Indonesian stocks may suffer outflows, according to Citigroup Inc., as MSCI Inc. flags potential changes to its index weightings for companies with certain shareholding structures.
The benchmark Jakarta Composite Index fell 1.9% on Monday and fluctuated on Tuesday, after the index provider sought feedback on how to estimate the free float of Indonesian securities, or the portion of shares available for trading in the open market. The change might reduce some companies’ weightings in key MSCI indexes.
(Bloomberg) — The record-setting advance in global equities took a breather in Asian trading, as investors braced for a flurry of earnings from megacap technology companies and policy announcements from major central banks this week.
MSCI’s Asia Pacific gauge dipped 0.1% as indexes in Japan and South Korea retreated from their all-time highs. An index in Shanghai broke above the psychological barrier of 4,000 for the first time in a decade. The moves came after US indexes had closed at all-time highs as Chinese and US trade negotiators lined up an array of diplomatic wins for Donald Trump and Xi Jinping to unveil at a summit this week.
“What we’re hoping is for some agreement with hard numbers,” Lorraine Tan, director of equity research for Asia at Morningstar, said in a Bloomberg TV interview. “We’re still going to be skeptical in effect that we do expect heightened risks from tariffs and geopolitics — there is no escape from that.”
Easing trade tensions have helped fuel a stock rally, while US companies have so far emerged largely unscathed by tariffs, protecting margins through price increases and cost cuts. That optimism faces a reality check this week as investors look to the Federal Reserve meeting for clues on the path of rate cuts, while major technology firms including Amazon.com Inc. and Microsoft Corp. reveal whether earnings momentum can be sustained.
On Wednesday and Thursday, five firms that account for about a quarter of the US benchmark — Microsoft Corp., Alphabet Inc., Meta Platforms Inc., Amazon.com and Apple Inc. — will report results. A gauge of the “Magnificent Seven” megacaps jumped 2.6% on Monday.
“With the Fed on track to cut rates, extending the run would appear to hinge on this week’s lineup of high-profile earnings releases,” said Chris Larkin at E*Trade from Morgan Stanley.
In other corners of the market, the yuan climbed to its strongest level in nearly a year, amid optimism over a potential China-US trade deal. A gauge of the dollar edged lower for a second day, while Treasuries were little changed. Gold held just below $4,000 an ounce as progress in trade talks sapped demand for haven assets.
The yen advanced to 152.24 a dollar Tuesday, outperforming its Group-of-10 peers, as markets welcomed supportive remarks from Japanese officials and cheered the outcome of a high-profile meeting between US and Japanese leaders in Tokyo.
What Bloomberg strategists say…
FX traders are reading it to be a reminder that the US administration would prefer a softer dollar. However, the Bank of Japan still needs to do their part this week and set up a rate hike for December. Otherwise USD/JPY could flip back to the 153 area, or higher.
— Mark Cranfield, Markets Live strategist. Click here for the full analysis.
Copper — a bellwether for global growth — advanced and traded roughly $60 shy of a record set last year as investors assessed the cooling of trade tensions between the US and China.
Technology stocks were in focus after Amazon.com planned to cut as many as 30,000 jobs, Reuters reported. Earlier, Qualcomm Inc. shares rose to their highest price in 15 months after unveiling chips and computers for the lucrative AI data center market, aiming to challenge Nvidia Corp. in the fastest-growing part of the industry.
On trade, Trump told reporters on Monday that “I really feel good” about a deal with China, after officials unveiled a slew of agreements to ease tensions.
While markets cheered the latest developments, some analysts cautioned the deal now teed up for Trump and Xi to sign in South Korea ignored thorny issues.
Fundamental fights over national security appeared untouched, they said, along with Trump’s stated core mission of rebalancing trade. Making that harder, Chinese investment into America remains heavily restricted.
“While these developments have lifted market spirits, analysts remain skeptical that the underlying issues — such as national security and tech competition — will be fully resolved,” said Fawad Razaqzada at City Index and Forex.com. “Nevertheless, traders have embraced the risk-on mood.”
Meanwhile, Trump hailed the US’s alliance with Japan, reaffirming ties with a longstanding partner and praising new Prime Minister Sanae Takaichi on her plans to ratchet up defense spending as the pair met in Tokyo. Trump and Takaichi signed a framework on critical minerals.
Takaichi is navigating implementation of a trade deal brokered under her predecessor that includes a nebulous pledge for Japan to fund $550 billion in US projects.
Corporate News:
Domino’s Pizza Enterprises Ltd. shares fell after the fast-food chain said it hasn’t received any takeover offer from buyout firm Bain Capital, refuting an earlier report that sent the stock surging. Nidec Corp. shares tumbled as much as their daily limit of 19% on Tuesday as the company was set to be removed from the Nikkei 225 Stock Average and was flagged for special oversight by the Tokyo Stock Exchange. CSL Ltd. plunged to the lowest in almost seven years after Australia’s biggest drugmaker postponed plans to spin off its vaccines business, as falling US flu immunizations deepen concern over a slowdown in its Seqirus unit. HSBC Holdings Ltd. reported third-quarter revenue that beat estimates, driven by its key wealth businesses, even as a $1.1 billion provision tied to the Bernard Madoff fraud cases weighed on earnings. Some of the main moves in markets:
Stocks
S&P 500 futures were unchanged as of 1:06 p.m. Tokyo time Nikkei 225 futures (OSE) fell 0.2% Japan’s Topix fell 0.6% Australia’s S&P/ASX 200 fell 0.3% Hong Kong’s Hang Seng was little changed The Shanghai Composite rose 0.2% Euro Stoxx 50 futures fell 0.2% Currencies
The Bloomberg Dollar Spot Index fell 0.1% The euro rose 0.1% to $1.1661 The Japanese yen rose 0.4% to 152.26 per dollar The offshore yuan rose 0.2% to 7.0967 per dollar The Australian dollar was little changed at $0.6562 Cryptocurrencies
Bitcoin fell 0.5% to $113,860.86 Ether fell 0.9% to $4,092.4 Bonds
The yield on 10-year Treasuries was little changed at 3.98% Japan’s 10-year yield declined 1.5 basis points to 1.650% Australia’s 10-year yield declined two basis points to 4.17% Commodities
West Texas Intermediate crude fell 0.1% to $61.24 a barrel Spot gold rose 0.1% to $3,987.86 an ounce This story was produced with the assistance of Bloomberg Automation.
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President and CEO of Saudi’s Aramco, Amin H. Nasser, speaks during the Future Investment Initiative (FII) in Riyadh, Saudi Arabia October 29, 2024.
Hamad I Mohammed | Reuters
Think of Saudi Arabia and the first thing that comes to mind might be its massive, oil-derived wealth.
While oil continues to drive Saudi Arabia’s economy, the kingdom is now expanding into areas such as artificial intelligence, tourism and sports to diversify its growth avenues.
According to Saudi Arabia’s Minister for Investment Khalid Al Falih, more than half — 50.6% — of the Saudi economy is now “completely decoupled” from oil.
“This percentage is growing,” Al Failh told CNBC’s Dan Murphy, adding that government revenue used to be almost completely derived from oil money, but now, 40% of its revenue comes from sectors and sources that “have nothing to do with oil.”
“We’re seeing great results, but we’re not satisfied. We want to do more. We want to accelerate the kingdom’s diversification and growth story,” he said.
Saudi Arabia is doubling down on fast-growing sectors such as artificial intelligence, naming it one of its new growth areas, with Al Failh saying the kingdom will be a “key investor” in developing AI applications and large language models. Saudi Arabia would also build data centers “at a scale and at a competitive cost not achieved anywhere else.”
“AI has emerged [in] the last three, four years, and it’s definitely going to define how the future economy of every nation. Those who invest will lead, and those who lag behind, unfortunately, will lose,” he pointed out.
On Monday, AI chip company Groq’s CEO, Jonathan Ross, told CNBC that for AI infrastructure thanks to its energy surplus. The country could see more than $135 billion in gains by 2030 thanks to AI, according to PwC.
Saudi Arabia’s quarterly budget performance report revealed that total government revenue for the first half of 2025 came in at 565.21 billion Saudi riyals ($150.73 billion), with oil making up 53.4% of the country’s overall revenue, down from 67.97% in the same period in 2019.
In 2024, the country reported a 1.3% rise in full-year GDP, mainly driven by a 4.3% increase in non-oil segments. Oil activity, on the other hand, fell 4.5% year on year.
The country’s sovereign wealth fund — the Public Investment Fund — has acquired stakes in tech giants, video game publishers and football clubs as it uses oil revenues to diversify into other sectors.
PIF has acquired stakes in video-game heavyweight Electronic Arts, establishing the SoftBank Vision Fund with Masayoshi Son’s SoftBank Group Corp in 2017, and a takeover of English Premier League club Newcastle United in 2021.
When asked if declining oil prices were piling pressure on Saudi Arabia’s economy and government revenue, Al Falih said that the country was not scaling back budgets and there were no cuts to public spending.
Oil prices have fallen in 2025, with Brent crude spot prices down 13.4% so far this year, according to FactSet. Saudi Arabia’s oil revenue slid 24% in the first half of 2025 from a year earlier.
The government will continue to address all activities that require government spending, Al Falih said, noting that the PIF has grown sixfold since its creation and that the country was approaching nearly $1 trillion in capital deployed across sectors of strategic interest.
Tourism has also been a key growth area for Saudi Arabia. Ahmed Al-Khateeb, the country’s tourism minister, told CNBC that the sector’s share in GDP had grown to 5% in 2024 from 3% in 2019.
“We are [opening] resorts, new airlines, new airports, and the numbers are growing, and we are focusing on countries and visitors that are coming from outside to experience our great culture,” Al-Khateeb highlighted.
The tourism minister also expressed confidence that the sector could contribute 10% of GDP by 2030, aiming to raise it to 20% eventually.
“This 20% will help Saudi Arabia to diversify the economy and make it more sustainable,” he added.
