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Asian markets rebounded on Tuesday following a series of losses last week after released data showed improved manufacturing activity in China and buoyancy that Federal Reserve Chairman Ben Bernanke may unveil steps to boost the US economy. 



Hong Kong’s Hang Seng climbed 1.99 percent to 19,875, Japan’s Nikkey rose 1.2 percent to 8,733 while the Kospi in South Korea posted the largest gain to 1,777, a 3.86 percent increase.


Market uncertainty continued to prevail however as investors sought out the safe haven of the bullion, leading to gains of an all time high of 1,901,80 an ounce, up $10.60, in Tuesday’s electronic trading.


Platinum traded at $1903.25 after it rose by 0.7 percent or $1,916 an ounce, to its highest price in three years.


Japan’s Asahi Group Holdings said Thursday it has come to an agreement to buy New Zealand’s leading ready-to-drink cocktail company, Independent Liquor, for $1.31bn from Pacific Equity Partners and Unitas Capital Pte.
 


The brewer hopes to grow a stronger position in New Zealand and Australia, and aims to increase its overseas sales between 20 percent and 30 percent, the group said.
 
Asahi’s oversees sales currently account for 6.6 percent compared to the 23 percent of its competitor, Kirin Holdings. 
 


The transaction, which is the largest ever by a Japanese company targeting the New Zealand market, is due to be completed by the end of September, according to a statement.
 
Japanese firms have been on a spending spree in foreign markets as domestic consumption decreases due to the nation’s shrinking and ageing public.

Food and beverage company, Suntory Holdings, announced on Wednesday it is to launch a new company to help drive Southeast Asian M&A’s.
 
The acquisition comes amid increased movement in the beverage sector which saw Australian brewer Foster’s ward off a $10bn hostile takeover bid SABMiller on Thursday.

Stocks in Europe fell on Wednesday after a meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel late on Tuesday to discuss the area’s rescue fund and borrowing.

The duo had been under pressure to re-establish market confidence after a bout of volatility and uncertainty.
 
Tokyo’s Nikkei and S&P 500 were 0.6 percent and 0.97 percent down respectively at close of trading. Frankfurt dropped 1.5 percent, while London’s FTSE and Paris CAC were both down 1 percent in early trading.
 
The leaders of Europe’s strongest economies revealed plans late on Tuesday for closer eurozone incorporation, including biannual summits and deficit boundaries but announced that euro bonds are an option only in the long-term. A president is also to be elected to represent the bloc. European Council President, Herman Van Rompuy, is a likely candidate according to reports.

Germany, the EU’s biggest economy, saw a near stalling in 2Q11 as its GDP grew by just 0.1 percent between April and June, according to the country’s Federal Statistics Office.
 
The figure, which was below market expectations of 0.5 percent, marks a substantial drop from the downwardly amended 1Q11 increase of 1.3 percent and raises concerns over the wider eurozone and global economy.
 
A decrease in consumer spending and capital formation in construction were largely responsible for the slowdown while investments and exports were “positive contributors” over the last quarter, according to the statistics office.
 
The result comes just a week after the French and US economy posted similarly poor GDP growth for the same quarter.

Japan’s economy contracted during 2Q11 at a slower than expected pace by an annualised rate of 0.3 percent in the three months to the end of June, the cabinet office said.

Real GDP was down 1.3 percent and showed stronger signs of recovery thanks to consumer spending in the wake of the March earthquake and tsunami disaster. Analysts had been expecting a drop of 2.6 percent for the quarter.

On the news the MSCI Asia Pacific Index climbed 1.9 percent in Tokyo and the Nikkei 225 was up 1.37 percent. The country’s largest car manufacturer by value, Toyota Motors, rose 2.9 percent.

European markets opened higher with the FTSE MIB Index up four percent, Euro Stoxx 50 up 0.87 percent and the Swiss index rising 2.15 percent.

Amid heightened international market volatility, ESMA, the EU’s regulator, announced late on Thursday that France, Belgium, Spain and Italy have banned short selling in an attempt to curb rumours and halt the precipitous fall in value of troubled EU banks.
 
In Spain and France the ban will last 15 days and is only applicable to stocks in the financial sector. Financial institutions included BNP Paribas SA, Société Générale SA and Crédit Agricole SA in France, and Banco Santander and Bankia SA in Spain.
 
Belgium’s ban is restricted to four financials only and no concrete time duration was given. It was unclear which stocks would be affected and how long the ban would be in place for Italy.
 
The prohibition which begins on Friday was imposed by ESMA in an effort “to restrict the benefits that can be gained from disseminating rumours, false and misleading news,” the regulator said.

The Paris stock exchange lost over five percent of value and French financials were hammered late on Wednesday amid rumours that French banks were in serious difficulty.
 
France’s second-largest bank, Société Générale, which holds significant amounts in Greek and Italian debt, saw its shares drop by 21 percent before closing down 14.7 percent late on Wednesday.
 
The FTSE fell 3.05 percent, in New York the Dow was down just over three percent, the CAC in Paris plunged 5.45 percent and the pan European Stoxx dropped 3.75 percent.
 
European and Wall Street shares had resumed their fall after a rebound on Tuesday on fears France could follow the US and lose its coveted AAA credit rating. However, there had been no warnings issued by any of the credit rating agencies.


Asian stocks have rallied in early trading on Wednesday from their downward trend earlier in the week after the US Federal Reserve promised to keep interest rates near the zero level “at least through to mid-2013.”


Europe’s stock markets also opened higher after overnight increases on Wall Street and Asian markets, which saw the Hong Kong rebound with a rise of 3.27 percent while Tokyo climbed 1.11 percent.

Global stock markets have been plummeting since early August following an unprecedented US credit rating downgrade.
The FTSE 100 index gained 1.7 percent, Frankfurt’s DAX jumped 2.2 percent and Paris’s CAC-40 increased by 1.9 percent.

At close of trading on Tuesday the Dow Jones Industrial Average finished up 3.9 percent at 11,239 while S&P’s 500-stock index rose 4.7 percent to 1,172.

European stock markets plummeted further on Tuesday following a sharp rise in Chinese inflation, adding to woes over debt contagion across the eurozone and fears of another US recession.

Market volatility reached its peak when Britain’s FTSE 100 index, which traded 20 percent below its February peak of 6091 points, plunged officially into bear territory as analysts watched global stocks plummet.

The Dow Jones Industrial Average lost 634.76 points, or 5.55 percent, to 10,809.85, while the Nasdaq composite slumped 174.72 points, or 6.90 percent, to 2,357.69.

Volatility commenced after the Dow dropped 634 points or 5.5 percent following Standard & Poor’s announcement late on Friday that it downgraded US credit from AAA to AA+.

US financial stocks, including that of Bank of America, which saw stocks fall 20.32 percent, were also hit as they suffered their worst one day share sell-off in over two years.
 
Gold surpassed the $1,700 barrier in trade and was seen to reach as high as $1,721 and as low as $1,681, while the gold spot price per ounce rose $53.60 to $1,717. Traders dug into the metal’s safety net as crude oil prices dipped over fears of a double dip recession.
 
The US Federal Reserve announced a policy meeting for later in the day as most UK news agencies reflected on overnight civil unrest leading to further market volatility.

China’s PPI increased by 7.5 percent year-on-year while the inflation rate rose 6.5 percent to a 37-month high in July.

Inflation was driven by a14.8 percent spike in food costs, the country’s National Bureau of Statistics said on Tuesday.

The data comes amid European sovereign debt concerns and worries of a ‘double-dip’ US recession, and shows that China’s inflation continues to accelerate despite an 18-month monetary tightening effort.

The country’s inflation rate is now showing its highest year-on-year growth since June 2008, according to published figures.

China has been trying to curb its overheated economy with tougher home-buying rules, bank reserve ratio increases and interest rate hikes.

Producer purchase prices increased by 11 percent year-on-year in July, but rose just 0.1 percent on a month-on-month basis, the NBS said.

The cost of production materials for the same period climbed 8.4 percent year-on-year, but were flat on a month-on-month basis.

As European markets opened on Monday yields on Spanish and Italian bonds saw a sharp fall to 83 and 79 basis points respectively following an intervention by the European Central Bank. The ECB backed up its promise to expand its purchases of sovereign debt to support Madrid and Rome by entering into European bond markets to buy their respective bonds in an attempt to steady the markets.

“The ECB will actively implement its securities markets programme. This programme has been designed to help restore a better transmission of our monetary policy decisions, taking account of dysfunctional market segments, and therefore ensuring price stability in the euro area,” the ECB said in a statement late on Sunday.

Previous bond purchases had been restricted to countries that received a bailout including Portugal, Ireland and Greece but fears that rising bond yields could force Italy and Spain to seek a bailout triggered ECB involvement.

“The Governing Council welcomes the announcements made by the governments of Italy and Spain concerning new measures and reforms in the areas of fiscal and structural policies. It considers a decisive and swift implementation by both governments as essential in order to substantially enhance the competitiveness and flexibility of their economies, and to rapidly reduce public deficits,” the ECB said.

President Obama has announced that senior Republican and Democrat party members have agreed a proposal to limit US debt by $2.4bn in order to avoid deault or downgrading from the nation’s triple A rating.

Making the announcement on Sunday, Obama said the agreement will cut spending by about $1trn over the next decade.

Votes in both houses are expected shortly, as many believe the deal is still set to meet resistance from Republican Tea Party members and certain sections of the Democrat party.

The deal would also put in place a new Congressional committee dedicated to recommending a further deficit reduction proposal by November.

Swiss banking group Credit Suisse on Thursday announced a 2Q11 net earnings drop of 52 percent year-on-year to SFr768m amid weak trading activity and currency exchange effects of the Swiss franc.

The group’s wealth management division reported a pre-tax profit of SFr843m, down four per cent from 2Q10 due to “challenging” market conditions, a statement said.

Credit Suisse plans to cut four percent of its global headcount, an estimated 2,000 jobs, as part of a cost savings programme that is expected to reduce expenses by SFr1bn annually starting in 2012.

CEO, Brady Dougan, said: “Asset management showed a strong performance in the quarter, and private banking recorded solid results despite significant market headwinds and maintained its strength in gathering net new assets. However, our performance in investment banking was below our expectations.”

Commenting on the planned cost savings, he said: “In order to ensure attractive returns in the face of an uncertain and challenging economic and market environment, we continue to be proactive about seeking cost efficiencies across the bank.”

The bank said that its Switzerland boss, Hans-Ulrich Meister, will also take over the CEO role in the private banking division starting in August. The current CEO, Walter Berchtold, will become chairman of private banking, the group said.

Swiss bank UBS said on Tuesday it plans major job cuts to reduce costs of up to $2.5bn over the next two to three years. The announcement came as it reported a 49 percent 2Q11 decrease in net profit to CHF1.01bn from CHF2bn during the same period in 2010.

Group revenues were down 14 percent for the quarter to CHF7.2bn due to lower client activity, while the drop in quarterly profit was blamed on the high value of the Swiss currency and weaker trading, according to a bank statement.

The company said: “New capital and regulatory requirements, combined with a weakening economic outlook, are likely to weigh on future returns, constraining growth prospects for the industry. While we believe we will deliver higher profitability, our target for pre-tax profit set in 2009 is unlikely to be achieved in the original timeframe of three to five years. Over the next two to three years, UBS will eliminate costs of CHF1.5bn to CHF2bn, while remaining committed to investing in growth areas.”

Group CEO, Oswald Grübel, said: “We are responding to this changed environment and the weakening economic outlook by adapting our business and increasing efficiency. While our target for pre-tax profit set in 2009 is unlikely to be achieved in the original timeframe, our strong competitive positioning and our capital strength give us confidence for the future.”
 
Meanwhile, Deutsche Bank’s 2Q11 net profits failed to reach market expectations as it rose only six percent year-on-year to €1.23bn.

The bank also warned that it may miss its target of generating €6.4bn from its investment banking division due to the European debt crisis, according to a statement.

In other news Deutsche Bank named Anshu Jain, the head of its investment division, and European business head, Juergen Fitschen, as co-chief executives with immediate effect.

Bank of Ireland, which has been struggling to ward off government control through capital restructuring and rights issues, has received a boost from a group of Canadian and US investors who have agreed to buy up to €1.12bn worth of its shares.

The deal comes as the lender was preparing for a €1.9bn rights issue completion that would have seen the government gain control of the bank by increasing its 36 percent stake to around 70 percent.

The investment is widely perceived to be a significant vote of confidence for both the Bank of Ireland and the Irish economy.

Moody’s Investors Service on Monday cut Greece’s sovereign debt by three notches to Ca from Caa1, warning the second bailout of Greece is likely to result in a default and weaken the credit ratings of the stronger European nations.

The rating agency warned in a statement that it is inevitable that Greece will be deemed in default as “the support package incorporates participation of private sector holders of debt who are now virtually certain to incur credit losses. If and when the debt exchanges occur, we would define this as a default by the Greek government on its public debt.”

The €109bn support package for Greece announced after last Thursday’s summit in Brussels benefits all euro area sovereigns by containing the contagion risk that would likely have followed a disorderly payment default on existing Greek debt, Moody’s said.

“However, the credit implications of the announcement for creditors of individual countries depend on the balance of the positive market-stabilising elements of the plan and the negative precedent set by the endorsement of distressed exchanges between Greek creditors and the sovereign,” it added.

Moody’s said it will reassess Greece’s ratings once any proposed debt exchanges have taken place.

It said: “Once the distressed exchange has been completed, Moody’s will reassess Greece’s rating to ensure that it reflects the risk associated with the country’s new credit profile, including the potential for further debt restructurings. While the rating agency believes that the overall package carries a number of benefits for Greece, a slightly reduced debt trajectory, lower debt-servicing costs, as well as reduced reliance on financial markets for years to come, the impact on Greece’s debt burden is limited.”