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