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Asian Stocks Sink, Oil Rises on US-Iran Deadlock

The Middle East war has sent energy prices climbing. Shammi MEHRA / AFP
The Middle East war has sent energy prices climbing. Shammi MEHRA / AFP
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Asian Stocks Sink, Oil Rises on US-Iran Deadlock

The Middle East war has sent energy prices climbing. Shammi MEHRA / AFP
The Middle East war has sent energy prices climbing. Shammi MEHRA / AFP

Most Asian shares were lower in morning trade on Monday, extending slides in global markets, as the impasse in the Middle East drove oil prices more than two percent higher.

Washington and Tehran agreed to a truce in April, but negotiations on ending the conflict have stalled and sporadic attacks in the region have continued, said AFP.

US President Donald Trump issued a fresh warning to Iran on Sunday, saying it had to move quickly towards a peace deal or "there won't be anything left of them".

The war has led to an effective blockade of the Strait of Hormuz, through which around 20 percent of global oil exports pass in peacetime.

The strait "remains meaningfully closed -- now approaching eleven weeks -- after the Trump-Xi summit in Beijing concluded without a breakthrough on reopening the waterway", MUFG's Michael Wan said Monday.

Tokyo shares lost 1.0 percent and Hong Kong was down 1.4 percent, while Shanghai was flat.

Sydney, Bangkok, Taipei, Singapore and Wellington also fell, with Jakarta tumbling 2.7 percent.

Seoul, which has renewed record highs in recent days thanks to the artificial intelligence stock boom, was trading up 1.2 percent.

"Global government yields rose sharply heading into the start of this week, as three forces collided: surging oil prices, fading hopes for a Strait of Hormuz resolution, and mounting fiscal concerns especially in the UK and US," Wan said.

However, last week's talks on trade between China and the United States have offered "a degree of relief for Asian markets", he added.

- 'Wave' of AI demand -

Data showed Monday that China's consumer spending in April grew at the slowest pace in more than three years -- a stark sign of the challenges Beijing faces to reignite domestic activity.

In Tokyo, shares in memory chip maker Kioxia were not yet trading after a reported rush of buy orders following stellar quarterly results on Friday.

Kioxia, the world's third-largest producer of NAND flash memory chips -- used as storage in AI data centres -- has seen its stock soar nearly 300 percent over the past year.

The firm has forecast an eye-watering 1.3 trillion yen ($8.2 billion) in operating profit for April-June, saying it is "riding the large wave of AI demand, which has led to record high revenue and profits".

In South Korea, Samsung Electronics -- which has also profited massively from the AI memory chip boom -- resumed union talks in a bid to avoid a strike over bonus payments, due to start Thursday.

Later Monday, traders will have their eye on a meeting of G7 finance ministers and central bank chiefs that kicks off in Paris, with bond selloffs in the spotlight, analysts said.

Then all eyes will be on quarterly results from US chip titan Nvidia, set for Wednesday, which will be scrutinized as tech investors question whether huge spending on AI data centers is justified by potential returns.

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Business

Saudi Arabia Emerges as Global AI Hub as Tech Firms Base Regional Operations in Riyadh

The SAS pavilion at the Global AI Show in Riyadh. (Asharq Al-Awsat)
The SAS pavilion at the Global AI Show in Riyadh. (Asharq Al-Awsat)
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Saudi Arabia Emerges as Global AI Hub as Tech Firms Base Regional Operations in Riyadh

The SAS pavilion at the Global AI Show in Riyadh. (Asharq Al-Awsat)
The SAS pavilion at the Global AI Show in Riyadh. (Asharq Al-Awsat)

Saudi Arabia is no longer preparing for the age of artificial intelligence; it is helping shape it. After designating 2026 as the Year of AI, the Kingdom has evolved from a promising market into a major technology hub, attracting global companies eager to establish regional operations.

Reflecting that momentum, US data and AI company SAS selected Riyadh as its regional headquarters for the Middle East and North Africa a year ago. Founded in 1976, SAS is marking its 50th anniversary this year and is among the world’s leading providers of predictive analytics, data management, and machine learning solutions, serving industries including energy, finance, and healthcare.

Speaking to Asharq Al-Awsat on the sidelines of the Global AI Show, held in Riyadh on June 29-30, Khaled Moussa, Senior Customer Account Manager at SAS, said Saudi Arabia’s Vision 2030 has accelerated the adoption of advanced and sophisticated technologies.

He noted that the Kingdom’s modern digital infrastructure has enabled increasingly complex technological operations, fueling demand for SAS solutions and those of other technology firms across multiple sectors.

“The remarkable growth taking place in Saudi Arabia is attracting significant attention in the United States and beyond,” Moussa said. “That has encouraged international companies to make serious commitments to the market because of its rapid adoption of intelligent technologies.”

Although SAS has operated in Saudi Arabia since 1984, he added, “the market has reached a new level of maturity, both in terms of regulation and technology adoption.”

Moussa said SAS maintains a strong presence across several strategic sectors, particularly energy, through its collaboration with Saudi Aramco, the world’s largest energy company.

The company also works with the Saudi Electricity Company, providing advanced forecasting tools to predict electricity demand and support long-term planning, helping improve operational efficiency and future preparedness. SAS also supplies analytical solutions for the water sector to strengthen sustainability efforts.

Moussa highlighted two areas where predictive analytics deliver particular value. The first is market forecasting, where SAS helps organizations anticipate trends and make data-driven decisions while reducing unnecessary costs. The second is predictive maintenance, which allows industrial operators to identify potential equipment failures before they occur, minimizing downtime and avoiding costly repairs.

He also underlined SAS’s long-term commitment to developing Saudi talent. The company partners directly with universities to offer six-month paid internships, equipping students with practical experience before they enter the workforce.

In addition, SAS extends its training initiatives to schools and universities, teaching students how to apply AI technologies and preparing them for future careers.

The Global AI Show brought together more than 100 experts and global leaders from 80 countries, including government officials, innovators, and digital transformation specialists.

The event attracted more than 10,000 participants, 100 exhibitors and sponsors, and coverage from 200 international media organizations, reinforcing Riyadh’s growing role as a global platform for AI policymaking and international technology cooperation.

Business

China Factory Activity Returns to Expansion Riding AI Global Boom

A man stands next to a poster of a humanoid robot during the China International Supply Chain Expo (CISCE) in Beijing on June 25, 2026. (AFP)
A man stands next to a poster of a humanoid robot during the China International Supply Chain Expo (CISCE) in Beijing on June 25, 2026. (AFP)
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China Factory Activity Returns to Expansion Riding AI Global Boom

A man stands next to a poster of a humanoid robot during the China International Supply Chain Expo (CISCE) in Beijing on June 25, 2026. (AFP)
A man stands next to a poster of a humanoid robot during the China International Supply Chain Expo (CISCE) in Beijing on June 25, 2026. (AFP)

China's factory activity returned to expansion in June, driven by demand for chips, computers and other AI-related products, as robust export orders and front-loading to the United States to get ahead of tariffs offset weakness elsewhere in the economy.

The data suggest global AI investment is providing an important cushion for manufacturers in China's $20 trillion economy, even as disruption from the Middle East conflict and a prolonged property slump continue to weigh on broader growth.

The official manufacturing purchasing managers' index (PMI) rose to 50.3 in June from 50.0 in May, according to a survey by the National Bureau of Statistics (NBS). It beat a median forecast of 50.0 in a Reuters poll.

"Exports to meet international demand for chips and other AI-related products, as well as front-loading to get ahead of new US Section 301 ‌tariffs due late ‌July and improved domestic demand due to lower upstream costs underpinned the improvement," said ‌Dan ⁠Wang, China director ⁠of consultancy Eurasia Group.

The number of domestic infrastructure projects ticked up over the last month too, she added. US retailers have brought forward orders from China by four to six weeks to secure their inventories for Black Friday and Christmas holiday sales before the expected tariff hikes later this year, shipping executives said.

The sub-index for new export orders returned to expansion in June, rising to 50.1 from 48.6, while the production and overall new orders gauges edged up to 51.4 and 51.2 from 51.2 and 49.9, respectively.

Factory gate prices slipped to 48.2 from 51.9 in May, however, following five months of expansion, with ⁠employment also continuing to trend downward.

"The export strength is set to continue, driven by ‌global AI investment demand," said Xu Tianchen, senior economist at the Economist Intelligence ‌Unit. "Second, more policy easing will come."

"For example, fiscal spending has lagged behind budget arrangements, and it should accelerate in the coming months. There ‌is also room for monetary easing," he added.

The non-manufacturing PMI, which includes services and construction, improved to 50.2 ‌versus 50.1 in May, while the composite PMI came in at 50.6 compared with 50.5 a month earlier.

AI BOOM OR BUST

With the property crisis showing little sign of stabilizing and household spending remaining subdued, policymakers face the challenge of managing a two-speed economy.

There is enormous international demand for semiconductors powering data centers and advanced electronics, playing to China's manufacturing strengths, but there does not seem ‌to be much demand for anything else.

Exports of furniture, for example, grew just 1.9% in value terms year-on-year, according to the latest trade data for May, while shipments of ⁠automated data processing equipment ⁠jumped 60% over the same period.

Furthermore, retail sales, a proxy for domestic demand, fell for the first time in over three years, the most recent data for May showed, along with a faster slump in new home prices.

Julian Evans-Pritchard, head of China Economics at Capital Economics, said the improvement "remains heavily dependent on exports and AI-related tech," and warned that "despite the improvement in activity, the manufacturing sector appears to be slipping back into deflation."

China has set a 2026 growth target of 4.5% to 5.0%, slightly below last year's 5% expansion.

With signs of precautionary buying in the wake of Middle East-related price pressures fading, input costs rising and overseas customers running down inventories while awaiting a ceasefire, Chinese manufacturers may increasingly need demand from the world's largest consumer market to regain momentum.

A closely watched meeting in May between US President Donald Trump and Chinese leader Xi Jinping, however, produced no meaningful breakthroughs, whether on tariffs or Beijing using its influence over Tehran to end the Iran war.

"The sluggish data from the past few months will likely result in a notable slowdown in second-quarter GDP," said Lynn Song, chief economist for China at ING.

"We're looking for a slowdown to 4.6% year-on-year, with risks slightly balanced to the downside."

Business

EU's Side of US Trade Deal to Come Into Force on July 1

FILED - 03 June 2024, Berlin: FILE PHOTO - The European Union flag flies in the wind. Photo: Sebastian Gollnow/dpa
FILED - 03 June 2024, Berlin: FILE PHOTO - The European Union flag flies in the wind. Photo: Sebastian Gollnow/dpa
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EU's Side of US Trade Deal to Come Into Force on July 1

FILED - 03 June 2024, Berlin: FILE PHOTO - The European Union flag flies in the wind. Photo: Sebastian Gollnow/dpa
FILED - 03 June 2024, Berlin: FILE PHOTO - The European Union flag flies in the wind. Photo: Sebastian Gollnow/dpa

The European Union's side of a trade deal struck with the United States last year, which will remove import duties on many US goods, will come into force on July 1, said a formal European Union regulatory filing.

The EU said this ⁠regulation would apply ⁠from July 1 until December 31, 2029, Reuters reported.

"Where appropriate, the Commission shall submit together with the comprehensive assessment a legislative proposal to extend ⁠the period of application of this Regulation," added the regulatory filing.

Under the agreement, the EU agreed to remove import duties on US industrial goods and provide preferential access to US farm produce.

It will also extend duty-free imports of ⁠US lobster, ⁠a mini-deal struck with Trump during his first term as president.

The EU legislation expires at the end of 2029 and includes multiple safeguards that would allow the EU to suspend concessions if the United States breaches the trade deal's terms.