Business
India’s stockmarket, which became the world’s fourth-largest earlier this year, swung wildly in the wake of a surprise election result that saw Narendra Modi’s Bharatiya Janata Party lose its majority. Having reached a record high after exit polls forecast a landslide for the BJP, the benchmark BSE Sensex index fell by 6% once the results were announced. It recovered a little the next day. The prices of shares in companies owned by Gautam Adani, a close associate of Mr Modi, were especially hard hit.
Mexican share prices also dropped after a shock election result, with Claudia Sheinbaum winning the presidency by a bigger-than-expected margin. Investors worried that her congressional majority would allow her to change the constitution and erode checks and balances. The peso fell, too.
America, meanwhile, is gaining a new bourse: the Texas Stock Exchange, which announced that it had raised $120m from investors including BlackRock and Citadel Securities. The exchange aims to rival the New York Stock Exchange and Nasdaq, and to host its first listing in 2026.
Nvidia’s market capitalisation soared past $3trn, leading it to overtake Apple as the world’s second-biggest company. The chipmaker’s share price has risen so much in recent years that it is conducting a ten-for-one stock split, to make small trades easier.
Shares in GlaxoSmithKline fell sharply after a judge in Delaware ruled that evidence linking Zantac, a heartburn treatment, to cancer cases was admissible in court. The share price of Sanofi, which sells a reformulated version of the drug, also fell.
GameStop saw its share price jump by as much as 75% after a photo posted to Reddit seemed to show Keith Gill holding 5m shares and 120,000 call options in the company. Mr Gill was one architect of the “meme stock” craze of 2021, exhorting retail traders to buy shares in order to give hedge funds (several of which had shorted GameStop) a bloody nose. By the time trading closed on the day the photo was posted, his position was worth $260m.
Bill Ackman sold a 10% stake in Pershing Square, the firm through which he manages a closed-end hedge fund with over $15bn in assets. The deal values his company at more than $10bn, and is thought to be a prelude to a public listing.
Chocks away!
Boeing launched its CST-100 Starliner spacecraft from Cape Canaveral, Florida, carrying two astronauts from NASA, America’s space agency. It was only the sixth launch of a new, crewed spacecraft in NASA’s history. Boeing’s Starliner programme is a rival to one run by Elon Musk’s SpaceX.
An EU court ruled that McDonald’s has lost its “Big Mac” trademark for chicken burgers, though it will keep it for the better known beef recipe. The decision followed a long battle between McDonald’s and Supermac’s, an Irish competitor that claimed the trademark was preventing its expansion.
An American court dealt the Securities and Exchange Commission a serious blow by rejecting its proposed rules to force private-equity and hedge funds to be more transparent. Championed by Gary Gensler, the regulator’s chairman, the rules would have required fund managers to send investors detailed quarterly performance and expense reports. The judge ruled that their imposition would exceed the SEC’s statutory authority.
Widespread medical use of psychedelics looks less likely after a panel assembled by America’s Food and Drug Administration voted against the use of MDMA, the active ingredient in ecstasy, to treat post-traumatic stress disorder. That is bad news for Lykos Therapeutics, a biotech firm developing such a treatment.
Softly, softly
The Bank of Canada lowered its policy rate from 5% to 4.75%, making it the first G7 central bank to cut rates in this cycle. Inflation has fallen to 2.7% from a peak of 8.1% in 2022. Though the central bank’s target is 2%, a softening economy may have prompted it to cut early: Canada’s unemployment rate hit 6.1% in April.
Fears grew that America’s economy may also be slowing down, after the private sector added fewer jobs than forecast in May. The manufacturing sector contracted, too, with factory activity falling. Treasury yields dropped in response, as traders marked up the probability that the Federal Reserve would cut rates sooner rather than later.
Global investors have withdrawn $40bn from environmental, social and governance funds so far this year, making it the first in which such funds have faced net outflows.