Major stock markets mostly rallied and oil prices retreated Thursday on hopes for an end to the war in Ukraine and despite fresh tariff threats.London was a rare faller owing to sharp losses to share prices of big companies, including Unilever, Barclays and British American Tobacco, on mixed earnings. That overshadowed news that the UK economy surprisingly grew in late 2024.US President Donald Trump’s talks with Russian leader Vladimir Putin to start negotiating an end to the war in Ukraine “has fostered a risk-on attitude among investors”, said Naeem Aslam, chief investment officer at Zaye Capital Markets.The positive showing “is a result of the potential reduction in geopolitical risks”, he added.With Russia a major producer of oil, crude futures fell heavily on easing supply concerns, while the dollar lost some of its safe-haven support.The development surrounding Ukraine helped ease fears over high US inflation — a situation that risks worsening because of Trump’s tariffs according to analysts.”Tariffs and inflation remain the only two themes that investors care about,” said Chris Beauchamp, chief market analyst at online trading platform IG.”Despite stronger CPI and PPI readings, stocks have avoided a selloff, with US markets demonstrating remarkable resilience,” he added.- Nestle surge -Data released Wednesday showed annual consumer inflation (CPI) rose to three percent in January, while wholesale inflation data (PPI) also came in hotter than expected.The data dealt a blow to hopes that the US Federal Reserve would continue to lower rates this year, having cut three times in 2024, with traders now pricing in just one.The figures came after Fed chief Jerome Powell on Tuesday warned that policymakers were in no hurry to loosen monetary policy further.”In our view, the bottom line is clear: the Fed has no reason to cut further. Inflation seems to be stuck above target,” wrote analysts at BoA Global Research.Meanwhile, Trump’s announcing he plans to unveil further tariffs Thursday failed to spook markets, with IG’s Beauchamp noting they won’t go into force until the beginning of April.”Investors have been strengthened in their belief that the tough talk on this front is more of a negotiating tactic,” he said.Among individual stocks, Nestle surged more than six percent in Zurich after the Swiss food giant posted better-than-expected annual sales.- Key figures around 1630 GMT -New York – Dow: UP 0.4 percent at 44,529.33 pointsNew York – S&P 500: UP 0.6 percent at 6,089.57 New York – Nasdaq Composite: UP 1.0 percent at 19,851.00London – FTSE 100: DOWN 0.5 percent at 8,764.72 (close) Paris – CAC 40: UP 1.5 percent at 8,164.11 (close)Frankfurt – DAX: UP 2.1 percent at 22,612.02 (close)Tokyo – Nikkei 225: UP 1.3 percent at 39,461.47 (close)Hong Kong – Hang Seng Index: DOWN 0.2 percent at 21,814.37 (close)Shanghai – Composite: DOWN 0.4 percent at 3,332.48 (close)Euro/dollar: UP at $1.0443 from $1.0387 on WednesdayPound/dollar: UP at $1.2537 from $1.2446Dollar/yen: DOWN at 153.03 yen from 154.39 yenEuro/pound: DOWN at 83.31 pence from 83.40 penceWest Texas Intermediate: DOWN 0.4 percent at $71.06 per barrelBrent North Sea Crude: DOWN 0.6 percent at $74.76 per barrelburs-rl/jj

Honda and Nissan on Thursday announced the scrapping of merger talks that would have created the world’s third-biggest auto company by unit sales behind Toyota and Volkswagen.Here are some key points about why the Japanese companies explored a tie-up, the reasons for their failure, and where this leaves them in a difficult global auto industry.- What is their history? -Honda was founded in 1948 as a small factory making motorcycles and is now the world’s biggest producer of the two-wheelers. It also makes 3.7 million four-wheel vehicles annually. More than 40 percent of these were sold in North America last year, roughly 20 percent in China, 18 percent in Japan and three percent in Europe.Nissan, founded in 1933, produced 3.1 million cars last year. North America accounts for 38 percent of its global sales, China 20 percent, Japan 14 percent and Europe 10 percent.French automaker Renault took a 36.8 percent stake in the then loss-making firm in 1999 and Mitsubishi Motors joined the alliance 17 years later, with Nissan taking a 34-percent stake in its struggling Japanese rival.But tensions emerged, stoked by the French state increasing its stake in Renault in 2015, followed by the 2018 arrest of Nissan boss Carlos Ghosn in Japan on suspicion of financial misconduct and his subsequent flight from the country.In 2023, Renault sold part of its stake in Nissan as part of an alliance overhaul that saw them retain 15 percent cross-holdings.- Why did they try to merge? -Nissan has been struggling, last year reporting a 93-percent plunge in first-half net profit and axeing 9,000 jobs in November. It is also saddled with billions of dollars of debt.For both companies, achieving economies of scale would have served to “enhance R&D capabilities, and better compete” in the areas of “advanced technologies including electrification and software-defined vehicles”, said Tatsuo Yoshida, senior auto analyst at Bloomberg Intelligence.Japanese carmakers have long lagged in the electric vehicle sector, especially against Chinese firms, with the country’s leading EV-maker BYD last year selling more vehicles globally than Honda and Nissan.The pair had already agreed on talks over partnership in electrification technologies and software development, and were later joined by Mitsubishi Motors.- Why did merger talks fail? -When the merger talks were announced in December the plan was that the two automakers along with Mitsubishi Motors would integrate their businesses under a new holding company.But local media reports have said Honda, frustrated by its rival’s slow decision-making on restructuring, wanted to make it a subsidiary, which Nissan’s leadership found unacceptable.”Nissan appears to be stressing its independence and freedom of (decision-making on) its strategy,” which “for Honda’s eyes may not maximise benefit of economy of scale,” Mizuho Securities analyst Yoshitaka Ishiyama said.- What happens next? -In the long term at least, both firms will need to seek alternative partners as they look to get a leg-up in the technology race, analysts say.”For Honda, there remains a concern about how to beef up its four-wheel vehicle business,” said Seiji Sugiura, auto analyst at Tokai Tokyo Intelligence Laboratory.”The fact that Honda executives had wanted to merge with Nissan means that they needed a close collaboration in R&D at a deeper level than an alliance, (which) involves sharing confidential company information,” he added.Nissan’s position is worse, as it “faces significant challenges, including financial instability and the need to strengthen its position in the advanced technology battlefield”, said Bloomberg’s Yoshida. Sugiura added that tech firm Foxconn “remains to be an option for Nissan”.Recent reports have said the Taiwanese giant, also known as Hon Hai, had been in talks with Renault over buying the French automaker’s stake in the Japanese firm.However, Sugiura added that a Foxconn-Honda tie-up was also possible “as it has technologies Honda wants”.And he added: “If Honda really wants Nissan’s technology, it can launch a hostile takeover bid of Nissan.”

Japanese auto giants Honda and Nissan confirmed on Thursday they had scrapped merger talks that would have created the world’s third-largest automaker by unit sales.The bid to join forces had been seen as an effort to catch up with US titan Tesla and Chinese firms in the electric vehicle market, as well as providing a lifeline to struggling Nissan.The firms said in a joint statement that they “agreed to terminate the MOU (memorandum of understanding) signed on December 23 last year for consideration of a business integration between the two companies”.”That the both companies were not able to reach an agreement is very regrettable,” Honda’s CEO and president Toshihiro Mibe told reporters.Mibe insisted in December that any merger would not be a bailout for Nissan, which announced last year thousands of job cuts after reporting a 93 percent plunge in first-half net profit.Further illustrating its problems, Nissan said on Thursday that it was now expecting an annual loss of $518 million owing to slumping sales.Japanese media reports have said the discussions unravelled after Honda proposed making its struggling rival a subsidiary instead of the plan, announced in December, to integrate under a new holding company.The automakers confirmed in the joint statement that Honda “proposed changing the structure from establishing a joint holding company… to a structure where Honda would be the parent company and Nissan the subsidiary through a share exchange”.Under a joint board, “the decision-making speed may slow when a tough decision is required,” Mibe said.Nissan’s CEO Makoto Uchida said “given the performance of the company, there is a difficulty to stand alone” and Honda’s proposal was “carefully discussed”.But, he said, “We could not accept this proposal as we were not sure how much our autonomy would be kept and if Nissan’s potential would be maximised” under the proposal.- Partnership -The automakers, however, will continue to seek “synergy effects” through a strategic partnership announced in August last year that also includes Nissan’s junior partner Mitsubishi Motors, Mibe said.Within the partnership agreement, the companies will collaborate to thrive in “the era of intelligence and electrified vehicles, striving to create new value and maximise the corporate value of both companies”, the joint statement said.The cancellation of the merger talks would have no impact on the earnings of both automakers, it said.Following the announcement, French automaker Renault, which holds about 35 percent of shares in Nissan, said it welcomed “Nissan’s intention to focus first and foremost on the execution of its turnaround plan”.It said it would “continue to support Nissan in its ongoing projects.”The head of Taiwanese tech giant Foxconn said this week it was open to buying Renault’s stake in Nissan after reports last year said it had made an approach for the company.Analysts have said both firms will need to seek alternative partners in the long term, to strengthen competitiveness in the technology race, and Foxconn could be an option.- Nissan loss -Nissan said Thursday it expected a net loss of 80 billion yen ($520 million) for the 12 months to March, sharply down from 426.6 billion yen profit achieved in the previous year.Honda separately reported a net profit of 805.3 billion yen for the nine months to December.This was a 7.4 percent decline on-year chiefly due to a decline in sales in China, even though overall sales increased 8.9 percent to 16.3 trillion yen.Honda made a slight change in its sales forecast for the full year to March, to 21.6 trillion yen from 21.0 trillion yen in the previous estimate, but kept its operating and net profit forecasts at 1.42 trillion yen and 950 billion yen, respectively.