Stocks Sink as Atomic Plant Shelling Adds to Ukraine Fears

A currency trader walks near a screen showing the Korea Composite Stock Price Index (KOSPI) at a foreign exchange dealing room in Seoul, South Korea, Thursday, Oct. 21, 2021. (AP Photo/Lee Jin-man)
A currency trader walks near a screen showing the Korea Composite Stock Price Index (KOSPI) at a foreign exchange dealing room in Seoul, South Korea, Thursday, Oct. 21, 2021. (AP Photo/Lee Jin-man)
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Stocks Sink as Atomic Plant Shelling Adds to Ukraine Fears

A currency trader walks near a screen showing the Korea Composite Stock Price Index (KOSPI) at a foreign exchange dealing room in Seoul, South Korea, Thursday, Oct. 21, 2021. (AP Photo/Lee Jin-man)
A currency trader walks near a screen showing the Korea Composite Stock Price Index (KOSPI) at a foreign exchange dealing room in Seoul, South Korea, Thursday, Oct. 21, 2021. (AP Photo/Lee Jin-man)

Asian markets tumbled Friday and crude bounced as news that Europe's biggest nuclear power plant was on fire after Russian shelling fueled a flight to safety and ramped up fears about the Ukraine war.

As Vladimir Putin's forces stepped up their invasion, Ukraine's foreign minister demanded an immediate ceasefire to avoid disaster at the Zaporizhzhia plant after its power unit was hit, AFP reported.

The International Atomic Energy Agency warned of "severe damage" if the reactors were hit and while Ukrainian authorities said the situation was now secured traders remain on edge.

Ukraine President Volodymyr Zelensky accused Russia of "nuclear terror".

The news comes as Moscow presses ahead with its incursion into its neighbor that has sent global markets spiraling and commodities such as wheat, metals and particularly oil soaring. That has in turn fueled concerns the global recovery from Covid will be derailed.

Tokyo and Hong Kong led losses across Asia while Sydney, Shanghai, Seoul, Singapore, Taipei, Manila and Wellington were also well down.

The losses followed steep selling pressure in New York and Europe, and Wall Street futures were sharply down Friday.

The dollar dipped against the safe-haven yen though it rose against most other currencies, including sitting at its highest level against the euro since mid-2020.

Gold -- a go-to asset in times of uncertainty -- was also up.

At the same time both main crude contracts rose, having retreated Thursday partly on hopes for an Iran nuclear deal that would allow Tehran to restart exports to the world market.

While world governments have not included Russian oil in their wide-ranging sanctions on Moscow owing to concerns about the impact on prices and consumers, trade has become increasingly tough as banks pull financing and shipping costs rise.

On Friday, the China-backed Asian Infrastructure Investment Bank (AIIB) said it will suspend business related to Russia and its neighbor Belarus, saying it was "in the best interests of the bank".

"The headlines about the Russian shelling of that nuclear plant are clearly driving a flight to quality trade," Chamath de Silva at BetaShares Holdings in Sydney said. "It's classic risk off right now."

Others pointed out that the war has exacerbated selling by profit-takers after world markets enjoyed a near two-year rally thanks to pandemic-era financial support.

Meanwhile, French President Emmanuel Macron said he fears the "worst is to come" after a conversation with Putin, who has said he intends to topple the government in Kyiv.

The conflict further complicates attempts by governments and central bankers to bring down soaring inflation, which has been fanned by their Covid largesse as well as elevated energy costs and supply chain snarls.

Federal Reserve boss Jerome Powell said this week that he intends to raise interest rates this month, though he tempered expectations of a half-point rise and instead indicated a considered approach to tightening policy.

"Rising commodity prices are a big concern for the market, prompting fears of stagflation," Fiona Cincotta of City Index said.

"The economic clinch point of this war is commodity prices. Higher energy prices, slowing growth, and surging inflation are not a good outlook."

- Key figures around 0230 GMT -
Brent North Sea crude: UP 2.3 percent at $112.99 per barrel

West Texas Intermediate: UP 2.7 percent at $110.60 per barrel

Tokyo - Nikkei 225: DOWN 2.1 percent at 26,020.60 (break)

Hong Kong - Hang Seng Index: DOWN 2.4 percent at 21,918.90

Shanghai - Composite: DOWN 0.7 percent at 3,456.93

Dollar/yen: DOWN at 115.40 yen from 115.45 yen late Thursday

Euro/dollar: DOWN at $1.1039 from $1.1069

Pound/dollar: DOWN at $1.3339 from $1.3350

Euro/pound: DOWN at 82.75 pence from 82.89 pence

New York - Dow: DOWN 0.3 percent at 33,794.66 (close)

London - FTSE 100: DOWN 2.6 percent at 7,238.85 (close)



Iraq Oil Output Exceeds 5 million bpd

Majnoon oil field near the Iraqi city of Basra (Reuters)
Majnoon oil field near the Iraqi city of Basra (Reuters)
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Iraq Oil Output Exceeds 5 million bpd

Majnoon oil field near the Iraqi city of Basra (Reuters)
Majnoon oil field near the Iraqi city of Basra (Reuters)

Iraq produces more than 5 million barrels of oil per day (bpd), Oil Minister Basim Mohammed told state news agency INA on Saturday.

According to Reuters, Iraq is pushing for a higher OPEC production quota as the economic fallout from the Iran war and new investment by oil majors increase pressure on Baghdad to boost output, potentially putting it at odds with the producer group.

The conflict has hit Iraq particularly hard, forcing major export cuts and depriving the state of oil revenue, which accounted for 88% of government income last year.


IMF: Any Slowdown in AI-driven Growth Would be Factor for Central Banks

IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
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IMF: Any Slowdown in AI-driven Growth Would be Factor for Central Banks

IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)

Central bankers around the world would need to consider any slowdown in AI-driven growth as they assess steps in their fight against inflation, International Monetary Fund Managing Director Kristalina Georgieva said on Friday.

Georgieva said concerns about dependence on the AI investment boom and high valuations were impacting markets around the world.

"Things are going up and down, and this is likely to continue," she told an audience at IMF headquarters in Washington, adding that the volatility would complicate the job of central banks at a time when risks to price stability had been growing.

A steep rout in technology stocks on Thursday rippled through markets on fears that ⁠the Democrats' victory ⁠in the US midterm elections would increase regulatory scrutiny of AI and slow the data center build-out, sending investors to the safety of bonds.

The political jitters are hitting an AI trade already on shaky footing due to worry about return on massive spending on AI-related infrastructure, with the meltdown spurring margin calls and spooking retail investors and hedge ⁠funds alike.

Georgieva said the AI investment boom was lifting growth in some countries, helping to offset a negative oil-supply shock triggered by the war in the Middle East, but it was also adding to inflationary pressures and financial stability concerns.

The IMF last month flagged significant growth and financial stability risks from a potential ending of the AI investment boom, among other factors, including a prolonged Middle East war. At the time, it warned that a steep drop in AI investment could lead to a sharp fall in asset prices, ultimately cutting global GDP ⁠by 1.1% ⁠by 2028, including a 1.8% drop in US output.

Georgieva did not repeat the downside forecast on Friday, but acknowledged the recent market volatility.

"Should there be a slowdown in the AI-driven growth impulse, it would need to be factored in as central banks assess the necessary steps in the fight against stubborn inflation," she said.

Democrats are planning to unleash a flood of new legislation targeting artificial intelligence systems and data-center development when they take control of the US Congress in January, Reuters reported on Friday, citing congressional aides and advocates.

That would mark a sharp shift from the Republican-led Congress, where lawmakers largely focused on promoting AI development and declined to pass legislation restricting the technology.


World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
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World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)

World food prices edged lower in October as weaker import demand contributed to monthly declines in cereal, dairy and meat prices, but were still nearly 6% higher than a year earlier, the United Nations' Food and Agriculture Organization said on Friday.

The FAO Food Price Index, which tracks monthly changes in international prices for a basket of food commodities, ‌averaged 133.9 points ‌in October, down from a revised ‌135.6 ⁠in September.

The index ⁠was 5.9% higher than a year earlier, but remained 16.4% below its March 2022 peak.

FAO's cereal price index fell 4.5% from September and was 12.6% lower than a year ago, as wheat and maize quotations declined. Wheat prices eased on weak import demand ⁠and improved production prospects, especially in Argentina.

"Expectations of ‌easing constraints on Black ‌Sea export flows added to the downward pressure on prices, ‌although continued disruptions to Black Sea logistics limited the decline," ‌FAO said in a statement.

Maize prices also eased after reaching a three-year high in September, pressured by the US harvest, expectations of ample supplies in South America and renewed ‌prospects of easing tensions in the Black Sea region.

Vegetable oil prices edged up 0.3%, ⁠as ⁠higher soybean and sunflower oil prices more than offset a fall in rapeseed oil prices.

Sugar prices rose 6.6%, their fourth straight monthly increase, to the highest level since December 2024, after rainfall disrupted harvesting in Brazil. They were now 28.8% above a year ago.

The dairy index fell 1.1%, as lower butter and cheese prices linked to ample supplies and subdued demand outweighed gains in milk powder.

The meat index declined 1.2%, while still slightly above its year-earlier level, as ovine and bovine meat prices fell.