Markets in Asia advanced, after the US S&P index closed up 4.3 per cent on speculation bond insurers will receive financial assistance. The retreat in the oil price and other commodities also helped improve sentiment. The MSCI Asia Pacific Index was set for its first weekly rise since August, with a 0.6 per cent rise in late Tokyo trade, as money market rates moved lower. Japan's Nikkei climbed 1.3 per cent contributing to a weekly rise of 4.5 per cent. European markets were cheered by the moves, with the FTSE 100 opening over four per cent ahead. Citigroup and Merrill Lynch, two of the financial institutions that have already been beneficiaries of emergency US government lending, have reported further losses, reported the Independent. Their combined credit losses are now $100bn, it was announced, and Citibank has been forced to "nearly double" the amount of money it is setting aside to cover consumer and corporate losses. The problems are being seen as a sign that financial pain is now spreading beyond investment banking into the real economy. The Financial Services Authority has admitted that it is in talks with the insurers about their solvency requirements, as the financial crisis spreads into the industry, reported the Daily Telegraph. Two of the UK's biggest insurers - Prudential and Aviva - have said that their financial strength is strong, but that didn’t stop shares in the Pru falling nearly 20 per cent yesterday, indicating investors’ increasing concerns. The company reports third-quarter results next Tuesday, but has already said it has no need for a rights issue. Google told investors that third-quarter profits rose more than 25 per cent, with net income at £1.35bn from $1.07bn a year earlier, beating analysts' expectations. One of the biggest factors behind the increase was the move by advertisers away from television and print towards the internet and adverts that target online shoppers. Total sales were up to $5.54bn at the search engine giant. Its shares jumped $36.98, an increase of 10 per cent, in extended after-hours trading, but are still 49 per cent lower this year. Hedge funds around the world are in the grip of a "vicious selling cycle", with some of the best known being forced to shut down, reported theFinancial Times. On Thursday Highland Capital Management announced that it was shutting two of its funds and TPG-Axon, with $16bn under management, told investors that it was 26 per cent down at the end of September. Citadel too said it was down 26-30 per cent in early October after a September that ranked as "the worst month in its history". Citadel manages $18bn. A consortium of Japanese and Korean steelmakers is "poised" to swoop on one of Brazil's largest iron ore miners, Nacional Minerios, reported theTimes. The purchase of the 40 per cent stake, set to be announced later today, takes advantage of current market turmoil and gives the steel companies access to raw materials that had been rising dramatically in price. The group is thought to include Nippon Steel and Itochu of Japan, Korean steel company Posco and other Japanese smelting companies. The global efforts by governments around the world to unblock the money markets with huge injections of liquidity, are beginning to “bear fruit”, said the Financial Times. The London interbank offered rate fell for the fourth day in a row, and commercial paper yields are down too………… John Lewis reported another “steep slide” in sales this morning, as consumers increasingly stay away, said the Times. In the week to October 11th, the retailer reported a 4.8 per cent year on year collapse in sales at its 27 department stores. Total sales including supermarkets were down 2.2 per cent………… Shares in Travis Perkins fell by more than a third yesterday after it released a profits warning, said the Independent. The builders’ merchant saw a “dramatic” slump at its outlets, as a result of which it will have to scrap its dividend and make make staff redundant………… Oil producers’ cartel Opec has convened an emergency meeting for next week after the oil price continued to slide. The price has now hit $70, less than half the record level of $146 in July, and the meeting is seen as a forum to explore options to stem the decline………… Inchcape, the car dealer with franchises for BMW, Mercedes andToyota, is set to make £55m savings from cost-cutting, said the Times. The “main impact” at the company, which employs 17,000 people in 26 countries, will be in the UK, which accounts for 40 per cent of its turnover………… Germany has said it is not planning to give state support to its struggling auto industry. In an interview with Finance Minister Peer Steinbrueck, he indicated that a bail-out was not in the pipeline and tax breaks were also not a likelihood. Car sales in Europe fell 8.2 per cent in September…………business headlines.........
Markets stage late recovery
The danger of a banker with a power complex 
New writedowns for US financials
Neither Obama or McCain offer any hope
America is in the grip of a new Depression Insurers feel pain of weak markets
Peregrine Worsthorne: Financial hacks are as much to blame as the bankers Google results beat estimates
Google phone reviewed
Google enters the 'Browser Wars' Hedge funds continue to suffer
Cash was king - now gold is God Asians make $4bn swoop on miner
People: Mittal loses half his fortune ...in brief..................
Liquidity working and Germany not to support automakers
Book review: Russia reborn with oil wealth
Friday, 17 October 2008
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