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The following is a summary of top news stories Monday.
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COMPANIES
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Tesla's Chief Executive Officer Elon Musk is no longer joining the board of Twitter, CEO of the social media company Parag Agrawal said late Sunday, in a reversal less than a week after announcing that Musk would be appointed. Musk was named to join the Twitter board after buying a major stake in the firm and becoming its largest shareholder. ‘Elon has decided not to join our board,’ Parag Agrawal tweeted. ‘Elon's appointment to the board was to become officially effective 4/9, but Elon shared that same morning he will no longer be joining the board,’ Agrawal said. ‘I believe this is for the best.’ Currently the world's richest man and with more than 80 million followers on the microblogging platform, Musk last week disclosed a purchase of 73.5 million shares or 9.2% of Twitter's common stock. Agrawal had announced on Tuesday that Musk would be joining the board, describing him as ‘a passionate believer and intense critic of the service which is exactly what we need’.
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French banking group Societe Generale said it was ceasing its activities in Russia and selling its majority stake in Rosbank, weeks after Ukraine's leader urged French firms to leave over Moscow's invasion of his country. Societe Generale said in a statement that its withdrawal from Russia would cost it €3.1 billion. ‘Societe Generale ceases its banking and insurance activities in Russia,’ the firm said in a statement. It also announced ‘the signing of a sale and purchase agreement to sell its entire stake in Rosbank and the group's Russian insurance subsidiaries’ to Russian investment firm Interros Capital. ‘With this agreement, concluded after several weeks of intensive work, the Group would exit in an effective and orderly manner from Russia, ensuring continuity for its employees and clients,’ Societe Generale said. The bank said it expects the deal to be completed in the coming weeks and that it was subject to approval from regulators.
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Ascential confirmed it is actively discussing ‘the merits’ of separating some of its assets. The firm, noting media reports, said the board ‘regularly evaluates’ the business's optimal organisational and capital structure. ‘Ascential confirms that it is in the early stages of evaluating the merits of a managed separation of certain assets of the group,’ said business-to-business media and events firm Ascential. This followed Sky News reporting on Saturday that Ascential was looking at demerging its digital operations and listing them separately in the US. ‘As discussions are exploratory at this stage, they may or may not lead to the board making a decision to undertake a managed separation of these businesses in due course. The board is committed to open and transparent engagement with all of its stakeholders and will communicate further if and as appropriate,’ the company added.
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Shin-Etsu Chemical Co said that it is going to increase the prices of all its silicone products, globally and in Japan. The prices will increase by 10% on all products for shipments made starting in May. The Tokyo-based chemical company explained that in the latter half of 2021, silicon metal, the main raw material of silicones, had faced a tightening of supply and demand. This, it continued, was due to electricity regulations in its main production area of China. In addition, the price of raw material methanol remains high, the cost of energy has risen and logistics costs and prices of secondary materials are also growing. As a result, the company said it had become ‘necessary’ to revise its prices, with ‘unavoidable’ increases.
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Heathrow Airport has recorded its busiest month since the start of the coronavirus pandemic. The west London airport said it was used by 4.2 million passengers in March. This represents nearly an eight-fold increase on the total during the same month in 2021. A spike in coronavirus-related staff absences, combined with difficulties finding and passing security checks for new recruits, means the aviation sector has struggled to cope with the number of people flying in recent weeks. Heathrow admitted ‘resources are stretched’ but described how it is ‘working closely with airlines and ground handlers to make sure this increase in demand can be met while keeping passengers safe’. Chief executive John Holland-Kaye said: ‘It is fantastic to see the airport coming back to life after two years, and I want to thank all team Heathrow colleagues for working together to serve our passengers. ’Everyone at Heathrow is doing everything we can to make sure passengers get on their way as smoothly and safely as possible.‘
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MARKETS
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Paris's CAC 40 index stood out amid a subdued start of the week for Europe, with both the French bourse and the euro staging a relief rally after Emmanuel Macron performed slightly better than expected in the first round of voting for France's next president. ’What a strange beast the euro is. The first round of French Presidential election voting produced a re-run of the 2017 run-off between Emmanuel Macron and Marine Le Pen....The backdrop is different, with the focus on the war in Ukraine rather than on the threat of a referendum on French EU membership, but a wobble seems inevitable at some point in the next two weeks,‘ said Societe Generale's Kit Juckes.
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CAC 40: up 0.4% at 6,573.80
DAX 40: down 0.7% at 14,191.05
FTSE 100: down 0.2% at 7,652.65
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Hang Seng: closed down 3.0% at 21,208.30
Nikkei 225: closed down 0.6% at 26,821.52
S&P/ASX 200: closed up 0.1% at 7,485.20
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DJIA: called down 0.2%
S&P 500: called down 0.5%
Nasdaq Composite: called down 0.9%
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EUR: up at $1.0927 ($1.0875)
GBP: up at $1.3052 ($1.3020)
USD: up at JP¥125.34 (JP¥124.33)
GOLD: up at $1,957.90 per ounce ($1,945.10)
OIL (Brent): down at $100.11 a barrel ($101.33)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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The UK economy's growth lagged behind expectations in February, data from the Office for National Statistics showed, increasing the possibility the country is heading into a recession. GDP grew by 0.1% month-on-month in February, slowing from 0.8% growth in January, and coming in behind market consensus - according to FXStreet - for 0.3% growth. The Office for National Statistics did note, however, that the UK economy is now 1.5% above its pre-coronavirus level in February 2020. The stats body said services output grew by 0.2% and was the main contributor to February's growth in GDP; which was partially offset by industrial production, which fell by 0.6% and construction output, which fell by 0.1%. The growth from the services sector - which is now 2.1% ahead of its February 2020 level - was driven by accommodation & food service activities which rose by 8.6%; however, this was offset by human health & social work activities which fell by 3.8%.
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China's factory-gate inflation was higher than expected in March, official data showed Monday, as Russia's war on Ukraine pushes up oil prices while a domestic Covid-19 resurgence strains food supplies and consumer costs. The producer price index measuring the cost of goods at the factory gate grew 8.3% annually, National Bureau of Statistics figures showed. This was slightly more than a Bloomberg poll of economists expected, while PPI also rose month-on-month. ’Geopolitical and other factors have pushed global commodity prices to continue increasing, driving the prices of oil, non-ferrous metals and other related industries to rise further domestically,‘ NBS senior statistician Dong Lijuan said in a statement. China's consumer price index, a key gauge of retail inflation, rose more than expected as well, by 1.5% year-on-year in March, the NBS said. Although consumer demand eased after festive periods earlier in the year, some food prices have picked up due to ’rising international prices of wheat, corn and soybeans‘ and domestic Covid-19 outbreaks, Dong said.
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French President Emmanuel Macron and his far-right rival Marine Le Pen were on Monday preparing for two weeks of tough campaigning after they reached a run-off of presidential elections that promises to be far tighter than their encounter five years ago. With more than 90% of the vote counted in the first round, projections showed Macron scoring 28-29%, with Le Pen on 22-24%. As the top two finishers, they will progress to a second round on April 24. Despite entering the campaign late and holding just one rally, Macron performed slightly better than expected and won immediate support from most of his defeated rivals ahead of the run-off. ’Make no mistake: nothing is decided,‘ he told cheering supporters at his campaign headquarters. ’The debate that we are going to have over the next fortnight will be decisive for our country and Europe.‘ Far-left candidate Jean-Luc Melenchon came close to qualifying for the second round after a late surge gave him a projected score of around 21%.
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Ukraine said Sunday it had found more than 1,200 bodies in the Kyiv region, the scene of atrocities allegedly committed by Russian troops, as residents in the country's east braced or fled ahead of an expected massive offensive. Heavy bombardments hammered Ukraine through the weekend, adding to mounting casualties six weeks into Russia's invasion of its neighbour. Shelling claimed two lives in northeast Kharkiv on Sunday morning, regional governor Oleg Synegubov said, the day after 10 civilians, including a child, died in bombings southeast of the city. ’The Russian army continues to wage war on civilians due to a lack of victories at the front,‘ Synegubov said on Telegram. In Dnipro, an industrial city of around a million inhabitants, a rain of Russian missiles nearly destroyed the local airport, causing an uncertain number of casualties, local authorities said.
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Beleaguered UK Chancellor Rishi Sunak has referred himself to Boris Johnson's independent adviser on ministerial interests as he sought to fend off questions over his family's financial affairs. In a letter to the prime minister, Sunak asked that Lord Geidt should review all his declarations of interest since he first became a minister in 2018 to ensure they had been properly stated. While he said he was confident he had acted appropriately at all times, his ’overriding concern‘ was that the public should have confidence in the answers. The move came after Labour warned that disclosures that his wife was non domiciled in the UK for tax purposes and that he still had a US green card when he became chancellor raised potential conflicts of interest. Deputy leader Angela Rayner has written to the prime minister and Lord Geidt with a series of detailed questions about his family's affairs which she said needed answering.
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Australia's prime minister has called for a May election that will be fought on issues including climate change and the pandemic. Scott Morrison on Sunday advised Governor-General David Hurley as representative of Australia's head of state, the Queen, to set the election date. Morrison will announce later on Sunday that Australia will go to the polls on May 14 or May 21. Morrison's conservative coalition is seeking a fourth three-year term. Morrison led his government to a narrow victory at the last election in 2019 despite opinion polls consistently placing the centre-left opposition Australian Labor Party ahead. The Liberal Party-led coalition is again behind in most opinion polls, but many analysts predict a tight result. The last election occurred in the hottest and driest year Australia had ever experienced. The year ended with devastating wildfires across Australia's south-east that directly killed 33 people and more than 400 others through smoke.
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By Lucy Heming; lucyheming@alliancenews.com
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