Month: August 2019

VATICAN CITY (Reuters) – Pope Francis has approved new statutes for the Vatican Bank, making an external audit obligatory and introducing other changes to bolster reforms that have turned around the once scandal-ridden institution.

The statutes, approved in a papal document released by the Vatican on Saturday, cap more than six years of changes at the bank since Francis was elected in 2013, since when he has made reform of the bank one of his priorities.

The bank had been caught in previous years in cases of corruption, tax evasion, embezzlement, money laundering and real estate fraud, some involving top officials and prelates, damaging the Vatican’s ethical credentials.

Andrea Tornielli, the Vatican’s editorial director, called the new rules “an important step in the process of adhering to the best international standards.”

Soon after his election, Francis considered closing the bank, formally known as the Institute for Works of Religion (IOR), but decided to continue reforms launched by his predecessor Pope Benedict.

The new statutes make an external audit mandatory. While this has taken place in the past few years, the previous statutes, issued in 1990 by Pope John Paul, called for internal audits.

The new rules ban bank employees, nearly all of whom are non-clerics, from holding consultancies or other roles with outside institutions.

FINANCIAL SCANDALS

The number of members of the lay board of supervisors, which is made up of internationally known outside financial experts, is increased to seven from five.

This will effectively strengthen the role of the lay board and weaken that of a supervisory commission of cardinals, whose number remains five.

For decades before reforms were implemented, the IOR was embroiled in numerous financial scandals as people with no right to have accounts opened them and used them for illicit purposes with the complicity of corrupt insiders.

In the past six years, hundreds of accounts have been closed at the IOR, whose stated purpose is to manage funds for the Church, Vatican employees, religious institutes, or Catholic charities.

Last year, the Vatican’s controller, the Financial Information Authority (AIF), carried out an on-site inspection of the IOR to ensure it was complying with anti-money laundering legislation and the outcome was “substantially positive”, the AIF said in its report for that year.

In 2017, Italy put the Vatican on its “white list” of states with cooperative financial institutions, ending years of mistrust. The same year, Moneyval, a monitoring body of the Council of Europe, gave Vatican reforms a mostly positive evaluation, particularly those carried out at the bank.

NEW YORK (Reuters) – U.S. stocks fell on Friday following renewed jitters over the U.S.-China trade war, capping a week of trading that saw big swings and high volume.

President Donald Trump said the United States and China were pursuing trade talks but he was not ready to make a deal, fanning fears over the impact of the trade war on the global economy.

Trump also said the United States would continue to refrain from doing business with Chinese telecoms equipment giant Huawei Technologies.

The week was marked by wild swings, but indexes finished nearly flat on the week. This week’s volume on U.S. exchanges was also the biggest weekly total of the year, exceeding 41 billion shares.

On Friday, all three indexes were down more than 1{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} in early trading and rebounded later in the session, with the Dow briefly turning positive at one point. This left a 315-point swing between the blue-chip index’s high and low of the day.

The frequent comments on trade are “leaving investors whipsawed,” said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

“As volatility has picked up, you’ve gotten more interest on the part of traders, and that in turn has led to even higher volume,” he said. “When you get moves like this and reversals, it brings a lot of high-frequency traders in and short-term traders.”

Shares of chipmakers and other tariff-sensitive technology companies .SPLRCT fell, with the Philadelphia SE Semiconductor index .SOX down 1.8{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}.

The Dow Jones Industrial Average .DJI fell 90.75 points, or 0.34{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}, to 26,287.44, the S&P 500 .SPX lost 19.44 points, or 0.66{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}, to 2,918.65 and the Nasdaq Composite .IXIC dropped 80.02 points, or 1{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}, to 7,959.14.

Shares of Amgen (AMGN.O) jumped 5.9{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} after news that a U.S. judge said patents relating to the Amgen’s blockbuster rheumatoid arthritis drug Enbrel were valid, denying a challenge by Novartis AG (NOVN.S).

Uber Technologies Inc (UBER.N) shed 6.8{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} after the ride-hailing company reported a record $5.2 billion quarterly loss and revenue that fell short of Wall Street targets.

Nektar Therapeutics (NKTR.O) shares also plunged, a day after the drug developer flagged manufacturing issues with its experimental cancer drug bempeg.

Declining issues outnumbered advancing ones on the NYSE by a 1.99-to-1 ratio; on Nasdaq, a 2.07-to-1 ratio favored decliners.

The S&P 500 posted 46 new 52-week highs and nine new lows; the Nasdaq Composite recorded 56 new highs and 129 new lows.

NEW YORK (Reuters) – U.S. stocks jumped on Thursday, led by a more than 2{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} gain in technology shares, while better-than-expected economic data in the United States and China helped to offset worries about the trade war.

The S&P 500 technology sector, which was at the heart of the recent selloff, provided the biggest boost to the benchmark S&P 500 index, which was on course for its third day of gains.

Advanced Micro Devices Inc gained 14.7{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} after the chipmaker launched its second generation of processor chip and said that it had landed Alphabet Inc’s Google and Twitter Inc as customers.

Symantec Corp jumped 11.6{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} after sources said chipmaker Broadcom Inc was in advanced talks to buy the cybersecurity company’s enterprise business.

“The overnight action was positive. That, along with the bounceback yesterday, gave us a nice tailwind coming into the market today, both for high-frequency traders who were buying the trend and also for bargain hunters who had seen stocks that were on the watchlist come down to a level that looked attractive,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

“So we’ve seen a lot of the tech names pop after they got hammered. There’s money coming back into those because investors have decided it created an opportunity.”

U.S. data pointed to a robust labor market as the number of Americans filing applications for unemployment benefits unexpectedly fell last week, allaying some worries about a recession and helping U.S. Treasury yields rise.

That followed better-than-expected export numbers out of China and some improvement for the country’s yuan currency, whose slide over the weekend spurred Wall Street’s worst day so far this year on Monday.

The Dow Jones Industrial Average rose 285.32 points, or 1.1{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}, to 26,292.39, the S&P 500 gained 45.67 points, or 1.58{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}, to 2,929.65 and the Nasdaq Composite added 154.78 points, or 1.97{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}, to 8,017.61.

On the down side, Kraft Heinz sank after it pulled its full-year forecast and wrote down the value of several business units by over $1 billion, capping a rough few months for the company.

Lyft Inc advanced 4.1{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} after the ride-hailing service raised its annual outlook and hinted at the end of its price war with Uber Technologies Inc. Uber, due to report after the bell and a high-profile loser since its market launch this year, rose 7.5{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}.

Advancing issues outnumbered declining ones on the NYSE by a 4.32-to-1 ratio; on Nasdaq, a 3.52-to-1 ratio favored advancers.

The S&P 500 posted 38 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 77 new highs and 84 new lows.

NEW YORK (Reuters) – The S&P 500 recovered from steep early losses to trade modestly higher by late afternoon on Wednesday as investors snapped up oversold shares, although signals from the bond market of a higher risk of recession kept a lid on gains.

“As we’ve cut the losses in half by lunch and continued to move higher, it’s become a matter of buyers remaining interested in continuing to buy stocks that they feel have been oversold and a lack of sellers’ supply,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

Trading was choppy, however, and focus remained on interest rates.

U.S. Treasury yields tumbled, with 30-year yields approaching record lows, on increasing worries over a global economic downturn and bets the Federal Reserve will have to pick up its pace of interest rate cuts to counter growing recession risks.

Financials have been the biggest loser among S&P 500 sectors, down about 1.5{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}.

Interest rates futures suggested traders are building bets the Fed will cut interest rates three more times by year-end.

The premium on three-month Treasury bill rates over 10-year Treasury yields, a closely watched U.S. recession indicator, was at its most elevated levels since March 2007.

The Dow Jones Industrial Average rose 12.13 points, or 0.05{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}, to 26,041.65, the S&P 500 gained 6.79 points, or 0.24{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}, to 2,888.56, and the Nasdaq Composite added 38.21 points, or 0.49{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}, to 7,871.48.

Central banks in New Zealand, India and Thailand on Wednesday cut their lending rates amid growing fears that the U.S.-China trade war could aggravate a slowdown in the global economy.

Trade concerns remerged after President Donald Trump last week threatened to slap 10{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} levies on the rest of $300 billion of Chinese imports and called China a currency manipulator on Monday.

The energy sector was down more than 1{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} after oil prices slid while real estate was up the most of any S&P sector.

Declining issues outnumbered advancing ones on the NYSE by a 1.10-to-1 ratio; on Nasdaq, a 1.01-to-1 ratio favored advancers.

The S&P 500 posted 17 new 52-week highs and 31 new lows; the Nasdaq Composite recorded 37 new highs and 202 new lows.

NEW YORK (Reuters) – Oil prices fell slightly on Tuesday, with Brent crude remaining near seven-month lows just below $60 a barrel because of increasing trade tensions between China and the United States.

Brent prices have lost more than 9{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} in the past week, with U.S. President Donald Trump vowing to impose new tariffs on Chinese imports and China making further moves against U.S. agricultural cargoes.

The United States also responded to a decline in China’s yuan on Monday by branding China a currency manipulator, pushing Beijing to accuse the United States of causing chaos in financial markets.

U.S. President Donald Trump on Tuesday dismissed concerns over a protracted trade war with China, as Beijing warned that Washington’s decision to label it a currency manipulator would lead to chaos in financial markets.

International benchmark Brent futures LCOc1 fell 58 cents to $59.23 a barrel by 2:25 p.m. EDT [1825 GMT], having dipped earlier in the session to their lowest since Jan. 14 at $59.07.

West Texas Intermediate crude CLc1 futures were down 78 cents a barrel at $53.92.

“As far as the oil market is concerned, there are two key questions: 1) Why should China carry on buying U.S. crude oil? and 2) Why should China continue to adhere to the U.S. sanctions when it comes to buying Iranian oil?” Commerzbank analyst Carsten Fritsch said in a note.

Global equities hit a two-month low .MIWD00000PUS and Brent fell more than 3{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} on Monday as traders worried the dispute between the world’s two biggest oil buyers would dent demand, helping to prompt Tuesday’s short-covering.

“It’s difficult for oil to hold (up) when you have such moves in equities,” Petromatrix analyst Olivier Jakob said.

Oil prices found little encouragement as the U.S. government forecast that growth in the Permian basin and other shale formations would largely offset production losses from the Gulf of Mexico due to Hurricane Barry.

Crude could still find some support after the market settles on Tuesday, with a Reuters poll showing U.S. crude oil inventories were expected to have fallen for an eighth consecutive week.

The American Petroleum Institute is set to release its weekly inventory data at 4:30 p.m. EDT (2030 GMT), with official government numbers to follow on Wednesday.

On the supply side, Iran has threatened to block all energy exports out of the Strait of Hormuz, through which a fifth of global oil traffic passes, if it is unable to sell oil as promised by a 2015 nuclear deal in exchange for curbing uranium enrichment.

Britain on Monday joined the United States in a maritime security mission in the Gulf to protect merchant vessels after Iran seized a British-flagged vessel.

(Reuters) – The Dow Jones Industrial Average tumbled more than 700 points in a global selloff on Monday, triggered by China’s willingness to let the yuan slide in response to the latest U.S. threats on trade.

The yuan sank to its lowest level in more than a decade, and President Donald Trump slammed it as “a major violation”, sending investors scurrying for the safety of assets such as government bonds, gold and the Japanese yen.

Adding to the tensions, China’s Commerce Ministry said that Chinese companies have stopped buying U.S. agricultural products, and that China will not rule out imposing import tariffs on U.S. farm products that were bought after Aug. 3.

Trump stunned financial markets last week by threatening to impose 10{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} tariffs on the remaining $300 billion of Chinese imports, abruptly abandoning a brief ceasefire.

“The President is playing a very risky game here,” said Robert Pavlik, chief investment strategist, senior portfolio manager at Slatestone Wealth Llc in New York.

“The Chinese yuan weakening the way it has and with interest rates tanking, I think the possibility of a recession has been pushed up.”

The benchmark S&P 500 .SPX is set to fall for the sixth straight session, its longest streak of losses since October 2018. The selloff was broad, with all the 11 major S&P sectors in the red.

Last week, the U.S. Federal Reserve cut interest rates for the first time in a decade as expected but poured cold water on investor hopes of a long easing cycle to cushion the economy from the bruising trade war.

The S&P technology sector .SPLRCT, heavily exposed by its chipmakers and other global technology players to Chinese markets, dropped 3.5{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}.

Apple Inc (AAPL.O) slid 4.7{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} as analysts warned that the newly proposed tariffs may hurt demand for its flagship iPhone, while the Philadelphia chip index .SOX slipped 4.1{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}.

At 12:55 p.m. ET, the tech-heavy Nasdaq Composite .IXIC was down 269.70 points, or 3.37{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}, at 7,734.37. The Dow Jones Industrial Average .DJI was down 743.46 points, or 2.81{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}, at 25,741.55 and the S&P 500 .SPX was down 82.70 points, or 2.82{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}, at 2,849.35.

The CBOE Volatility index .VIX, a gauge of investor anxiety, rose to its highest level in about three months at 22.40 points.

U.S. Treasury yields tumbled, with the 10-year yields hitting their lowest level since November 2016.

The difference between the three-month Treasury bill rate US3MT=RR and 10-year yields US10YT=RR increased to the widest since April 2007. This curve “inversion” between the two maturities has preceded every U.S. recession in the past 50 years. [US/]

Interest-rate sensitive banks .SPXBK shed 3.40{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}.

The rest of the high-flying FAANG group also lost ground. Facebook Inc (FB.O), Amazon.com Inc (AMZN.O), Netflix Inc (NFLX.O) and Google-parent Alphabet Inc (GOOGL.O) were down between 2.5{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} and 3.1{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}.

No.1 U.S. meat processor Tyson Foods Inc (TSN.N) was one bright spot, up 8.6{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} after beating quarterly profit estimates.

Declining issues outnumbered advancers for a 6.35-to-1 ratio on the NYSE and for a 6.72-to-1 ratio on the Nasdaq.

The S&P index recorded three new 52-week highs and 26 new lows, while the Nasdaq recorded 11 new highs and 229 new lows.

MUMBAI (Reuters) – Sudhir Gharpure and his sales team sat chatting at a big Maruti Suzuki (MRTI.NS) dealership on the outskirts of Mumbai some two hours after its doors were opened on a recent Saturday morning – not a single customer was in sight.

“There used to be close to 15-20 bookings each day, but now we’re down to 3-5 on good days,” said Gharpure, the general manager at the dealership.

Gharpure’s experience is not an isolated one. Across India dealerships are being pushed out of business and the Indian auto sector is going through its biggest slump in nearly two decades. Passenger vehicle sales fell for eight straight months until June, and in May sales dropped 20.55{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} – the sharpest recorded fall in 18 years.

Preliminary data indicates passenger vehicle sales may have plunged as much as 30 percent in July. The slump in India, along with a simultaneous slide in Chinese auto sales, is a blow for automakers wrestling with higher costs driven by more stringent emission norms and a push to develop electric cars.

Unlike in China, where the plunge in cars sales has been caused largely by new emissions rules, India has seen a mix of factors that have combined to erode demand for automobiles.

Prime Minister Narendra Modi’s 2016 ban on high-value bank notes, higher tax rates under a new goods and services tax regime, a boom of ride-sharing firms such as Uber and Ola, and a weak rural economy have all played a role.

But many dealers and automakers agree it is a deepening liquidity crunch among India’s shadow banks that has been the biggest single factor in an auto sales collapse, which some fear may lead to more than a million job losses.

Non-banking finance companies (NBFCs), or shadow banks, have dramatically slashed lending following the collapse of one of the biggest, IL&FS, in late 2018.

IL&FS, or Infrastructure Leasing & Financial Services Ltd, was a behemoth in shadow banking and its defaults and unraveling, amid fraud allegations, have dried up funding for rivals and led to a surge in their borrowing costs.

Non-bank or shadow banking firms generate credit outside traditional lenders, by means such as collective investment vehicles, broker-dealers or funds that invest in bonds and money markets.

In India, NBFCs have in recent years helped fund nearly 55-60{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} of commercial vehicles both new and used, 30{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} of passenger cars and nearly 65{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} of the two-wheelers in the country, according to rating agency ICRA.

To aggravate matters, the stress in the autos market has also prompted banks to begin trimming their exposure to the sector.

“The car doesn’t sell, it’s the finance that sells,” said R. Vijayaraghavan, a senior marketing consultant at the same Mumbai dealership. “Today the finance is not selling, so the cars are not selling.”

PROBLEMS AMPLIFIED

Some 286 dealerships have shut down in the last 18 months across India as rising costs for inventory management have made businesses unviable, according to the Federation of Automobile Dealers Association (FADA), a lobby group of auto dealers.

“The slowdown in the (NBFC) sector has dragged down vehicle sales growth,” said A.M. Karthik, financial sector head at ICRA. “Now the auto slowdown is becoming more visible as the liquidity squeeze continues.”

Automakers including Maruti Suzuki (MRTI.NS), Tata Motors (TAMO.NS), and Mahindra & Mahindra (MAHM.NS) are feeling the heat and have either cut production or temporarily closed plants to correct mounting stocks.

According to FADA data, passenger vehicle inventories now stand at 50-60 days up from around 45 days earlier, while those of two-wheelers are even higher at 80-90 days. For commercial vehicles, inventory levels range between 45 and 50 days.

“We are asking dealers to maintain an inventory of 21 days, which is almost half of the current levels,” said Ashish Kale, president of FADA.

At least four dealers from different brands said, however, there was little scope to reduce inventories as automakers were pushing them to buy stock despite there being no demand even with heavy discounting and other sops on offer.

While 70-75{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} of car sales were previously financed in-house by NBFC or bank agents sitting at a dealership, that has fallen to about 50{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}, say dealers, as buyers struggle to qualify under more stringent lending norms put in place by lenders that are under pressure to shore up their books.

Moreover, as many NBFCs typically lent to less creditworthy clients, banks are reticent to rush in to fill the void, as they themselves struggle to cope with an existing pile of about $150 billion in bad loans.

“The banking sector is certainly one of the factors that has affected the growth of the industry,” said R.C. Bhargava, chair of Maruti Suzuki, noting interest rates for car buyers have gone up in the last 12 months despite the central bank cutting rates.

EARLY RECOVERY UNLIKELY

With the autos sector employing more than 35 million people directly and indirectly, and contributing more than 7{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} to India’s GDP and accounting for 49{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} of its manufacturing GDP, the fallout from the autos slump is huge and presents a big challenge to Prime Minister Narendra Modi’s government as it begins its second term.

The entire supply chain, from vehicle manufacturers to component makers, are bleeding amid the slump.

“I’ve been making my payments for the last 30 years and the lenders know me,” said Adarsh Gupta, the director of finance at Autolite (India), a component manufacturing firm. “But even a two-day delay has people crying that I will default.

“I too want to pay, but because of the fall in cashflows I’m facing short-term issues and because of that it’s difficult to get more financing. This is the vicious cycle we are in.”

Kale, the FADA president, said on Sunday the trade body estimated that dealerships had collectively already cut around 7-8{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} of their workforce, or around 200,000 jobs nationwide.

“Most of the cuts which have happened are in front-end sales jobs but if this continues, then even the technical jobs will be affected because if we are selling less then we will also service less,” he said.

Still, automakers are hopeful of a recovery in the months ahead, helped by the September-December festive season that traditionally sees a surge in consumer spending.

“One can only wish that things improve sooner rather than later. With festive demand starting to seep through, we should start seeing a gradual improvement in sales,” said P.B. Balaji, group CFO at Tata Motors.

Analysts are more skeptical though, and say without vehicle financing becoming cheaper and easier the chances for that are low. With no silver lining in sight, analysts fear bad debts could mount in the auto sector, forcing banks to further reduce their exposure.

“We see market prices and sales coming down so there may be issues,” said a top official at the Indian Banks’ Association. “We could see a spillover in terms of bad loans for the overall sector, but we are going to wait and watch.”

Dealers said they were hopeful of tiding over the current downturn as the broader growth story for India remains intact, but there could be a lot more pain before a recovery kicks in.

“The future is going to be multi-brand car showrooms,” said marketing consultant Vijayaraghavan. “That is the only way for dealerships to survive going forward as overhead costs need to be shared.”

HOUSTON (Reuters) – The board of Citgo Petroleum [PDVSAC.UL] appointed by Venezuela’s congress chief was properly seated, a U.S. court ruled, dealing a blow to contested Venezuelan President Nicolas Maduro’s efforts to retake control of the Texas-based refiner.

Venezuelan congress chief Juan Guaido’s recognition by the Trump administration as the South American country’s legitimate leader makes his Citgo appointments valid, Delaware Chancery Court Vice Chancellor Kathaleen McCormick ruled on Friday.

The ruling provides U.S. court backing for Guaido as the country’s official leader with power to name directors of Citgo and its parent, Petroleos de Venezuela [PDVSA.UL] (PDVSA). However, she delayed the ruling for 10 days to give Maduro’s lawyers time to challenge the process used to confirm the appointments.

“We are grateful that the court has rejected the Maduro regime’s efforts to use the U.S. judiciary to advance their anti-democratic objectives,” Citgo said in a statement.

Quinn Smith, an attorney who represented the Maduro appointed board in the court case, did not respond to requests for comment outside normal working hours. Neither PDVSA nor the Venezuelan oil ministry immediately responded to requests for comment.

Citgo, Venezuela’s most important foreign asset, has been caught in a tug-of-war as President Donald Trump’s government has tried to use the firm as leverage to topple Maduro. Sanctions have barred Citgo from buying Venezuelan crude or paying it dividends.

Judge McCormick said the court “accepts as binding the U.S. President’s recognition of the Guaidó government and assumes the validity of the Guaidó government’s appointments to the PDVSA board.”

Her ruling set a high hurdle for Maduro’s lawyers to challenge the directors. McCormick wrote the court generally accepts director seatings, and noted the Maduro board’s lawyers “do not appear to contest the authority” of the officials who authorized the appointments.

In February, the Guaido-led congress appointed an ad-hoc PDVSA board with rights to nominate directors for U.S. units PDV Holding, Citgo Holding and Citgo Petroleum. However, Maduro retains the support of the Venezuelan military and still controls PDVSA and most state functions.

The Trump administration in January imposed sanctions on Venezuela and PDVSA designed to curb its oil revenue to pressure Maduro to step aside. Since then, its shipments have declined about 40{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}.

By Andrea Shalal, Alexandra Alper and Huizhong Wu

BEIJING/WASHINGTON (Reuters) – China on Friday said it would not be blackmailed and warned of retaliation after U.S. President Donald Trump vowed to slap a 10{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} tariff on $300 billion of Chinese imports from next month, sharply escalating a trade row between the world’s biggest economies.

Trump stunned financial markets on Thursday by saying he plans to levy the additional duties from Sept. 1, marking an abrupt end to a truce in a year-long trade war that has slowed global growth and disrupted supply chains.

Beijing would not give an inch under pressure from Washington, Chinese Foreign Ministry spokeswoman Hua Chunying said.

“If America does pass these tariffs then China will have to take the necessary countermeasures to protect the country’s core and fundamental interests,” Hua told a news briefing in Beijing.

“We won’t accept any maximum pressure, intimidation or blackmail. On the major issues of principle we won’t give an inch,” she said, adding that China hoped the United States would “give up its illusions” and return to negotiations based on mutual respect and equality.

Trump also threatened to further raise tariffs if Chinese President Xi Jinping fails to move more quickly to strike a trade deal.

The newly threatened duties, which Trump announced in a series of tweets after his top trade negotiators briefed him on a lack of progress in talks in Shanghai this week, would extend tariffs to nearly all Chinese goods that the United States imports.

The president later said if trade discussions failed to progress he could raise tariffs further – even beyond the 25 percent levy he has already imposed on $250 billion of imports from China.

Senior Chinese diplomat Wang Yi told reporters on the sidelines of an Association of Southeast Nations event in Thailand that additional tariffs were “definitely not a constructive way to resolve economic and trade frictions”.

U.S. Secretary of State Mike Pompeo, who was also in Bangkok, decried “decades of bad behavior” by China on trade and said Trump had the determination to fix it.

The news hit financial markets hard. On Friday, Asian and European stocks took a battering and safe-haven assets such as the yen, gold and government bonds jumped as investors rushed for cover.

Retail associations in the United States predicted a spike in consumer prices, hitting consumer stocks on Thursday on Wall Street, where Target Corp tumbled 4.2{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}, Macy’s Inc fell 6{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} and Nordstrom Inc was down 6.2{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48}.

Asked about the impact on financial markets, Trump told reporters: “I’m not concerned about that at all.”

Moody’s said the new tariffs would weigh on the global economy at a time when growth is already slowing in the United States, China and the euro zone.

The tariffs may also force the Federal Reserve to again cut interest rates to protect the U.S. economy from trade-policy risks, experts said.

CHINESE RETALIATION?

One Chinese official told Reuters it was not the first time Trump had “flip-flopped”, and that though the time between the talks being declared constructive and Trump’s threat of new tariffs was short, officials in Beijing were already prepared.

“Discussion followed by a fight has become the normal pattern,” the official said.

Possible retaliatory measures by China could include tariffs, a ban on the export of rare earths that are used in everything from military equipment to consumer electronics, and penalties against U.S. companies in China, analysts say.

So far, Beijing has refrained from slapping tariffs on U.S. crude oil and big aircraft, after cumulatively imposing additional retaliatory tariffs of up to 25{5048a9ac22a95e6c0a00d427d71a0d7ff263f9d98391fe7073acb5a0aa0a3f48} on about $110 billion of U.S. goods since the trade war broke out last year.

China is also drafting a list of “unreliable entities” – foreign firms that have harmed Chinese interests. U.S. delivery giant FedEx is under investigation by China.

“China will deliver each retaliation methodically, and deliberately, one by one,” ING economist Iris Pang wrote in a note.

“We believe China’s strategy in this trade war escalation will be to slow down the pace of negotiation and tit-for-tat retaliation. This could lengthen the process of retaliation until the upcoming U.S. presidential election,” Pang said.

FRUSTRATED

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin briefed Trump earlier this week on their first face-to-face meeting with Chinese officials since Trump met Xi at the G20 summit at the end of June and agreed to a ceasefire in the trade war.

“When my people came home, they said, ‘We’re talking. We have another meeting in early September.’ I said, ‘That’s fine, but until such time as there’s a deal, we’ll be taxing them,” Trump told reporters.

A source familiar with the matter said Trump grew frustrated and composed the tweets shortly after Lighthizer and Mnuchin told him China made no significant movement on its position.

Previous negotiations collapsed in May, when U.S. officials accused China of backing away from earlier commitments.

American business groups in China expressed disquiet over the latest round of U.S. tariffs. The U.S.-China Business Council said on Friday it was concerned the action “will drive the Chinese from the negotiating table, reducing hope raised by a second round of talks that ended this week in Shanghai”.

“We are particularly concerned about increased regulatory scrutiny, delays in licenses and approvals, and discrimination against U.S. companies in government procurement tenders,” said the U.S.-China Business Council’s President Craig Allen in an e-mail.

Ker Gibbs, the president of the American Chamber of Commerce in Shanghai, said that as market access in China “remains unnecessarily restricted”, the United States should continue its dialogue with Beijing, and “also work with like-minded countries to persuade China that fair and reciprocal trade and investment benefits all.”

CROPS AND DRUGS

Trump said Beijing had failed to fulfil promises to stop sales of the synthetic opioid fentanyl to the United States, which U.S. officials say was to blame for most of more than 28,000 synthetic opioid-related overdose deaths in the United States in 2017.

He also said Beijing had not followed through on a goodwill pledge to buy more U.S. agricultural products.

The U.S. Department of Agriculture on Thursday confirmed a small private sale to China of 68,000 tonnes of soybeans in the week ended July 25.

The United States also has yet to ease restrictions on U.S. companies’ sales to Chinese telecommunications giant Huawei, which Trump had pledged as a goodwill gesture to Xi after meeting at the G20 in Osaka.

MILAN (Reuters) – UniCredit (CRDI.MI) has found no evidence so far of any customer data having been accessed or compromised in relation to a major data breach at Capital One Financial Corp (COF.N), the bank said in a memo to staff on Thursday.

U.S. authorities are looking at whether a suspect charged with stealing data on more than 100 million Capital One customers from an Amazon.com Inc. cloud service successfully hit other targets.

On Wednesday, UniCredit said it had launched its own investigation into the matter after the bank’s name was mentioned in a blog post by a cybersecurity researcher as a possible additional target of the Capital One breach.

Earlier on Thursday the New York State Department of Financial Services said it had been notified by Italy’s biggest bank of the possible loss of consumer data related to the Capital One case.

A source close to the matter said UniCredit does not store any customer data on Amazon servers.