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Gulf markets stable amid mixed earnings and muted response to EU-US Trade Deal
Gulf stocks were little changed early on Tuesday, as investors cautiously welcomed a new trade agreement between the U.S.A. and the European Union. However, disappointing earnings for the second quarter weighed on the sentiment. In the framework deal that was announced at the weekend, the U.S. will impose a 15% tariff on the majority of EU products. This is the best the EU could hope for, according to Ursula von der Leyen, President of the European Commission. The initial relief that President Donald Trump was able to reach a deal, despite threatening to levy 30% on the goods, quickly turned to disappointment when compared to the 1%-2% tariffs in place prior to Trump's return to the White House. Trump's tariffs continue to raise concern over global growth. Any slowdown in consumption or trade threatens energy demand, and any fiscal stability of oil dependent Gulf economies. Saudi Arabia's benchmark stock index fell 0.3% as a result of a series of disappointing earnings in key sectors. Arabian Drilling's shares fell by more than 9% following a dramatic drop in its second-quarter profits, which was well below analyst expectations. The company announced that it would suspend cash dividends until 2025. Arabian Pipes' shares fell more than 6.6% as a result of missing its quarterly targets, and Jamjoom Pharmaceuticals' shares dropped by over 3.5% after they began trading without dividends. Dubai's benchmark stock index rose by 0.3%, reaching a record high of 17-1/2 years. It is now poised to gain for the fifth straight session. The rally was led by a 2.4% increase in Emirates Central Cooling Systems. Dubai Taxi Company rose nearly 6% following its second-quarter results that exceeded market expectations. The Abu Dhabi Index was flat, as mixed corporate earnings offset the optimism that had been generated by the strong performance of last week. Aldar Properties fell nearly 3% following a marginal decline in second-quarter revenues, despite reporting an order backlog record of 62.3 billion Dirhams at the end of June. Multiply Group, owned by IHC, dropped more than 4% after its second-quarter profits were halved compared to last year. Qatar's benchmark stock index fell 0.2% as traders took profits after a recent rally. Most sectors were in the red with Qatar Islamic Bank leading the way at 1.4%. (Reporting from Amna Mariyam, Bengaluru. Editing by Hugh Lawson.)
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Sources say that Indian refiner Nayara has reduced its crude production in response to EU sanctions
Russia-backed Indian refiner Nayara Energy has reduced operations at its 400,000-barrel-per-day refinery in the aftermath of new European Union sanctions that targeted the firm, five sources familiar with the matter said. Nayara is a privately-held company that runs India's largest refinery in Vadinar, a port located in Gujarat's western state. It controls about 8% of India's total capacity for refining, or 5.2 million barrels per day. Two sources claim that the sanctions against Russia's energy sector and other countries announced on July 18 have made it harder for Nayara, which exports refined products. This has led to storage problems. Sources in the trade and industry say that since the EU restrictions on Nayara fuel, traders are more cautious when dealing with it. Reports last week indicated that two tankers had skipped scheduled loadings at Vadinar, while another tanker with a cargo of Russian crude oil was diverted from the refiner. Nayara operates the refinery 70% of its capacity according to one source, and 80% according to another. The latest government data indicates that Nayara operated at over 100% of its capacity during each of the three months from June. All sources requested anonymity as they were not authorized to speak with the media. Nayara didn't immediately respond to an inquiry for comment. Nayara exports four million barrels per month of refined products, including jet fuel, diesel, gasoline, and naphtha. India is now the largest buyer of Russian crude oil by sea, following the invasion of Ukraine by Moscow. Nayara is a major buyer of Russian crude oil. It's majority owned by Russian companies including Rosneft. The Friday report stated that Nayara’s chief executive, Sergey Denisov who was its chief development officer at the time, resigned following the sanctions. Nayara announced on Monday that it had filed legal action against Microsoft, the U.S. software company, following its suspension services for the refiner. Nayara is a fuel station operator based in Mumbai. (Reporting and editing by Florence Tan; Mohi Naryan, Tony Munroe, Clarence Fernandez; Additional reporting by Nidhi verma)
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Russian media reports that a drone attack in Ukraine has resulted in one death and a fire at a train station near Rostov.
Russian authorities reported on Tuesday that multiple Ukrainian drone attacks in southern Rostov, Russia, killed one person, caused a fire, and stopped train traffic at the railway station. The Russian defence ministry reports only the number of drones destroyed and not how many Ukraine launched. It said that its defence units shot down a total 74 drones over night, including 22 in the Rostov area. The attack in Salsk resulted in a damaged car, which killed the driver. This was confirmed by the acting Rostov governor, Yuri Slyusar on Telegram. Russia's Railways announced on Telegram that a stationary freight train caught a fire at a train station in Salsk and the power was cut. This forced the suspension of all train traffic. Could not independently verify the story. Ukraine has not yet commented on the report, despite its repeated claims that it is a response to Moscow's constant attacks against Ukraine. Both sides deny that civilians are being targeted in the war which Russia began with its full-scale invader in 2022. Reporting by Lidia Kelley in Melbourne, Editing by Tom Hogue & Lincoln Feast.
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Union Pacific is close to a deal with Norfolk Southern for about $320 per share, Bloomberg News reported
Bloomberg News reported that Union Pacific was close to a deal with Norfolk Southern for a cash and stock transaction, valued at $320 per share. The report stated that the offer would consist of approximately two-thirds stock and one-third cash. However, it added that although discussions are in an advanced stage, terms may still change. We could not confirm the information immediately. Norfolk Southern and Union Pacific didn't immediately respond to comments. Union Pacific announced last week that it is in advanced discussions to acquire its competitor, signaling a possible deal to create a $200 billion coast to coast rail company. This could trigger further consolidation of remaining freight rail giants. The merger would be the largest ever in the industry and would create the United States' first coast-to-coast, single-line, modern freight railroad. This would have a significant impact on how goods, from grains to chemicals, move throughout the country. Reporting by Gnaneshwarrajan in Bengaluru, Editing by Alan Barona
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Waymo will launch autonomous ride hailing in Dallas, Texas next year
Alphabet Waymo announced on Monday that it would launch its autonomous ride-hailing services in Dallas by 2026. This will accelerate its U.S. growth as Tesla, the electric vehicle manufacturer, pushes its newly launched robotaxi service. Waymo, after years of cautious expansion, has recently accelerated its pace. It is now launching in more cities, through partnerships with ride hailing platforms and fleet operators. Waymo announced in a blog that it will be operating in Dallas through a multi-year partnership between the car rental company Avis and Budget Group. Avis will manage fleet operations including maintenance, depot infrastructure and depot management. Waymo provides more than 250.000 paid trips per week in cities like Phoenix, San Francisco and Los Angeles. Waymo launched its Austin service exclusively through the Uber platform this year. Tesla had already started a limited robotaxi test in the city, with about a dozen Model Y vehicles and a human safety monitoring system in the passenger seat. Tesla CEO Elon Elon Musk said that the company would rapidly expand its robotaxi service to other U.S. Cities and seeks regulatory approval from California Nevada Florida and Arizona. Commercializing autonomous cars has proven difficult, as several companies, such as GM Cruise, have shut down following collisions, recalls and federal investigations. Amazon-backed Zoox, which is preparing to launch its commercial service later this year, is one of the few remaining services. Waymo, the company that operated the paid driverless taxis for the United States until the Tesla trial in Austin, was the sole operator of these vehicles. The Waymo App will offer rides. As part of a broader nationwide rollout, the company also plans to launch in Miami and Washington, D.C., 2026. Avis has a broader strategy that includes transforming from a traditional car rental company to a mobility service provider. (Reporting from Akash Sriram, Bengaluru; Abhirup Roy, San Francisco; editing by Tasim Zaid)
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US Airlines opposes new limitations on facial recognition at airport security checkpoints
On Monday, groups representing major U.S. airports, airlines and travel companies urged the Senate not to pass a bill which would limit the Transportation Security Administration's ability to use facial recognition technology at security checkpoints. The Senate Commerce Committee will be considering bipartisan legislation on Wednesday that would protect Americans from being subjected to TSA facial-recognition screenings in airports, and to prevent the misuse of their data. Airlines for America, representing American Airlines, United Airlines, Delta Air Lines, Southwest Airlines and other airlines, as well as U.S. Travel, and two airport groups opposed the bill. In a letter, they said that it would "increase waiting times by slowing down identification verification at each airport security checkpoint." Two of the bill's authors, Democratic Senator Jeff Merkley, and Republican John Kennedy did not respond immediately to a comment request. Kennedy stated in May that the TSA subjected countless law abiding Americans to excessive facial-recognition screenings while they traveled, thereby invading their privacy and not letting them know they could opt out. Merkley stated in May that "people don't want to live under a surveillance state but the TSA is bringing us there with its unchecked use of facial recognition technologies." The bill would limit TSA's authority to use facial recognition and biometrics. TSA must offer passengers the option of having their identities verified without using facial recognition. TSA cannot discriminate against travelers who choose not to scan their faces. The airlines and other companies said that restricting TSA’s use of biometrics was a step in the wrong direction for national security. They added that it would prevent TSA from being able to achieve staffing efficiency through technology automation, as it would require officer-based interaction. This means 75% of TSA’s budget will be tied to staffing instead of technology investment. Airlines also warned that it could hinder innovations in the aviation industry, such as automated egates and TSA PreCheck TouchlessID and "create a chaotic and overwhelming environment at each airport security check."
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Peru considers approving $6 billion worth of mining projects
Dina Boluarte, the president of Peru, said that the country is weighing whether or not to approve a series of new mining projects, worth $6 billion, in an effort to increase revenues. Her government, which is deeply unpopular, wants to improve the revenue from the industry. Boluarte, in his traditional Independence Day speech to Congress, said that the government is evaluating 134 exploration projects and exploitation plans. Officials from Peru, which is the third largest copper producer in the world, are currently in negotiations with informal miners. They launched protests late in June and blocked a major transport corridor that was used by MMG and Glencore. The protests and blockades of the corridors by miners were halted during negotiations on a possible new law for this sector. Tensions grew among informal miners after the government removed over 50,000 from a formalization program, leaving only 31,000 to be brought in line with regulations before year's end. Boluarte stated that the government is working to establish a private mining trust to provide small miners with better access to financing. As Boluarte spoke, the police dispersed hundreds of protesters who were marching towards Congress with tear gas. Some protesters carried cardboard coffins in reference to the dozens of people killed during early unrest. Boluarte has received between 2% and 4 % of approval in recent polls, which is among the lowest ratings for a world leader. In his address, President Correa announced that a deal had been reached with Ecuador's Petroecuador, the state-owned oil company, to connect the oil fields of Ecuador to a pipeline in Peru, which would allow transport to Talara, the refinery in Peru. POVERTY NEXT TO 30% Peru's economy is recovering from the recession caused by unrest against the government, but poverty rates remain at around 30%. Boluarte's term expires in 2026. She took office late in 2022, after Pedro Castillo was arrested and ousted for trying to illegally dissolve Congress. She is under investigation for the deaths that occurred during protests. She denies any wrongdoing. In July, her cabinet caused further outrage by Double her salary "The icing is their salary increases and colluding to continue plundering our natural resources," protested Milagros Sánchez, a teacher at a public high school. Six presidents have served as Andean leaders since 2018. The next general elections are scheduled for April 20,26. (Reporting and writing by Marco Aquino, Sarah Morland, Editing by Natalia Siniawski & David Gregorio).
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Senator unveils aviation safety bill just before fatal crash hearing
Senator Ted Cruz, who revealed some details of his proposal earlier this month, will be joined by National Transportation Safety Board Chair Jennifer Homendy and Transportation Secretary Sean Duffy to discuss his proposal. It calls for the use of ADS-B technology (advanced aircraft tracking) by U.S. Army helicopters near civilian planes. Senator Ted Cruz will be joined this week by Jennifer Homendy, Chair of the National Transportation Safety Board, and Sean Duffy, Transportation Secretary, to discuss the details of his proposal. Cruz revealed some of the details earlier in the month. His proposal would require U.S. Army helicoptors to use ADS-B technology to track aircraft near civilian planes. It would also mandate a review helicopter routes throughout the country, and force the Army Inspector General to examine "systemic failures" which may have led to the most deadly U The unveiling of the new legislation on Tuesday will include some relatives of the victims. The NTSB will examine the Army Black Hawk helicopter altimeters and air data systems as well as Federal Aviation Administration oversight of Washington airspace, and will release thousands pages of documents from its investigation. The hearing will last over 25 hours on three days. The hearing will feature officials from the FAA and Army as well as airline representatives. Senators and regulators raised alarms over close calls that involved Army helicopters. The FAA reduced the area in which helicopters can operate last month. In March, FAA placed permanent restrictions on helicopter operations that were not essential to reduce the risk of collisions. This included permanently closing a key route. After an incident on May 1, in which two passenger flights had to abort their landings due to a nearby Army helicopter the FAA banned the Army from flying helicopters around the Pentagon. Seven Democratic Senators introduced legislation last month requiring an audit of helicopter operations and passenger safety at major airports. They also mandated new FAA safety assessments after fatal passenger airline crashes and required the use of ADS-B. Reporting by David Shepardson, Editing by Leslie Adler & Chizu Nomiyama
Air Canada's profit drops due to weak US travel demand
Air Canada announced a decline in its second-quarter profits on Monday. The drop was attributed to a weak passenger traffic into the U.S., which is a key market for Air Canada. This comes amid tensions between the U.S. and Canada.
Canadians are cancelling trips to the United States and boycotting U.S. goods after President Donald Trump imposed tariffs on Canada. He also made controversial comments suggesting that the country be annexed.
Summer is usually the busiest season for airlines.
The carrier expects to increase the number of available seat miles (ASMs) between 3.25 and 3.75% compared to the same period in 2018.
Canada's largest airline reported a C$0.60 ($0.4368) profit per share in the second quarter compared to C$0.98 per shares a year earlier.
Air Canada reported C$5.63billion in total operating revenue for the June quarter, up from C$5.52billion a year earlier. (1 Canadian dollar = 1.3735 dollars) (Reporting and editing by Shilpa Majumdar, Alan Barona and Shivansh Tiwary in Bengaluru)
(source: Reuters)