINANCE appointed ex-RBI deputy governor B.P. Kanungo as independent director. Kanungo served as MPC member and regional director across several states, and held ombudsman role during RBI tenure.
• INDIGO denied media reports of promoter Rahul Bhatia planning 4% stake sale. Reiterated commitment to long-term plans and future growth. InterGlobe currently owns 35.7% in the airline.
• JBM AUTO launched ECOLIFE electric bus in Europe via JBM Electric Vehicles. Tied up with Germany’s KazenMaier to deploy over 100 buses. Vehicle offers 400-km range and fast charging.
• JLR cut 2025-26 EBIT margin guidance to 5–7% due to tariff pressures, China weakness. Aims to reach 10% margin long-term. Battery EV penetration low at 2% in FY25.
• LEMON TREE HOTELS signed licence agreement for 72-room 'Lemon Tree Premier' hotel in Mhow. Property to include restaurant, banquet, spa, and pool; will be managed by Carnation Hotels.
• MASTEK won NHS England contract with Templar Executives for executive cybersecurity training. One-year deal aims to boost cyber resilience, with modules tailored for NHS boards and risk officers.
• PFC incorporated Saswad Transmission to execute 400/220kV project in Pune. Special purpose vehicle to handle land, surveys, reports, and clearances. PFC Consulting acts as bid process coordinator.
• SBI shareholders approved FY26 equity fundraising and cleared FY25 accounts. In May, board okayed raising up to $3 billion via foreign currency senior unsecured notes.
• TANLA PLATFORMS board approved buyback of up to 2 million shares at ₹875 each via tender route, totalling ₹1.75 billion. Shareholder and regulatory approval pending.
• TCS will deploy TCS BaNCS for Council of Europe Development Bank to automate reconciliations. Aims to enhance efficiency, visibility, and reduce manual errors through AI tools.

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