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Those are the latest headlines. It is time for World Business Report. | :00:11. | :00:19. | |
Welcome. Market turmoil. Shares take a battering around the world | :00:19. | :00:23. | |
as gloom surrounds the economic prospects through Europe and the US. | :00:23. | :00:29. | |
In Asia, investors do the same as their US and European counterparts, | :00:29. | :00:33. | |
driving markets lower. All change at Hewlett Packard, | :00:33. | :00:40. | |
planning a big move into software and will stop making personal | :00:40. | :00:48. | |
computers, tabards and phones. After a few days of calm, turmoil | :00:48. | :00:53. | |
has returned to the financial markets. The Asian markets are | :00:53. | :00:57. | |
trading low and the New York the Dow industrials fell more than 3.5% | :00:57. | :01:02. | |
and the Nasdaq more than 5%. That followed steep falls in European | :01:02. | :01:06. | |
markets. Investors were upset by disappointing news on the US | :01:06. | :01:10. | |
economy. Concern remains about Europe's debt crisis. Shares in the | :01:11. | :01:14. | |
European banks were particularly hard hit. Most down yesterday, | :01:14. | :01:18. | |
around 10%. Their fortunes are linked to the state of the global | :01:18. | :01:24. | |
economy. But gold is seen as a stake -- safe haven. It reached a | :01:24. | :01:31. | |
new record high. It is now up over 20% since the | :01:31. | :01:36. | |
beginning of July. I am joined by head of global research at HSBC. | :01:36. | :01:45. | |
What specifically is making the markets scared? It is a collective | :01:45. | :01:48. | |
understanding. Growth is much weaker than expected. The problem | :01:48. | :01:57. | |
with that is that, if growth is low, the debt levels will not get paid | :01:57. | :02:02. | |
down, the economy is just trawling along. It is one hit after the | :02:02. | :02:07. | |
other. Last week we had the US Federal Reserve saying that they | :02:07. | :02:12. | |
were keeping interest rates close to zero for two years. The markets | :02:12. | :02:19. | |
were very volatile. It is all back now. Central banks and governments | :02:19. | :02:22. | |
have been saying for some months that they expected a slowdown in | :02:22. | :02:26. | |
the second half of the year. What has changed? It is the speed of the | :02:26. | :02:31. | |
slowdown. The fact that yesterday we saw manufacturing data, | :02:31. | :02:35. | |
employment data and housing day that out of the US have all week. | :02:35. | :02:40. | |
We saw weak economic data out of Europe. They were weaker than | :02:40. | :02:50. | |
:02:50. | :02:53. | ||
expected. We also saw some tensions in the money markets in Europe, | :02:53. | :02:59. | |
European bank to get dollars and that sort of thing. That is | :02:59. | :03:02. | |
worrying because the Federal Reserve in the US, they outsource | :03:02. | :03:06. | |
it may be concerned about the European branches of some of the US | :03:06. | :03:12. | |
banks. As you say, the European Central Bank is rumoured to have | :03:12. | :03:17. | |
pumped liquidity into one bank. is not much and is not nearly as | :03:17. | :03:22. | |
bad as it was in 2008 when we had problems with the lean and Robert - | :03:22. | :03:27. | |
- Lehman Brothers. But it is the fact that some of the tensions we | :03:27. | :03:31. | |
saw them are coming back. And central banks have just about run | :03:31. | :03:36. | |
out of policy tools. What can they do? We have got rates at zero, | :03:36. | :03:46. | |
long-term bonds at recurred lope years. -- at record low yields. The | :03:46. | :03:51. | |
only good news I saw was that refinancing of housing in the US is | :03:51. | :03:58. | |
at a lower level. And the oil price is down. Yes. Let's pick up on what | :03:58. | :04:04. | |
markets are doing now. We are joined by our Asia Correspondent. I | :04:04. | :04:14. | |
:04:14. | :04:16. | ||
see that the Nikkei is down 2%? And so are a lot of be other forces. | :04:16. | :04:23. | |
Australia's is down. The Hang Seng is down. The worst occurred in | :04:23. | :04:28. | |
South Korea where the Kospi was well down well over 4%. It fell to | :04:28. | :04:34. | |
its lowest level in some two years. One analyst I spoke to said that is | :04:34. | :04:41. | |
because the Kospi attempts to attract more foreign investors. It | :04:41. | :04:45. | |
has also got more exposure to technology stocks as well, which | :04:45. | :04:49. | |
had been seeing a huge sell-off in the last week or so. We have had | :04:49. | :04:57. | |
the likes of technology firms like Hewlett Packard are having to cut | :04:57. | :05:01. | |
their sales forecast. That may be another reason why the Kospi is | :05:01. | :05:10. | |
falling. The likes of Taiwan as well is more exposed to technology | :05:11. | :05:17. | |
firms. And also at there are continued worries in the US and | :05:17. | :05:21. | |
Europe. In the US restore consumer confidence down quite dramatically. | :05:21. | :05:29. | |
That really impacts a lot of the producers here in Asia. | :05:29. | :05:35. | |
Thank you very much.. Hewlett Packard is on the verge of buying | :05:35. | :05:40. | |
Autonomy, Britain's most successful software company. It is part of an | :05:40. | :05:43. | |
overhaul of the business as it moves into software and away from | :05:43. | :05:53. | |
:05:53. | :05:53. | ||
the Business it is best known for, making computers. This is | :05:53. | :05:58. | |
considered the best place of Silicon Valley. HP was also behind | :05:58. | :06:02. | |
one of the defining deals of the technology industry, merging with | :06:02. | :06:08. | |
Compaq in 2002. It cemented its position as a computer maker. Now | :06:08. | :06:14. | |
it is leaving that behind. Although it personal computers represent one | :06:14. | :06:21. | |
third of revenue, it is only 13% of overall profits. It is important | :06:21. | :06:25. | |
that we focus on the areas that are driving the bottom line. Just weeks | :06:25. | :06:30. | |
after the launch, it is also saying goodbye to its tablet computer, the | :06:30. | :06:36. | |
touch pad which runs on its operating system was in danger of | :06:36. | :06:41. | |
becoming a money pit. They are no longer going to offer the hardware | :06:41. | :06:45. | |
devices that they launched to a lot of fan fire up -- a lot of fanfare. | :06:45. | :06:54. | |
But the sales have been abysmal. with no personal computers, what is | :06:54. | :07:01. | |
hate to be focusing on? Like IBM it wants to turn itself into a | :07:01. | :07:06. | |
software company. -- what is Hewlett Packard focusing on? Since | :07:06. | :07:10. | |
joining Hewlett Packard as chief executive, come this man has been | :07:10. | :07:16. | |
trying to revitalise the company. It is a radical change of direction | :07:16. | :07:25. | |
and one he hopes will pay off. US vice-president Joe Biden | :07:25. | :07:31. | |
continues his tour of China. He and the vice-president of China joined | :07:31. | :07:36. | |
a round table discussion with the US and Chinese business leaders. In | :07:36. | :07:40. | |
the other name, he is due to hold talks with the Chinese premier | :07:40. | :07:46. | |
before travelling to a south- western then town. Let's go to | :07:46. | :07:54. | |
Beijing. What has been the tone of the visit? From what we are being | :07:54. | :08:00. | |
told, up from the briefings being given out, the little stick bits | :08:00. | :08:06. | |
coming from the US officials, they are saying they have been very | :08:06. | :08:08. | |
productive and co-operative. They are saying it has been very | :08:08. | :08:17. | |
friendly. There were meetings this morning with Chinese and American | :08:17. | :08:22. | |
business leaders. China's vice- president, the man who everybody | :08:22. | :08:30. | |
expects will be the President in just over one year's time, a hugely | :08:30. | :08:35. | |
important figure for Joe Biden to be meeting, has been saying that he | :08:35. | :08:41. | |
is confident that America can overcome its troubles. Convent | :08:41. | :08:48. | |
words publicly it from him. -- confident words. They must be some | :08:48. | :08:51. | |
concern from the Chinese perspective that a slowdown in the | :08:51. | :08:57. | |
US economy would lead US politicians to become more | :08:57. | :09:05. | |
defensive and protective of their economy. I think there is a real | :09:05. | :09:12. | |
concern about a possible slowdown in America or even in Europe. Both | :09:12. | :09:16. | |
are still enormous markets for China's exports. Exports are still | :09:16. | :09:21. | |
one of the things that power this economy. More even than the | :09:21. | :09:25. | |
concerns about protectionism is the simple concern for China that it | :09:25. | :09:30. | |
does not want to see those exports drying up. That could cause a huge | :09:30. | :09:34. | |
problems for companies and jobs. It could also push the US to do more | :09:34. | :09:38. | |
quantity of easing to try to stimulate its economy. China is | :09:38. | :09:42. | |
worried about that, fearing it would fuel inflation and reduce | :09:42. | :09:44. | |
those huge dollar holdings China has. | :09:44. | :09:54. | |
:09:54. | :10:04. | ||
Thank you. That's it from me. More Some more news from the UK: Prisons | :10:04. | :10:08. | |
in England and Wales are taking in around 100 extra people per day as | :10:09. | :10:13. | |
the courts continue to process cases linked to the looting and | :10:13. | :10:17. | |
rioting. The Prison Governors Association release the figures and | :10:17. | :10:21. | |
says there is no immediate crisis but once that jails could run out | :10:21. | :10:27. | |
of space. -- but warns that. Just as the riots court police and | :10:27. | :10:32. | |
politicians are aware, they came at a time there are fewer court | :10:32. | :10:37. | |
hearings. August on England's streets does not usually look like | :10:37. | :10:43. | |
this. But after almost two weeks of hearings, many of those found | :10:43. | :10:46. | |
guilty are now packing prisons. The prison population in England and | :10:46. | :10:55. | |
Wales has risen to more than 86. -- 86,000. In the past six days, 667 | :10:55. | :10:58. | |
people have been given jail sentences, with many other spending | :10:58. | :11:05. | |
time in custody. There are now only 1,200 spaces left in prisons and | :11:05. | :11:10. | |
room for just 200 more in immigration removal centres. The | :11:10. | :11:13. | |
Prison Governors Association says that there is no need to panic, but | :11:13. | :11:18. | |
if things get worse ministers may come under pressure to keep open to | :11:18. | :11:23. | |
Max more prisons that were due to close next month. Contingency plans | :11:23. | :11:27. | |
were also thought to include housing some inmates three to a | :11:27. | :11:32. | |
cell. There are suggestions the illegal | :11:33. | :11:37. | |
party drug Ecstasy could be developed as a treatment for cancer. | :11:37. | :11:43. | |
Researchers at the University of Birmingham say the drug can be | :11:43. | :11:47. | |
effective when modified into tackling blood cancers like | :11:47. | :11:51. | |
leukaemia. Coming up at 6am, Charlie and Kate will be here with | :11:51. | :11:59. | |
breakfast. You can also here more from the widow of the man who was | :11:59. | :12:04. | |
killed by a sharp while on honeymoon in the Seychelles. -- | :12:04. | :12:14. | |
:12:14. | :12:15. | ||
The top stories: Afghan police are saying three people have been | :12:15. | :12:22. | |
killed in a series of suicide attacks. One of British culture of | :12:22. | :12:27. | |
this. A spokesperson said the target appeared to be the British | :12:27. | :12:30. | |
Council, which specialises in cultural exchanges. Our | :12:30. | :12:35. | |
correspondent has more. It was a very big attack. The explosions | :12:35. | :12:39. | |
were heard across Kabul. Comics tell me some of their windows were | :12:39. | :12:47. | |
blown open by the force of the explosions. We are hearing from | :12:47. | :12:50. | |
witnesses that six suicide attackers attempted to gain access | :12:50. | :12:54. | |
to the building. The Egyptian Army says three of its | :12:54. | :12:59. | |
soldiers have been killed during an Israeli air ride against the | :12:59. | :13:02. | |
militants along the border. The raid was carried out in a response | :13:02. | :13:06. | |
to attacks on Thursday. Spain is due to announce further | :13:06. | :13:10. | |
austerity measures in an effort to ease investors' fears about the | :13:10. | :13:15. | |
size of its debt. There have been concerns that Spain may need a | :13:15. | :13:20. | |
bail-out. The US, Britain, France and Germany | :13:20. | :13:24. | |
have demanded that President Bashar al-Assad leaves of this it follows | :13:25. | :13:29. | |
-- following the violent oppression of protesters in Syria. This is the | :13:29. | :13:32. | |
first explicit calls from the US for him to step down. | :13:33. | :13:42. | |
:13:43. | :13:43. |