No: 17264 Friday, June 23, 2017

40

B u s i n e s s

FRIDAY, JUNE 23, 2017

LONDON: Most of Europe’s major stock

market indices swept lower yesterday by

a pronounced slide in oil prices this

week. Oil has been in the doldrums on

stubborn concerns over a vast supply

glut, casting a dark shadow over the

energy sector. “The rout in oil prices con-

tinues, and the worries this creates are

spilling over into equity markets as well,

which are looking decidedly unhealthy

once again,” said Chris Beauchamp, chief

market analyst at trading firm IG.

Both the London and Paris stock mar-

kets wer down 0.3 percent in afternoon

trading, while Frankfurt bucked the

trend, edging up 0.08 percent compared

with the close Wednesday. While oil

prices rose Thursday on news of falling

US inventories, this followed heavy

declines caused by the market remain-

ing awash with crude and remain down

nearly a fifth from peaks two months

ago despite OPEC and Russia agreeing

to extend production cuts.

“European equities have fallen again

as the weakness in oil is weighing on

investor confidence,” noted CMC

Markets analyst David Madden. “Oil has

fallen back ... and traders are worried it

could bring about low inflation and

diminished growth.” Low inflation can

ultimately lead to deflation, or a pro-

longed period of falling prices, causing

consumers to hold off purchases in the

hope that the cost of goods will drop

even further.

A barrel of bears 

New York crude had dived

Wednesday to ten-month lows, hitting

$42.05 a barrel. London Brent oil mean-

while hit $44.35, a trough last seen in

November. “Overall, the market remains

fixated on what happens with oil,”

added Beauchamp. Wall Street stocks

opened higher, with the Dow up 0.03

percent. “US equities are managing

minor gains in early-morning action as

crude oil prices appear to be stabilizing,

but are still in recently-reached bear

market territory,” said analysts at broker-

age Charles Schwab. — AFP  

Markets fall further on oil price drop

NEW DELHI/WASHINGTON: India is pushing for US approval of

its request to buy a naval variant of the Predator drone, officials

said, as Prime Minister Narendra Modi tries to revitalize relations

with Washington when he meets President Donald Trump for

the first time. Securing agreement on the purchase of 22

unarmed drones is seen in New Delhi as a key test of defense ties

that flourished under former President Barack Obama but have

drifted under Trump, who has courted Asian rival China as he

seeks Beijing’s help to contain North Korea’s nuclear program.

Modi’s two-day visit to Washington begins on Sunday. Trump

met Chinese President Xi Jinping in April and has also had face-

time with the leaders of nations including Japan, Britain and

Vietnam since taking office in January, prompting anxiety in

New Delhi that India is no longer a priority in Washington. If the

Indian navy gets the unarmed surveillance drones it wants to

keep watch over the Indian Ocean it would be the first such pur-

chase by a country that is not a member of the NATO alliance.

“We are trying to move it to the top of the agenda as a deliv-

erable, this is something that can happen before all the other

items,” said one official tracking the progress of the drone dis-

cussions in the run-up to the visit. India, a big buyer of US arms

recently named by Washington as a major defense ally, wants to

protect its 7,500 km coastline as Beijing expands its maritime

trade routes and Chinese submarines increasingly lurk in region-

al waters. 

But sources tracking the discussions say the US State

Department has been concerned about the potential destabilis-

ing impact of introducing high-tech drones into South Asia,

where tensions are simmering between India and Pakistan, par-

ticularly over Kashmir, which is divided between them. Other

strains have emerged, with the United States vexed by a grow-

ing bilateral trade deficit and Trump accusing New Delhi of

negotiating unscrupulously at the Paris climate talks to walk

away with billions in aid.

US officials expect a relatively low-key visit by Modi, without

the fanfare of some of his previous trips to the United States, and

one geared to giving the Indian leader the chance to get to

know Trump personally and to show that he is doing so. Modi is

also not expected to press hard on a US visa program the Trump

administration is reviewing to reduce the flow of skilled foreign

workers and save jobs for Americans, seeing limited gains from

raising a sensitive issue, they said. Indian Trade Secretary Ria

Teaotia told reporters this week the H-1B visa program, under

which Indian IT firms send large numbers of professionals to the

United States, would be one of the one issues on the table dur-

ing Modi’s visit.

Falling Off the Radar

“There is a palpable fear in New Delhi that the new US presi-

dent’s lack of focus on India, and limited appointment of South

Asia focused advisors, has resulted in India falling off the radar in

Washington,” Eurasia Group’s Shailesh Kumar and Sasha Riser-

Kositsky said in a note. Defense deals, however, are one area

where the two countries could make progress because of bipar-

tisan support, an Indian official involved in the preparations for

the visit said. The two sides have stepped up efforts in recent

weeks to get inter-agency clearance for the sale of the Guardian

drone, made by California-based General Atomics. India has

raised the issue of the drones with the Pentagon three times

since June 2016, officials said. US Senators John Cornyn and

Mark Warner wrote in March to Defense Secretary James Mattis

and Secretary of State Rex Tillerson saying the Guardian deal,

estimated at more than $2 billion, would advance US national

security interests and protect US jobs. —Reuters 

India eyeing breakthrough 

on US surveillance drones 

Modi travelling to US for first meeting with Trump

LUCKNOW: Indian Prime Minister Narendra Modi performs yoga with thousands of Indians to mark international yoga day

on Wednesday. — AP 

Rubbish piling up 

as Greeks protest 

ATHENS: Mounds of rubbish festered in soaring temperatures

in Athens yesterday as thousands demonstrated in support of

refuse collectors demanding the renewal of their contracts.

Authorities said around 5,000 people gathered in central

Athens, closing roads to traffic in the latest protest against

austerity measures imposed by the country’s international

creditors. Protesters descended on Syntagma Square, which

has become a crucible for popular discontent over Greece’s

flailing economy.  

Refuse collectors in the capital have not done their rounds in

three days due to a contract dispute, with unions suggesting

6,500 workers risk having their terms expire. With rubbish piling

up across the city, Athens municipality urged residents not to

take out their waste as temperatures topped 30 Celsius by mid-

day (0900 GMT). Similar protests were held in Greece’s second-

largest city Thessaloniki and in Heraklion, the capital of Crete.

Waste management in Greece is a recurring source of con-

tention due to a recruitment freeze and many workers being

offered only temporary contracts. In Athens, refuse workers are

calling for a new dump as the only current disposal site is

deemed to be overfilled and a public health risk. — AFP 

Dollar five-year 

super-cycle is 

over: Barclays

LONDON: Rises in US interest rates will probably prop the

dollar up over the next 18 months, but its multi-year run

higher since 2012 looks to be over, strategists from British

bank Barclays said in a note yesterday. The swifter recovery

of US banks and the US economy after the global financial

crisis of 2008 have funded a stronger dollar in recent years,

firstly against the yen in 2012 and 2013 and then more

broadly from the second half of 2014. But those moves

have long been stalling against the euro and the yen, and

a downturn in data - and faith in the economic promises of

US President Donald Trump’s administration - this year

have brought the index that measures the greenback’s

broader strength down from 14-year peaks. 

“We believe the USD super-cycle of the past five years is

over: the cyclical divergence that helped the dollar in

these years has likely peaked, not only because of the

European recovery, but also because the US business cycle

is more advanced than in Europe,” Barclays said in an

updated global outlook dated June 22. — Reuters 

ATHENS: A woman rides her motorbike past piles of

garbage filling a street in central Athens yesterday. —AFP 

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