The US has allocated a record-breaking $17.9 billion in military aid to Israel over the past year, following the escalation of violence in Gaza, which started on October 7, 2023.

This unprecedented level of funding, detailed in a report from Brown University’s Costs of War project, marks the largest annual aid package Israel has ever received from the US.

The funds have been primarily used to support Israel’s military operations against Hamas in Gaza and related conflicts in the wider Middle East region.

The report also highlights an additional $4.86 billion in US military operations, including naval interventions aimed at protecting shipping routes in the region from threats posed by Houthi forces in Yemen.

As the conflict surpasses its one-year anniversary, the financial and human toll of the war continues to rise, with no clear resolution in sight.

Record military aid amid Middle East conflicts

Since the start of the Gaza war, the US has funnelled $17.9 billion in military aid to Israel, marking a historic high.

This comes as Israel wages an intensive military campaign against Hamas, which has escalated into the deadliest conflict between Israelis and Arabs since 1949.

More than 40,000 Palestinians have been killed in Israeli retaliatory strikes, with over 1,500 Israelis losing their lives, mostly in the initial Hamas attack.

The financial support from the US has been primarily focused on bolstering Israel’s military defences and ensuring it remains equipped to handle the multifaceted conflict in Gaza, Lebanon, and other neighbouring regions.

Along with the aid provided directly to Israel, the US has also spent approximately $4.86 billion on other military operations in the region.

This includes increased naval deployments aimed at safeguarding key shipping lanes, particularly from threats posed by Houthi forces in Yemen, who have aligned themselves with Hamas.

These operations form part of the broader US strategy to protect its interests in the region and support Israel in its fight against multiple adversaries.

Longest and deadliest Arab-Israeli conflict since 1949

The current war between Israel and Hamas, now entering its second year, is the longest and deadliest conflict between Israelis and Arabs since the end of the 1949 Arab-Israeli war.

The human cost has been staggering, with over 40,000 Palestinian casualties, primarily in Gaza, and thousands more deaths in Lebanon, where Israel has expanded its military strikes against Hezbollah fighters.

This expansion into Lebanon, combined with Iran’s support of Hamas, underscores the widening scope of the war, with no sign of resolution in the near future.

According to the Brown University report, the US has historically been Israel’s biggest military benefactor, providing over $251.2 billion in military aid since 1959, adjusted for inflation.

The $17.9 billion allocated since October 7, 2023, marks a record for the largest single-year military aid package Israel has ever received.

This aid package includes funds for arms sales, military financing, and the transfer of surplus US military equipment to Israel, further cementing the close military alliance between the two nations.

Unseen costs and political division

Despite the massive financial support, the full extent of US aid to Israel remains unclear.

Researchers involved in the Brown University report have suggested that the Biden administration has taken steps to obscure the true value and specifics of military equipment shipped to Israel, making it difficult to provide a complete estimate.

This issue, combined with the controversial nature of the conflict and its civilian casualties, has sparked debate within the US, particularly during the ongoing presidential campaign.

Nevertheless, President Joe Biden has maintained that his administration has done more to support Israel than any previous government.

As the conflict shows no sign of abating, experts predict that US military aid to Israel will continue to rise.

With Israel’s military actions expanding into Lebanon and increasing tensions with Iranian-backed forces, the financial burden on the US is expected to grow, potentially surpassing the $17.9 billion already spent.

The ongoing costs of naval operations in the region and heightened security measures also indicate that the US commitment to supporting its allies in the Middle East will not wane anytime soon.

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Indian benchmark equity indices opened in the green on Monday on positive cues from the Asian markets. 

At the opening bell on Monday, the BSE Sensex was by 412 points, while the Nifty50 rose 110 points.

However, both benchmarks have since then pared the gains. 

At the time of writing, the BSE Sensex was largely unchanged from the previous session at 81,622.94, while the Nifty50 index was also largely flat at 24,987.90. 

Global cues bolstered by strong US jobs data

Asian equity benchmarks rose on Monday after strong US jobs data released on Friday dispelled fears of a recession. 

Japan’s Nikkei led regional equity gains with a 2% rally earlier in the session, aided by the softer yen.

Australia’s stock benchmark was 0.1% higher, while South Korea’s Kospi rose 0.3%. 

Titan pares opening gains

Titan shares opened nearly 2% higher on Monday, and are now currently 2% lower.

The share price of Titan fell even after the company reported positive earnings for the September quarter. Domestic operations grew by nearly 25% on-year led by significant pick-up in consumer demand momentum after the government cut import duty of gold. 

ONGC shares slump more than 3%, Shipbuilding, railways stocks down 7%

ONGC’s stock slumped more than 3% as crude oil prices fell on Monday, while investors booked profits after last week’s gains.

Oil prices declined on Monday as traders waited for Israel’s response to Iran’s attack.

As there have been no  fresh escalations in tensions, oil prices took a breather. 

ONGC is an oil exploration  and production company, and India’s largest crude oil producer.

When oil prices decline, it hurts the profitability of the upstream company. 

Meanwhile, shipbuilding and railways stocks plunged on Monday. 

Shares of Garden Reach Shipbuilders were down 5.8%, while those of Cochin Shipyard slipped 4.4%. 

Rail Vikas Nigam Limited’s stock fell 6.4% and shares of Railtel plunged 6.5% on Monday. 

Additionally, shares of Vodafone Idea were down for the fifth consecutive trading session on Monday.

The stock has fallen over 7.5% on Monday. 

Vodafone Idea’s stock has slipped 31.74% on a month on month basis, and as much as 46.94% in 2024. 

Shares of NBCC and ITC jump

Shares of NBCC (India) surged more than 6% on Monday after the public sector undertaking trades ex-bonus. 

In August, NBCC had announced that from October 7, shareholders listed in the company’s books as of Monday will be eligible for the bonus share issuance. 

Meanwhile, shares of ITC Limited gained more than 2% on Monday after receiving approval from the National Company Law Tribunal (NCLT)  for the demerger of its hotel business. 

The approval was granted on Friday from the Kolkata bench of the NCLT. 

Investors will be keeping a close eye on the policy meeting of the Reserve Bank of India that commences on Monday. 

The market expects the RBI to maintain the repo rate at 6.5%, marking the 10th consecutive meeting with no change. 

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The European Union has taken legal action against four of its member states—Spain, Cyprus, Poland, and Portugal—over their failure to implement crucial rules regarding global taxation for multinational corporations.

These nations were obligated to enforce specific tax regulations by the end of 2023, aimed at ensuring that large international companies pay a minimum tax rate of 15%.

This action stems from the EU’s efforts to harmonise tax practices across the bloc and close loopholes that allow corporations to shift profits to lower-tax jurisdictions.

The EU’s decision to sue these nations signals the seriousness with which it views this failure to comply.

While Spain has indicated its intention to rectify the situation soon, other countries remain slow to act, leaving them at odds with the EU’s broader efforts to create a fairer tax environment.

What led to the EU’s legal action?

The core issue lies in the failure of Spain, Cyprus, Poland, and Portugal to adopt the EU’s minimum tax directive, which aligns with the OECD’s global initiative.

The directive mandates that multinational corporations pay a minimum 15% tax on profits, ensuring that profits are not unfairly shifted to tax havens.

The rules were supposed to be in place by the end of 2023, and all member states were notified of this deadline.

However, these four countries have missed the deadline, failing to enforce and report the necessary legislative changes.

Spain, for example, has stated that it is already working towards compliance, with new legislation expected by the end of the year.

Despite this assurance, the European Commission’s legal action suggests that progress in Spain and the other countries has not been sufficient, leaving significant gaps in the bloc’s efforts to clamp down on tax avoidance.

What is the EU’s stance on global taxation?

The EU has long been a proponent of creating a level playing field when it comes to corporate taxation, particularly for multinationals.

The bloc has been instrumental in pushing for global tax reforms, working closely with the Organisation for Economic Co-operation and Development (OECD) to create unified tax rules.

The global minimum tax initiative is one of the most significant steps in this direction, designed to prevent companies from exploiting different tax regimes and to ensure that taxes are paid where profits are generated.

The Commission’s lawsuit emphasises the importance of uniform implementation of these rules across the EU.

By failing to adopt these measures, Spain, Cyprus, Poland, and Portugal are seen as undermining the collective goal of preventing tax evasion and ensuring fair competition within the bloc.

The lawsuit serves as a reminder that the EU will hold its member states accountable for their commitments to tax reforms.

What are the potential consequences for the countries involved?

The consequences for Spain, Cyprus, Poland, and Portugal could be severe if they fail to take immediate action to rectify the situation.

The EU has the authority to impose financial penalties and sanctions on member states that fail to comply with its regulations.

This could result in significant fines or other forms of punitive action that would further strain the countries’ relationships with the EU.

Spain’s pledge to enact new legislation by the end of the year may spare it from the harshest penalties, but Cyprus, Poland, and Portugal have not yet presented clear plans for compliance.

This raises concerns about potential delays and the impact on the broader EU tax strategy.

How does this affect multinational corporations?

The ongoing legal battle has significant implications for multinational corporations operating in the affected countries.

Companies that have been benefiting from the absence of a minimum tax may soon face new financial obligations.

The enforcement of the EU’s directive will likely increase their tax burdens, making it harder for them to shift profits to low-tax jurisdictions.

For corporations, the unpredictability of this legal situation may lead to uncertainty, especially for those with substantial operations in Spain, Cyprus, Poland, and Portugal.

What comes next for the EU’s tax reform efforts?

The EU’s decision to sue these four countries shows that it is serious about ensuring compliance with its global tax rules.

In the coming months, the European Commission will likely continue monitoring the situation closely, applying pressure on the nations to enforce the required laws.

If the countries do not take corrective action, the EU could escalate the legal proceedings, potentially resulting in more severe penalties.

The lawsuit also serves as a message to other member states: non-compliance with EU tax rules will not be tolerated.

As the EU continues to push for global tax reform, ensuring that all member states comply with these initiatives is crucial for the bloc’s credibility on the global stage.

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BP has scrapped its commitment to cut oil and gas production as CEO Murray Auchincloss shifts the focus back to traditional energy sources in response to investor demands for improved returns, according to a report by Reuters.

The goal to cut oil and gas production by 40% by 2030 was initially hailed as the most aggressive in the energy sector when it was introduced in 2020.

The move signals a shift in BP’s energy transition strategy under CEO Murray Auchincloss, who took over in January 2024.

Abandoning ambitious 2030 oil and gas output targets

When Auchincloss’ predecessor Bernard Looney introduced the 40% reduction target, BP aimed to significantly reduce carbon emissions and ramp up investments in renewable energy.

However, the company scaled back that target in February 2023 to a 25% reduction by the decade’s end, aligning with broader investor expectations for short-term gains over long-term green ambitions.

Now, BP is turning its attention to boosting oil and gas output through new investments in regions like the Middle East and the Gulf of Mexico.

Since becoming CEO, Auchincloss, formerly BP’s finance chief, has made it clear that his priority is to restore investor confidence by delivering higher returns.

This comes after BP’s share price has consistently underperformed its competitors, raising concerns among investors about the company’s profitability under its current strategy.

In an effort to distance himself from Looney’s approach, Auchincloss is pulling back on some of BP’s energy transition goals to focus on the most profitable businesses—primarily oil and gas.

BP still maintains its longer-term goal of achieving net zero emissions by 2050, but the focus is now on simpler, more targeted strategies. A BP spokesperson said,

“As Murray said at the start of the year… the direction is the same – but we are going to deliver as a simpler, more focused, and higher value company.”

Auchincloss is expected to present his revised strategy, including the removal of the 2030 oil output reduction target, at an investor event in February next year.

While BP’s specific production guidance remains unclear, abandoning this key target indicates a marked shift in the company’s operational priorities.

BP in talks to invest in oil and gas in the Middle East and Gulf of Mexico

BP is pursuing several new oil and gas projects in the Middle East, with sources revealing plans to invest in three major developments in Iraq.

This includes the Majnoon field and a deal with the Iraqi government to develop the Kirkuk oilfield in northern Iraq, a project that will also incorporate the construction of power plants and solar capacity.

The new contracts will reportedly offer BP more favourable profit-sharing terms than previous arrangements.

In addition to the Middle East, BP is ramping up its activity in the Gulf of Mexico, announcing its decision to go ahead with the development of the Kaskida and Tiber fields, both large and complex reservoirs.

The company is also considering acquisitions in the Permian Basin, a key area for onshore US oil production.

This would further expand BP’s presence in the region, where it has already increased its reserves by 2 billion barrels since acquiring assets there in 2019.

Pull back on renewables mirrors industry trend following Ukraine invasion

Despite BP’s continued investment in some low-carbon projects, such as acquiring full ownership of its solar power joint venture Lightsource BP, the company has scaled back its ambitions in renewables.

Auchincloss has paused investments in new offshore wind and biofuel projects and reduced BP’s portfolio of low-carbon hydrogen projects from 30 to 10.

This recalibration of BP’s energy transition efforts comes as rising costs and supply chain disruptions challenge the profitability of renewables.

The shift mirrors actions taken by other industry players, including Shell, whose new CEO Wael Sawan has similarly scaled back on renewable projects in favour of more traditional energy investments following the energy crisis triggered by Russia’s invasion of Ukraine.

As BP faces mounting investor pressure to prioritize near-term profitability, Auchincloss is attempting to strike a balance between maintaining the company’s long-term commitment to net zero emissions and ensuring its short-term financial health.

The company’s strategy recalibration reflects the broader industry’s struggle to navigate the financial challenges posed by the energy transition while continuing to deliver strong shareholder returns.

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In a bid to reshape Pfizer’s future, activist investor Starboard Value has acquired a stake worth approximately $1 billion, according to reports.

The move comes as the pharmaceutical giant faces mounting challenges, including declining demand for its Covid-19 products and increased competition.

Starboard, known for its involvement in strategic shifts at underperforming companies, is expected to push for changes at the New York-based drugmaker.

As of Friday, Pfizer’s market capitalization stood at around $162 billion.

Once a top-performing stock thanks to its role in developing the first Covid-19 vaccine, Pfizer has seen its share price drop by nearly half from its 2021 peak.

Despite this decline, Pfizer’s stock has remained relatively flat this year, in contrast to a 21% rise in the S&P 500.

Former leadership brought in to revamp Pfizer

In its efforts to revamp Pfizer, Starboard has reportedly engaged two former company executives, Ian Read and Frank D’Amelio, who have shown interest in assisting with the investor’s agenda.

Read served as Pfizer’s CEO from 2010 to 2018 and was responsible for appointing the current CEO, Albert Bourla.

D’Amelio held the role of Chief Financial Officer from 2007 to 2021, providing them both with extensive knowledge of the company’s operations and history.

However, the specifics of Starboard’s strategy and discussions with Pfizer remain undisclosed, as per the reports.

Investor pressure on Albert Bourla’s leadership

Pfizer’s CEO, Albert Bourla, has been under increasing pressure from investors as the company grapples with falling sales for its pandemic-related products.

The company misjudged the long-term demand for Covid-19 vaccines and therapeutics once the global health crisis eased, leading to a significant revenue gap.

Despite its groundbreaking success in delivering the Covid-19 vaccine and its antiviral drug, Paxlovid, Pfizer has struggled to sustain the momentum.

The company generated over $100 billion in revenue in 2022, driven by its pandemic products, but demand has since plummeted.

The company’s core portfolio has yet to compensate for the loss, with several key products like the blood thinner Eliquis and arthritis treatment Xeljanz facing looming competition from lower-cost alternatives in the near future.

Adding to Pfizer’s challenges, the company’s initial attempt to develop a weight-loss drug faltered, missing out on the booming market that competitors Eli Lilly and Novo Nordisk have capitalized on.

However, Pfizer is continuing its efforts, advancing a once-daily version of its anti-obesity pill.

Focus shifts to oncology amid Pfizer’s mounting challenges

Pfizer is now betting heavily on its oncology pipeline, particularly after its $43 billion acquisition of biotech company Seagen last year.

Seagen’s cutting-edge cancer therapies, known as antibody-drug conjugates (ADCs), are expected to generate up to $10 billion in annual sales by 2030, according to Pfizer’s projections.

The company has also used its Covid-19 windfall to make other sizable acquisitions, including Arena Pharmaceuticals for $6.7 billion and Biohaven Pharmaceutical for $11.6 billion.

It also spent $5.4 billion on Global Blood Therapeutics, although it recently had to pull all batches of Oxbryta, a sickle-cell treatment it acquired in the deal.

Despite these efforts, some analysts have criticized Pfizer for a perceived lack of focus in its mergers and acquisitions strategy.

Under Ian Read’s leadership, Pfizer was known for narrowing its focus on core areas like vaccines and cancer therapies.

However, Bourla has taken a different approach, significantly ramping up research and development spending while divesting non-core businesses, including its off-patent drug division.

Mixed results and ongoing cost-cutting efforts

Pfizer’s current share price remains below its 2019 level when Bourla first took the helm, signaling investor frustration.

Late last year, the company warned of a potential revenue decline for 2024 and unveiled a $3.5 billion cost-cutting plan to be executed by the end of next year.

In May, the company introduced a new multi-year initiative aimed at further trimming expenses.

In July, Pfizer adjusted its full-year outlook upward, buoyed by newly acquired assets and recent product launches, which helped offset the decline in sales of its Covid-19 vaccine, Comirnaty.

“We are progressing on all cylinders,” Bourla told The Wall Street Journal in an interview in July.

Starboard’s record in pharma and beyond

Starboard, helmed by Jeff Smith, has a long history of driving strategic change across various industries, particularly in the technology sector.

The firm’s previous attempts to shake up the pharmaceutical industry include its unsuccessful effort in 2019 to block Bristol-Myers Squibb’s $74 billion acquisition of rival Celgene.

Starboard has also secured board seats at healthcare-technology company Cerner.

Now, with its sizable investment in Pfizer, Starboard is poised to influence the direction of one of the world’s largest drugmakers, potentially reshaping its future in a rapidly evolving pharmaceutical landscape.

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