Brief World Markets News Headlines of the day

Top Stories

U.S. leading indicators, housing, jobs data all point down

The U.S. index of leading economic indicators was down 0.3% in June, pointing to slow growth and taking back most of the gain reported the previous month. Meanwhile, sales of existing homes were down 5.4% for the month, while weekly jobless claims climbed an unexpectedly sharp 34,000 in the week ended July 14. 

Economists see slow growth globally in 2013

A Reuters poll of international economists projects continuing problems in Europe slowing growth globally well into next year. In Asia, the economists predict a sluggish rebound for the region's major economies

Spanish bailout wins German approval; Spain's borrowing costs rise

German lawmakers approved a crucial eurozone bailout of Spanish banks after the Merkel government assured them of strict oversight of the rescue. The aid would provide as much as 100 billion euros to help recapitalize Spanish banks. Meanwhile, Spain's borrowing costs continued to climb as interest on long-term bonds moved beyond the 7% threshold.

IMF urges quick action in U.K. to avoid long-term economic damage

More urgent measures are required from the U.K. government and the Bank of England if the nation's economy is to avoid permanent damage from the current downturn, the International Monetary Fund advised. Persistent weakness in the economy was confirmed by retail-sales figures for June, which were up 0.1% from May, much less than expected. 

Lending from top Chinese banks is off to fast start in July

Lending by China's four leading banks in the first half of July was about double the pace for the month-earlier period, according to the Shanghai Securities News. The four banks -- Industrial & Commercial Bank of China, the Agricultural Bank of China, China Construction Bank and Bank of China -- often account for as much as half of all new loans. 

Libor may be scrapped when central bankers meet

The London interbank offered rate may be discarded when central bankers meet in September. The recent manipulation scandal has raised fundamental questions about the rate, making it "very clear that radical reforms of the Libor system are needed," said the Bank of England's governor, Mervyn King.

U.S. drought pushes corn, soybean prices to records

Corn futures prices breached $8 a bushel for the first time Thursday, and soybeans also were at record levels as drought continued to grip U.S. cropland. 

Profit drops sharply at Morgan Stanley

Partly due to pressure from a recent ratings downgrade by Moody's and a loss of market share, Morgan Stanley posted a sharp 54% drop in profit for the second quarter. The results may raise questions about the bank's recent strategy to focus on client business rather than proprietary trading. 

Market Activities

Strong outlooks for the tech shares of IBM, eBay and Qualcomm shifted investors' focus away from weak economic data and boosted the U.S. market Thursday, with the S&P 500 ending the day 0.27% higher. In Europe, strong earnings reports also helped buoy markets. Here is a list of continuously updated global stock indices. 

Economic Trends & Outlook
Business outlook, conditions turn down in Australia

A quarterly survey found a gloomier outlook among Australian businesses as business conditions also were rated lower. The National Australia Bank index, which assesses expectations for the coming three months, was down 1 point to minus-2, below the level just before the financial crisis struck. Conditions fell more sharply, to a minus-1 from a plus-3.

Banks, rating agencies aren't optimistic for 2nd half in South Korea

Parting from upbeat South Korean government forecasts for the second half, credit rating agencies and investment banks see subdued growth in the months ahead. Global markets are one obvious reason, but so are rising levels of household and public debt. "The rate of Korea's indebtedness to its disposable income has been rising," noted one S&P official, adding that a "worsening labor market condition means rising household debts." 

New forecast pegs Taiwan's 2012 growth below 2%

Taiwan's economic growth is unlikely to reach 2% this year, according to Academia Sinica's Institute of Economics. The institute's new forecast of 1.94% growth is the lowest yet but follows a series of recent downgrades by other institutions. 

Hong Kong jobless rate holds at 3.2% in latest quarter

Hong Kong's unemployment rate held at 3.2% for the three months ended in June, the Census and Statistics Department reported. Economists had expected a higher reading and warned that the rate could still rise due to the global slowdown. 

Capital Markets & Financial Products
China further opens defense industry to private investors

Private investors on the Chinese mainland will soon have more opportunities to invest in the country's defense industry under new guidelines from the government's defense industry supervisor and the military. The new rules are designed to allow equal treatment for private investors and state-owned military enterprises in a number of areas, including licensing and taxation. 

Seoul sees first-half jump in foreign direct investment

South Korea's capital saw a 56.6% surge in foreign direct investment to nearly $3 billion in the first half. Fueling the inflow were the manufacturing sector and investment from Japan as well as the rest of Asia, which nearly doubled to $1.73 billion. 

Taiwan is advised to help lenders by allowing covered bonds

Taiwan should join others in the Asia-Pacific region in introducing laws for the sale of covered bonds to aid lenders in raising funds as riskier assets fall into disfavor, Standard & Poor's advises. Australia and New Zealand lead in offering the instruments, which are backed by mortgage loans or other bank assets. 

Malaysia works to win a surge in tech business

With China's labor market stretched and floods and tsunamis reminding companies of the dangers of concentrating too much production in one area, Malaysia and Penang are seeing a boom in high-tech manufacturing. But the government has also taken steps to make doing business easier. "We had fallen off the radar screen, so we went back to the drawing board," said Penang's leader, Chief Minister Lim Guan Eng. 

China needs to prepare for change in financial system

Though China may rightly conclude that the hapless West has little to teach it about finance, the country is rapidly outgrowing the system it has. 

Industry & Regulatory Update
Indonesia cracks down on dumping of foreign goods

Indonesia wants to speed up its reaction to low-price imports dumped on its markets. Late last year, the government created a special agency to handle dumping complaints. Now it is asking businesses to report the practice as soon as they suspect dumping instead of waiting until they actually suffer losses in the marketplace. 

Ethics & Standards
Indian staff is under scrutiny in investigation of HSBC

Reviewers in India are among those facing scrutiny over HSBC's failure to fully comply with measures intended to prevent money-laundering and terror financing. India's Finance Ministry is assisting the central bank in examining the Indian personnel's role and the quality of their work. A U.S. Senate investigation found that HSBC's Anti-Money Laundering Compliance Department, which included employees in India, was understaffed. 

South Korean banks may face heavy fines in CD rate fixing

Fines totaling $87.8 million might be in store for South Korea's leading banks suspected of colluding to fix interest rates for certificates of deposit. Separately, sources said one brokerage accused in the scandal has admitted its role.
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