#UK #construction at 6.5 year #high; #Asian #markets #slide - #business #live #Fears over #emerging #markets, the #US #economy, and the #prospect of another #debt #ceiling #battle in #Washington all #hit #shares #hard in Asia • UK construction #activity #jumps • #Nikkei #falls 4.2%, #HongKong market in #correction territory • #WallStreet opens a little higher after Mondays rout Graeme Wearden Graeme Wearden theguardian, Tuesday 4 February 2014 11.39 EST Jump to comments (…) Print this A man reacts to a gust of wind as it starts to snow in front of an electronic stock board at a securities firm in Tokyo Tuesday, Feb. 4, 2014. A man reacts to a gust of wind as it starts to snow in front of an electronic stock board at a securities firm in Tokyo, where the Nikkei fell another 4.2% today. Photograph: Koji Sasahara/AP 4.32pm GMT Haldane: EM turbulence caused by countries pushing individual policies Andrew Haldane, executive director for financial stability at the Bank of England, pauses during an interview in London, U.K., on Tuesday, June 14, 2011. Andrew Haldane, executive director for financial stability at the Bank of England. Photograph: Bloomberg via Getty Images Andy Haldane, one of the Bank of Englands brightest and most senior officials, has waded into the emerging markets turbulence by warning that certain countries are pursuing individual policies rather than caring about the wider financial system. In a speech delivered in Oxford this afternoon, Haldane said leaders and policymakers had failed to co-ordinate policies in a better way. Reuters is there, and reports: Turmoil in some emerging markets reflects a failure of advanced and developing economies to learn from the financial crisis and coordinate economic policies in a better way, a senior Bank of England official said on Tuesday. Individual countries act in their own best interests without taking into account the broader best interest of the financial system as a whole, said Andy Haldane, the BoEs executive director for financial stability. What is going on with the head-to-head combat is people pursuing policies of individual countries, Haldane said in a speech at the University of Oxford.What is at stake is the system as a whole, he added. The comments come just a few days after Indias central bank chief, Raghuram Rajan, said international monetary co-operation has broken down as the Federal Reserve tapered, or slowed, its bond-buying stimulus programme - despite the recent upheaval in emerging markets Haldanes comments are being interpreted as an nudge to the Federal Reserve too: BoEs Haldane says Fed Spillover is dramatic and continues today. — DailyFXTeamMember (@DailyFXTeam) February 4, 2014 .@livesquawk @CMCMFIN Mr Haldanes remarks will surely fall on deaf ears in Washington! — Alastair Winter (@AlastairWinter) February 4, 2014 BANK OF ENGLANDS HALDANE SAYS INDIVIDUAL COUNTRIES NOT ACTING IN BEST INTEREST OF FINANCIAL SYSTEM AS A WHOLE // Thought UK/US were allies? — MineForNothing (@minefornothing) February 4, 2014 4.29pm GMT Look whos back -- Stephen Hester, the former chief executive of Royal Bank of Scotland, has just been appointed as the new CEO of insurance group RSA. Hell succeed Simon Lee, who quit in December as the insurer posted its third profit warning. Running RSA will be a challenge, given the recent discovery of problems at its Irish division. But I guess itll be less hassle than cleaning up Fred Goodwins mess, being lambasted by the media over the Libor scandal and PPI misselling, and apologising for RBSs tech problems. Hester might even get to keep a few bonuses, having surrendered most of his during his time at RBS.... Stephen Hester ex RBS boss off to RSA as CEO — Jill Treanor (@jilltreanor) February 4, 2014 4.01pm GMT A couple more interesting points from George Osborne -- asked whether the UK recovery is sustainable, he told the Lords economics committee that potential risks include the weakness of some eurozone countries, adding that some US economic data in the last couple of weeks has been a little bit soft. The chancellor added that its also worth having on ones radar the problems in some emerging markets, as a problem in an emerging market can cause ructions in other parts of the financial system. Osborne also indicated he had little time for the secular stagnation theory being pushed by former US Treasury secretary Larry Summers (with whom Osborne had an entertaining dust-up at Davos). #Osborne on secular stagnation: Summers too pessimistic, a not surprising verdict given that Summers is amongst Os biggest critics — jeremy warner (@JeremyWarnerUK) February 4, 2014 Updated at 4.01pm GMT 3.36pm GMT George Osborne at Lords economic affairs committee George Osborne at Lords economic affairs committee Photograph: /Parliamentlive.tv UK chancellor, George Osborne, is being questioned by the House of Lords economic affairs committee now -- hes started by telling their lordships that Britain is leading Europe on shale gas, and denying that the government isnt showing leadership over the issue. Its being streamed live here. Our politics liveblogger Andrew Sparrow is tracking all the action here: George Osborne questioned by Lords economic affairs committee: Politics live blog Heres a flavour: Q: If shale drilling takes off, will that have an impact on gas prices? Osborne says he thinks it will have some impact. But it wont be as dramatic in the US, he suggests. He says the gas market in the UK is more open, and so the gas price in the UK tracks the world price. But if the gas price overall came down, Britain would benefit. Updated at 4.39pm GMT 3.16pm GMT Microsoft appoints Satya Nadella to replace Steve Ballmer as CEO t.co/tn4p3B9wEa @GuardianUS @guardiantech — The Guardian (@guardian) February 4, 2014 3.11pm GMT Just in -- US factory orders fell by 1.5% in December, which is actually a better result than expected. The decline was mostly due to a big drop in transportation orders - strip that out and orders were up by 0.2%, which may calm fears of a US slowdown (although no promises!) Factory orders fall 1.5% in December vs. expectations for a 1.7% decline: t.co/vvk3EOFR8N — CNBC (@CNBC) February 4, 2014 Shares moved a little higher on the news, with the FTSE 100 now up 8 points and the Dow Jones 60 points higher, or 0.4%. 3.01pm GMT Reuters correspondent Blaise Robinson reports that the emerging market wobbles have made some investors appreciate the virtues of good old Europe: The EM crisis is a reminder that boring old Europe is actually pretty good place to be invested in -Henderson GIs Ollie Beckett,in Paris — Blaise Robinson (@blaiserobinson) February 4, 2014 2.59pm GMT Over on Wall Street, shares are inching higher in early trading as investors try to put yesterdays heavy selloff behind them. The Dow Jones index is up 39 points at 15413, +0.3%, with the other indices also slightly higher. Hardly a bounce-back, though after the biggest one-day fall in seven months -- investors may be sitting tight having seen the Asian selloff earlier today, where the Nikkei slumped 4.2% and the Hang Seng fell over 2% into an official correction (10% off its recent peak). The business district in Tokyo, where snow fell as the Nikkei stock average fell 4.2 percent to a four-month low. The business district in Tokyo, where snow fell as the Nikkei stock average fell 4.2 percent to a four-month low. Photograph: Toru Hanai/REUTERS 2.52pm GMT New Microsoft boss takes Wilde swing This handout image provided by Microsoft on February 4, 2014 shows the new CEO Satya Nadella. Satya Nadella. Photograph: HO/AFP/Getty Images Microsofts new chief executive, Satya Nadella, wins instant brownie points by quoting Oscar Wilde (sort of), in his letter to staff this morning Heres a flavour: What do we do next? To paraphrase a quote from Oscar Wilde — we need to believe in the impossible and remove the improbable. This starts with clarity of purpose and sense of mission that will lead us to imagine the impossible and deliver it. We need to prioritize innovation that is centered on our core value of empowering users and organizations to “do more.” We have picked a set of high-value activities as part of our One Microsoft strategy. And with every service and device launch going forward we need to bring more innovation to bear around these scenarios. Next, every one of us needs to do our best work, lead and help drive cultural change. We sometimes underestimate what we each can do to make things happen and overestimate what others need to do to move us forward. We must change this. Finally, I truly believe that each of us must find meaning in our work. The best work happens when you know that its not just work, but something that will improve other peoples lives. This is the opportunity that drives each of us at this company. Many companies aspire to change the world. But very few have all the elements required: talent, resources, and perseverance. Microsoft has proven that it has all three in abundance. And as the new CEO, I can’t ask for a better foundation. [end] • - the actual Wilde quote is Man can believe the impossible, but man can never believe the improbable (see Collins Dictionary).... ....Not to be confused with Conan Doyles Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth. Updated at 3.13pm GMT 2.25pm GMT Satya Nadella becomes Microsoft CEO The long search for Microsofts next chief executive is over - with the software giant announcing that (as rumoured) Satya Nadella will take the helm. Nadella had been running Microsofts cloud and enterprise computing division, and will succeed Steve Ballmer to become only the third CEO in the companys history. In another switch, Bill Gates is shifting from the chairmans role to become technology advisor -- meaning hell spend more time with the companys staff. Nadella faces a tough task, given Microsofts loss of influence as the technology world in the post-PC world. In a video message, Gates said Nadella is the tough leader the company needs. Bill Gates welcoming Satya Nadella as Microsofts next CEO In it, Gates declares that The opportunity for Microsoft is greater than ever before, from making Office more interactive to perhaps building a new Cloud platform to connect to all sorts of different devices. 2.09pm GMT Speaking of the Anglo Irish Bank trial, here is a mural of the busted financial institutions uncompleted HQ that never was, down in Dublins docklands. Anglo Bank graffiti in Dublin Photograph: Sean ONeil The painting comes complete with images of the tapes that recorded some Anglo executives laughing, joking and even singing about how Irish and German taxpayers were going to rescue themselves and their bank from the abyss. This anti-Anglo Irish Bank image close to the iconic Hapenny Bridge on the river Liffey is a 15 minute stroll north towards the criminal courthouse where some of the other Anglo Irish executives stand trial tomorrow morning (from Sean ONeil and Henry McDonald). 1.51pm GMT The price of Brent crude oil has dropped through the trading session, as this weeks disappointing US and Chinese manufacturing surveys suggested weaker demand for energy. Brent is currently down 0.4 of a cent per barrel at $105.6. Updated at 1.51pm GMT 1.40pm GMT BP sounds alarm on Scottish vote After reporting falling profits this morning, BP has also waded into the issue of Scottish independence by warning that the issue raises big uncertainties. Speaking to the BBC this morning, Bob Dudley said he was concerned by the question mark over whether an independent Scotland would keep the pound. He said: We have a lot of people in Scotland. We have a lot of investments in Scotland. My personal view is that Great Britain is great and it ought to stay together. Last week, Bank of England governor Mark Carney warned that an independent Scotland would have to give up some control over fiscal policies if it wanted to keep using sterling. Updated at 1.51pm GMT 1.24pm GMT Sean Quinn outside Belfast High Court, where a judge ruled that the former billionaire was not entitled to file for bankruptcy in Northern Ireland. Sean Quinn, in 2012. Photograph: Paul Faith/PA Over in Ireland, a petrol bomb attack was launched at the company once run by the countrys former richest man, Sean Quinn, last night - a day before the start of a huge trial into the collapse of Anglo Irish Bank. The attack brought down telephone and broadband links around the headquarters in County Fermanagh, cutting of around 200 people (theres a photo here). Our Ireland correspondent, Henry McDonald, reports: Irelands one-time richest man Sean Quinn is one of 800 people who is scheduled to give evidence in Dublin at one of the biggest financial crime trials in European history. Ex-billionaire Quinn became bankrupt after borrowing billions from the now defunct Anglo Irish Bank when he started to play the global property casino. Quinns gamble spectacularly backfired after the world property crash left him owing billions and resulted in him losing control of his other businesses. The case against three senior Anglo Irish Bank executives begins on Wednesday morning at Dublins Central Criminal Court and could last up to six months (heres our preview) Ahead of what will eventually be a momentous day when Sean Quinn finally gets called to the witness box, the former tycoon has other worries today about his old business base in Co.Fermanagh. Two petrol bombs were thrown close to the headquarters of the former Quinn family business on the Ballyconnell Road in Derrylin close to the border with the Irish Republic. The damage done last night has cut off phone and broadband coverage in the rural area where Quinn was once king. The petrol bomb attack is the latest in a string of incidents where properties belonging to the Quinn family were damaged. Last month, a bus was set on fire at the entrance to three of its businesses in Rakeelan, Ballyconnell, across the border in County Cavan. In December, a fuel tanker was set on fire after being driven into the former headquarters of the Quinn Group in County Fermanagh, Northern Ireland. It was renamed Aventas last November. HMcD Updated at 1.27pm GMT 12.47pm GMT Cuadrillas exploratory rig drilling for shale gas at Banks in Lancashire, back in 2011. Cuadrillas exploratory rig drilling for shale gas at Banks in Lancashire, back in 2011. Photograph: CHRISTOPHER THOMOND/Guardian. Two small earth tremors in 2011 havent deterred shale gas firm Cuadrilla with pushing on with its fracking activities in the picturesque Lancashire countryside. Cuadrilla announced this morning it would dig up to eight wells at two sites in the county - at Roseacre Wood, near Elswick, and to the west of the delightfully named village of Little Plumpton. From our environment desk, Adam Vaughan reports that Cuadrilla is promising to be a good neighbour as it blasts the bedrock with high-pressure fluids to release gas. However, Friends of the Earths north-west campaigner, Helen Rimmer, said: These plans will be met by stiff opposition from local people rightly concerned about having the UKs first attempted multiple-well fracking operation under their feet. Cuadrilla claims to be a good neighbour, but it still hasnt cleared up the mess from the botched fracking operation that caused earth tremors only a few miles from one of the proposed sites. 12.27pm GMT Here are the key quotes from the FCAs Martin Wheatley to MPs this morning, on its investigation into allegations that foreign exchange rates have been rigged by traders: I would be surprised if we got to conclusions within this year. I hope that we will next year. We are still in the investigation phase ... The allegations are every bit as bad as they have been with Libor, 12.18pm GMT FCA: FX rigging every bit as bad as Libor Back in parliament the head of the City watchdog, Martin Wheatley, has told MPs that claims that foreign exchange traders collaborated to fix currency bench markets are just as serious as the Libor rate-rigging scandal. Wheatley said the Financial Conduct Authority was taking allegation of FX benchmark-rigging very seriously, calling them every bit as bad as the Libor affair. He said the allegations had cast doubt on the reliability of foreign exchange rates, and also said the regulator is probing other benchmarks..... However, he wouldnt give clear details about how the FCA investigation was proceeding -- and indicated we might not get results until 2015, or even later. FCA CEO Wheatley says there are other benchmarks the watchdog is investigating after people raised concerns. Refuses to say which ones. — Sean Farrell (@farrell_s) February 4, 2014 FSA CEO Wheatley says people wont trust the way FX rates are fixed after allegations that have come out. — Sean Farrell (@farrell_s) February 4, 2014 FCA CEO Wheatley says FX investigation unlikely to report this year. Hopes to report next year but very hard to predict. — Sean Farrell (@farrell_s) February 4, 2014 Many major banks have suspended foreign exchange traders since the news broke last autumn that the daily fixes (which determine the official exchange rate between currencies) could have been manipulated. HSBC and Citigroup both suspended traders last month. 12.02pm GMT Investor studies share prices during the morning trading at a private stock market gallery in Kuala Lumpur, Malaysia, Tuesday, Feb. 4, 2014. Investor studying share prices during morning trading at a private stock market gallery in Kuala Lumpur, Malaysia, today. Photograph: Daniel Chan/AP After yesterdays 326-point tumble, the Dow Jones industrial average is expected to stagger back off the mat with a small rise when trading resumes later today. David Madden, market analyst at IG, says the Asian tumble and the prospect of another US debt ceiling fight continues to cast a shadow over the City. Stocks are offside, but holding up relatively well considering the massive selloff in Japan overnight as fears over emerging-market exposure echoed around the world. Traders are treading lightly, not wanting to get stung if there is a sudden exodus from equities into cash or bonds. The US debt-ceiling deadline is approaching again and, as on the past two occasions, dealers are anticipating downgrade speculation and a slide in stocks. BP is still suffering from the Gulf of Mexico disaster, and the oil titans asset-stripping programme may be topping up the compensation pool but is it is taking its toll on production levels. Ocados deal with Morrisons helped to increase the formers revenue, but was not enough to stop it delivering a loss for 2013. The FTSE 100 is currently down 27 points, but there are deeper losses in Germany where the DAX has dropped 100 points, or 1.1%. 11.11am GMT The Treasury Select Committee is grilling the Financial Conduct Authoritys John Griffith-Jones and Martin Wheatley about the regulators performance since taking over from the FSA. My colleague Sean Farrell is following events: Treasury cttee chair Andrew Tyrie not convinced of FCA enthusiasm for reforming sales-based pay at banks. Wheatley says takes it seriously. — Sean Farrell (@farrell_s) February 4, 2014 FSA CEO Wheatley says sounds disproportionate to extend EU bonus cap beyond cap to entire financial industry. — Sean Farrell (@farrell_s) February 4, 2014 FSA CEO Wheatley says FCA will consult later this year on whether its remuneration code needs to be extended. — Sean Farrell (@farrell_s) February 4, 2014 FSA CEO Wheatley says was quite surprising that lessons hadnt been learnt by Lloyds when FCA imposed £28m fine last year. — Sean Farrell (@farrell_s) February 4, 2014 Mark Garnier MP accuses FCA CEO Wheatley of postmodern Nuremberg defence for Lloyds sales staff: I was only obeying bonus incentives. — Sean Farrell (@farrell_s) February 4, 2014 Very long to and fro between Tyrie and Wheatley on if a product that requires advice can be sold on the web without human intervention. — Sean Farrell (@farrell_s) February 4, 2014 FSA CEO Wheatley says will check on execution of retail distribution review by the end of this year. — Sean Farrell (@farrell_s) February 4, 2014 FSA CEO Wheatley says Lloyds bonuses should be cut over £28m fine last year. Not just sales staff but managers who set incentives. — Sean Farrell (@farrell_s) February 4, 2014 FSA CEO Wheatley says Rev Paul Flowers wouldnt get Co-op bank chair job now. Processes have been changed. — Sean Farrell (@farrell_s) February 4, 2014 FSAs Wheatley agrees with John Mann no other industry has had comparable level of quantifiable wrongdoing to that of financial services — Sean Farrell (@farrell_s) February 4, 2014 Updated at 11.35am GMT 10.50am GMT Greek government to push Swiss over tax evasion Protests outside Greek finance minister, February 4th 2014 Protests outside the Greek finance ministry in Athens today. Photograph: Helena Smith Greek cleaning staff are protesting outside the finance ministry in Athens today ahead of a meeting with Switzerlands finance minister to discuss tax evasion. The Greek government is hoping to recover some of the estimated $42bn hidden in Swiss bank accounts by Greek citizens, our Athens correspondent, Helena Smith, reports. Greek finance minister Yannis Stournaras and his Swiss counterpart, Eveline Widmer-Schlumpf are expected to give a press conference later, and tax evasion will be on the agenda. Greek newspaper Kathimerini has more details: Widmer-Schlumpf said on January 25 in Davos that she will discuss Greek assets held with Swiss banks at Tuesday’s meeting. Talks on the issue have stalled since 2012 and progress toward an agreement would provide a boost for the Greek government. “If this were achieved, it would be a gesture that shows the government wants to move toward a catharsis,” said George Tzogopoulos, a research fellow at the Athens-based Hellenic Foundation for European & Foreign Policy. “For public opinion, tax evasion continues to be a problem. An agreement would show that it is determined to deal with the problem.” Updated at 11.34am GMT 10.21am GMT The strong UK construction data sent the pound rallying, up 0.4 of a cent against the US dollar at 1.634. It also sparked a small revival in the City, with the FTSE 100 now down just 8 points at 6457. Upmarket grocery chain Ocado remains a big faller, though, down 4.5% after reporting yet another pre-tax loss of £12.5m, and announcing that one of its founders, Jason Gissing, is leaving. Heres the story: Ocado founder to leave this year amid rising sales My colleague Sean Farrell tweeted the highlights of Ocados morning conference call too: Ocados Tim Steiner says Jason Gissing resigned and he will be paid up to when he leaves and thats it. No funny money for the boys. — Sean Farrell (@farrell_s) February 4, 2014 Ocados Tim Steiner says talking to lots of retailers round the world but nothing imminent. Important to make sure Morrisons contract works. — Sean Farrell (@farrell_s) February 4, 2014 Ocados Steiner says analysts expect a profit this year. If you take them as good analysts then we should break into profit this year. — Sean Farrell (@farrell_s) February 4, 2014 10.18am GMT Jeremy Cook of World First also flags up the warning that building firms may struggle to get their hands on supplies; Suppliers cannot fill demand as quickly as they get it, which could lead to a rise in costs. For now we will look at it as a natural brake on output. Updated at 10.23am GMT 10.02am GMT CIPS: More pressure on construction suppliers As that earlier graph showed, all three areas of construction reported a strong January. House building remains the hottest area, though -- with growth at the highest level in a decade years. David Noble, chief executive officer at the Chartered Institute of Purchasing & Supply, says construction started 2014 in formidable fashion. Hes worried, though, that the building industrys supply chain could be stretched... The one area which is beginning to be a concern is the ongoing pressure on suppliers to meet the rush in demand. As the industry’s lifeblood, suppliers are still recovering from the recession, and until they get back to full capacity, the continued lengthening of delivery times may become a restraining force on the sector in the coming months.” Our economics reporter, Katie Allen, wrote last month that British brickmakers are working flat-out to meet orders as the construction recovery picks up. Its a great read: UK brickmakers straining to meet rising demand Martin Warner is standing on a pile of nearly one and a half million bricks, stacked several metres high in a vast open shed. Below him pipes of natural gas pump flames into the stack, lighting a fire that will burn day and night for 17 days to bake the bricks at 1080 degrees Celsius, sending the stench of sulphur into the air in billows of steam. When the whole shed has been set alight, the glowing bricks are left to cool off for a further two weeks. The gas flames are moved on to the next shed, where more green bricks, moulded from clay are being stacked ready to be fired..... 9.43am GMT UK construction activity hits six and a half-year high UK construction PMI to January 2014 Photograph: Markit Activity in the UK construction sector in January has smashed forecasts by growing at its fastest rate since before the financial crisis began, a survey just released shows. In a sign that the British economic recovery continues, data firm Markits monthly PMI jumped to 64.6 last month, driven by a surge in new work - up from Decembers 62.1. That shows strong growth, and is the most rapid monthly expansion since August 2007 - the month before the credit crunch struck. Markit reported that construction firms hired more workers during January, for the eighth month running. It also flagged up anecdotal evidence that the recent economic recovery, and greater access to finance among clients had led to more new business. Confidence about the year-ahead outlook was the most positive since September 2009, it added. All the sub-sectors of construction - house-building, commercial property construction, and civil engineering - all saw rising activity, as this graph shows: UK construction PMI to January 2014, by sector UK construction PMI to January 2014, by sector Photograph: /Markit Last weeks GDP data had shown that the UK construction sector shrank slightly in the final three months of 2013. This survey may show that activity bounced back in January. Tim Moore, Markit Economist, said the survey provides reassurance that the UK construction recovery remains on track. The latest data show positive developments on a number of fronts, with job creation rebounding at the start of the year while output and new business growth was the fastest since the summer of 2007. Housing activity growth now stands at its strongest for just over a decade, boosted by growing demand for new homes and improving confidence within the UK property market. Meanwhile, strengthening domestic economic conditions spurred greater spending on commercial projects in January. A sharp rise in civil engineering activity completed an impressive showing from all three sub-categories of construction monitored by the survey. Updated at 9.43am GMT 9.29am GMT Deepwater Horizon disaster costs keep rising In the corporate world, BP has hiked the total cost of its 2011 Deepwater Horizon oil spill by another $200m, to $42.7bn. But as energy editor Terry Macalister reports, the full bill could be even higher: The latest tally does not take account of additional provisions for economic loss claims from a further legal settlement it has made, the group said. BP is also waiting for a final US court decision over whether it was considered grossly negligent for the Deepwater Horizon accident. That could add over $20bn to the final bill because it would bring cash penalties under the Clean Water Act. Eleven workers were killed when the Deepwater Horizon rig caught fire in the Gulf of Mexico in April 2011, triggering a catastrophic oil leak which caused one of Americas worst environmental disasters. BPs Deepwater Horizon bill rises $200m as profits fall 9.17am GMT Overnight, the Reserve Bank of Australia became the latest central bank to tweak its monetary stance. While the RBA voted to leave interest rates unchanged at 2.5%, it dropped its previous suggestions that it might ease policy in future months (ie cut rates). Todays statement said the most prudent course is likely to be a period of stability in interest rates. The RBA also dropped its previous warning that the Australian dollar was uncomfortably high, which had also been seen as hinting at a cut in borrowing costs. More here: Reserve Bank of Australia holds interest rates steady 8.58am GMT Hang Seng sinks into correction territory A stock trader monitors transactions during the first trading day of the Lunar New Year at the Hong Kong Exchanges and Clearings Limited in Hong Kong, China, 04 February 2014. A stock trader at the Hong Kong Exchange today. Photograph: JEROME FAVRE/EPA Hong Kongs Hang Seng index has followed the Nikkei into correction territory today, after tumbling by almost 2.9% in its biggest daily selloff in 18 months. Investors hit the sell button with gusto on their first day back after the Lunar New Year holiday, wiping 637 points off the Hang Seng. This means the index has dropped more than 10% since its recent peak on 2nd December, the official definition of a correction (the Nikkei got there yesterday) Asian markets are mostly bathed in red today as this screengrab shows: Asian stock markets, February 4 2014 Photograph: /Thomson Reuters Asian investors have been spooked by the latest economic surveys from China, which showed a slowdown in January: Michael Every, head of financial markets research for Asia-Pacific at Rabobank, comments: True, there are distortions related to the timing of Lunar New Year, and a pollution and corruption crackdown by Beijing, but the message is still that we are seeing slower growth. Updated at 10.52am GMT 8.37am GMT Spanish unemployment data Spains unemployment total has risen again, but the countrys government insists that the situation is improving. The number of people out of work rose by 113,097 in January, ending three months of declines, pushing the total out of work to 4,814,43. That dashed hopes of another fall - but the Labour ministry points out that unemployment invariably goes up in January. And on a seasonally adjusted terms, Spanish unemployment did decrease by 3,907 people in January. This is the sixth consecutive monthly fall in the seasonally-adjusted total , for the first time since 2007. Spains secretary of state for employment, Engracia Hidalgo, says in this statement that the data confirms that Spains labour market is stabilizing. Updated at 8.37am GMT 8.13am GMT ARM pulls down FTSE 100 European stock markets are down in early trading, following those deep losses in Asia overnight. The FTSE 100 has dropped 40 points, or 0.6%, to 6426, led by Arm Holdings. The smartphone chipmaker has dropped over 4% after reporting disappointing financial results this morning, less than a week after Apple (a key customer for ARM) also missed expectations. ARM did grow profits by 19%, but admitted that sales of some high-end chips had slowed. The other main European markets are down around 0.5%-0.6% in early trading. Updated at 8.24am GMT 8.01am GMT Analysts at Crédit Agricole reckons the turbulence will continue for a while, telling clients that: Investors should steer clear of risk assets over the short term as the turmoil does not look like it will be over anytime soon. 7.59am GMT Japans Nikkei, last three months to February 4 2014 The Nikkei over the last three months. Photograph: Thomson Reuters The Nikkei has now fallen by 14% in barely a month, as Japans stock market felt the full force of the recent selloff. It shed another 610 points this morning as it dropped over 4% to 14,008 - with only two companies defying the selloff. A clutch of heavyweight manufacturers, from Japan Steel Works to Sharp, all fell at least 8% during the day. Bit of a frightening chart: #Japans Nikkei breaks 200day Moving Average for the first time since #Abenomics. pic.twitter/fmZKHG7Mup — Holger Zschaepitz (@Schuldensuehner) February 4, 2014 Updated at 9.22am GMT 7.43am GMT Nikkei slides 4.2% in Asian market rout A currency trader reacts as he works at the Korea Exchange Bank headquarters in Seoul, South Korea, Tuesday, Feb. 4, 2014. A currency trader at the Korea Exchange Bank headquarters in Seoul, South Korea, today. Photograph: Ahn Young-joon/AP Good morning and welcome to our rolling coverage of the financial markets, the economy, the eurozone and the business world. European stock markets are heading for further falls this morning after another rout in Asia overnight send markets to fresh lows, leaving Japans Nikkei in its worst slump since last June. Nagging fears over an emerging market crisis, and worries that the US economy has hit a rut, are haunting the markets. The Nikkei just slumped to a 4.2% loss, sliding deeper into an official correction, in a nervy selloff, following the Dow Joness 300 point tumble last night. Every Asian index is in the red (excluding those closed for the Chinese lunar New Year). South Korea’s Kospi fell 1.7%, while the Australian S&P/ASX 200 shed 1.8%. Yesterday, Wall Street had been hit by a weak ISM manufacturing survey from the ISM, and concern that Washington faces another battle over the debt ceiling. Treasury secretary Jack Lew is demanding action very soon -- with a fresh warning on Monday that America is running out of time to raise its borrowing limits. Over in Melbourne, Chris Weston of IG reports that: The market feels like its been hit by a freight train and traders are asking what exactly is going on. What started out as a profit taking exercise has steamrolled into something far more substantial. Heres the early spreadbetters forecasts: FTSE100: to open 43 points lower at 6,424 DAX: to open 89 points lower at 9,098 CAC40: to open 34 points lower at 4,074 The yen continues to strengthen against the dollar - undermining Tokyos efforts to stimulate inflation. Traders have also moved money out of stocks and into safer bonds, pushing down the yield (interest rate) on US Treasuries to its lowest level since early November. The irony for European policymakers is that this selloff comes just as the eurozone looks a little brighter, and as the UK recovery continues. Yesterday we saw encouraging manufacturing surveys from most eurozone countries (although not France) - there must be concerns that this long-awaited recovery is knocked off course by events elsewhere. We get new economic data shortly - the latest Spanish unemployment data (around 8am), and Januarys survey of UK construction (9.30am GMT). Ill be tracking all the main action through the day. A currency trader gestures in front of screens showing the Korea Composite Stock Price Index and foreign exchange rate at the Korea Exchange Bank headquarters in Seoul, South Korea, Tuesday, Feb. 4, 2014. The Korea Exchange Bank headquarters in Seoul, South Korea, Tuesday, Feb. 4, 2014. Photograph: Ahn Young-joon/AP Updated at 8.02am GMT theguardian/business/2014/feb/04/markets-slide-nikkei-europe-ftse-business-live
Posted on: Tue, 04 Feb 2014 16:59:33 +0000
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