Asian Shares Slip as US Shutdown, Tariffs and Geopolitical Tensions Loom

GLOBAL MOOD: Risk-off
Drivers: US Shutdown, Russia-Ukraine conflict, UN Sanctions on Iran

Asian markets turned cautious today, with risk-off sentiment prevailing as investors weighed the risk of a US government shutdown, new tariffs, and heightened geopolitical strains from Russia’s attacks on Kyiv and renewed UN sanctions on Iran.

TODAY’S WATCHLIST
 - India August Industrial Production Index
 - RBI MPC 3-day Meeting Begins
 - FOMC Member Williams Speaks  

THE BIG STORY
Russia launched one of the most sustained attacks on Kyiv since the start of the full-scale war on Sunday, firing hundreds of drones and missiles at the Ukrainian capital and other regions, killing at least four people and injuring dozens. Ukraine’s military reported that 595 drones and 48 missiles were launched overnight, of which 568 drones and 43 missiles were intercepted. Neighbouring Poland closed airspace near two southeastern cities and scrambled jets in response, highlighting regional security concerns.

Meanwhile, the United Nations reinstated arms embargoes and other sanctions on Iran over its nuclear programme, following a move initiated by Britain, France, and Germany at the Security Council. Tehran has warned that the sanctions will be met with a harsh response. The end of the decade-old nuclear deal, originally agreed by Iran, the US, Russia, China, and European powers, is likely to exacerbate tensions in the Middle East, following recent Israeli and US strikes on Iranian nuclear sites. Attempts to delay the return of all sanctions on Iran failed during the UN General Assembly meetings.

Data Spotlight 
US personal spending showed continued resilience in August, rising 0.6% from the previous month, following a 0.5% gain in July and exceeding market expectations of 0.5%, according to the Commerce Department. The increase marks the sharpest monthly rise in five months and extends the period of steady consumer demand despite heightened economic uncertainty and elevated borrowing costs. Spending picked up notably for nondurable goods, rebounding 0.8% after a flat July, while services grew 0.5%. Durable goods consumption eased slightly to 0.8% from July's 1.7%, highlighting a moderate slowdown in big-ticket purchases even as overall consumer activity remains strong.

Takeaway: US consumer spending remains robust, suggesting that the economy retains momentum and potentially reducing the need for further Federal Reserve rate cuts this year.

WHAT HAPPENED OVERNIGHT

• US Stocks edge higher on friday despite weekly losses
  • S&P 500 and Nasdaq rose but ended the week lower, snapping three-week winning streaks.
  • Paccar shares climbed 5.2% after new US tariffs on heavy-duty trucks.
  • Eli Lilly gained 1.4% following tariff announcements on pharmaceuticals.
  • Electronic Arts surged 14.9% amid reports of a potential go-private deal.

• US Treasury yields hold as PCE data confirms inflation outlook
  • Yield on the US 10-year note rose 7 basis points to 4.181%, while 30-year bond yield increased 5 basis points to 4.7576% on Friday.
  • Strong US economic data limited expectations for aggressive Fed rate cuts.

• US Dollar index falls slightly but near three-week high
  • The US dollar index slipped slightly to 98.3, still near a three-week high.
  • Strong US economic data, including personal spending and core PCE, tempered expectations for aggressive Fed rate cuts.
  • Dollar down 0.21% to 149.48 against the Japanese yen.

• Crude oil prices rise on Ukraine drone attacks, Russian fuel exports hit
  • Ukraine’s drone strikes on Russian energy infrastructure curbed fuel exports.
  • Brent crude oil prices rose 1.02% to $70.13 a barrel while US WTI gained 1.14% to $65.72 a barrel.

Day’s Ledger 

• Economic Data
• India August Industrial Production Index
• US Pending Home Sales Data

Corporate Actions

• Cybertech Systems And Software to consider dividend
• Camlin Fine Sciences to consider fund raising
• E2E Networks to consider fund raising

Policy Events

• RBI MPC 3-day Meeting Begins
• BoJ Board Member Noguchi Speaks  
• German Buba President Nagel Speaks  
• MPC Member Ramsden Speaks  
• FOMC Member Williams Speaks  

TICKERS To WATCH 

• ALKEM LABORATORIES transfers trade generics business to subsidiary ALKEM WELLNESS effective Oct 1.
• AZAD ENGINEERING  signs LTCPA with Mitsubishi Heavy Industries worth ₹6.51 bn for turbine engine components.
• BEML signs MoU with Bharat Forge & Data Patterns to support AMCA programme participation.
• CEIGALL INDIA  subsidiary wins NHAI highway project worth ₹9.81 bn; JV with JSP Projects bags GMADA infra project worth ₹5.09 bn.
• CHAMBAL FERTILISERS & CHEMICALS faces GST penalty of ₹5.27 bn from CGST & Central Excise.
• DEEPAK NITRITE subsidiary commissions hydrogenation plant at Dahej with ₹1.15 bn capex.
• GODAWARI POWER & ISPAT reports 6 deaths, 6 injuries after pellet plant accident at Raipur.
• GODREJ AGROVET signs MoU with MoFPI to invest ₹9.6 bn in innovation and manufacturing facilities.
• GUJARAT NARMADA VALLEY FERTILIZERS & CHEMICALS restarts Dahej TDI-II plant after safety checks post gas leak.
• INTERARCH BUILDING SOLUTIONS to invest ₹1 bn in new Andhra Pradesh plant for steel and electronics infra.
• JAGUAR LAND ROVER informed that UK govt offers £1.5 bn loan guarantee post cyberattack disruption.
• LEMON TREE HOTELS appoints Neelendra Singh MD, Kapil Sharma CFO & ED, Keswani ED & Chairman.
• OIL INDIA reports natural gas find in exploratory Offshore Andaman well.
• PG ELECTROPLAST to invest ₹10 bn in new 50-acre Sri City manufacturing campus over 5 years.
• POWER GRID CORPORATION approves two projects worth ₹7.05 bn for VOIP systems and disaster preparedness.
• SHRIRAM FINANCE infuses ₹3 bn in subsidiary Shriram Overseas via rights issue to strengthen capital base.
• TATA MOTORS CFO PB Balaji resigns to join JLR as CEO; Dhiman Gupta named CFO; Shailesh Chandra MD & CEO; Girish Wagh resigns, joins TML Commercial Vehicles board.
• VASCON ENGINEERS signs 5-yr MoU with Adani Infra; 13.15 mn sq ft projects identified in Mumbai.
• WAAREE ENERGIES acquires 76% stake in Racemosa Energy for ₹0.53 bn.

 MUST READ

• Most Indian Pharma Exports May Escape US Tariff, But Uncertainty Clouds Branded Generics
• Currencies Under Siege as Fiscal Dominance Takes Hold
• Labubu Syndrome: Anatomy of a Plush Pandemic
• Engage with Ladakh, not finger-pointing
• UN arms embargo, other sanctions reimposed on Iran over nuclear programme
• South Korea cannot pay $350 billion to US for tariff deal
• US tells India that Russian oil curbs are key to trade deal progress
  
• Jaguar Land Rover Gets UK Guarantee for £1.5 Billion Loan
  
• Private Credit Is On Course for Biggest Year in Emerging Markets
• Xi Is Chasing a Huge Concession From Trump: Opposing Taiwan Independence

See you tomorrow with another edition of The Morning Edge.

Have a great trading day.

Ladakh’s Aspirations and the Path Ahead

Ladakh is a frontier of both geography and aspiration. While its security is firmly held, the absence of elected representation and safeguards has fuelled protests in Leh and Kargil. The demands—statehood, Sixth Schedule inclusion, cultural and land protection—are not about separation, but about dignity and participation.

Lt Gen Syed Ata Hasnain  (Retd) writes, for New Delhi, the lesson is clear: a sensitive borderland needs patience, aspirational understanding, and empathetic outreach of the “hearts and minds” kind to ensure lasting resolution.

But violence in such an environment is a debilitating factor and needs to be completely eschewed in favour of full dialogue.