:00:01. > :00:06.after he was found guilty of abduction.
:00:06. > :00:16.Those are the latest headlines from BBC World news. Time for the money
:00:16. > :00:24.
:00:24. > :00:28.news and what business report. -- Turmoil on global markets as
:00:28. > :00:33.investors face a world without the Federal Reserve stimulus. From
:00:33. > :00:37.stocks to bonds to commodities, nothing is spared the sell-off.
:00:38. > :00:47.It is a billion-dollar industry and growing fast, but will Brussels
:00:48. > :00:48.
:00:48. > :00:53.star that the boom in electronic A warm welcome to World Business
:00:53. > :00:59.Report. Also coming up in the programme: Talks in Beijing as
:00:59. > :01:02.Europe and China tried to head off a damaging trade war.
:01:02. > :01:07.Financial markets around the world have been in turmoil as investors
:01:07. > :01:11.come to terms with a new reality that the era of massive support
:01:11. > :01:15.from the US Federal Reserve is coming to an end. For years the
:01:15. > :01:19.board's most powerful central bank has been pumping billions of
:01:19. > :01:23.dollars into the financial system, keeping borrowing costs at rock
:01:23. > :01:30.bottom and pushing up the value of assets around the world.
:01:30. > :01:33.Confirmation from the Chief of the Federal Reserve that he is going to
:01:33. > :01:38.be winding down what we have been going quantitive easing it as the
:01:38. > :01:44.US in Proops has sparked a global sell-off in those assets. Major
:01:44. > :01:52.stock markets from Europe to India to South Africa also force of
:01:52. > :01:58.between 3-4 %. The S&P 500 had its worst day since 2011. Gold, silver,
:01:58. > :02:02.copper and oil also all plunged, as have bond prices. In just a moment
:02:02. > :02:08.we will be going to Asia, where markets are stabilising a little
:02:08. > :02:11.bit. But first this report from the New York Stock Exchange.
:02:11. > :02:16.US markets have been reacting poorly to the news that the US
:02:16. > :02:22.Federal Reserve may in fact start scaling back its stimulus programme
:02:22. > :02:26.a little earlier than anticipated. Since we heard from the chief on -
:02:26. > :02:32.the chief of the Fed, market in the US have been falling. On Thursday,
:02:32. > :02:37.the S&P saw its worst day since 2011, dropping by 2.5%. The Dow
:02:37. > :02:43.Jones also dropping by 2%. The markets have been craving clarity
:02:43. > :02:47.from the chairman, wanting to know when it would start scaling back it
:02:47. > :02:51.stimulus programme. Markets have heard what the chairman has to say
:02:51. > :02:54.and they have not like it one bit. In speaking with traders on the
:02:54. > :02:59.floor of the New York Stock Exchange, the sense is the sell-off
:02:59. > :03:04.will in fact continue. We're just a few weeks away from the Fourth of
:03:04. > :03:08.July holiday in the States, which is usually a slow period for market.
:03:08. > :03:11.Unless we hear some positive economic data in the next few days,
:03:11. > :03:18.the downward trend we are seeing is here to stay for the next little
:03:18. > :03:25.while. Let go straight to our reporter in
:03:25. > :03:28.a Singapore Bureau. How are things going in age at the moment? As you
:03:28. > :03:34.mentioned there is some stability in Asian markets in midday trading,
:03:34. > :03:39.but they are still at their lowest levels in almost ten months. Stocks,
:03:39. > :03:48.currencies, commodities being sold. Investors continued to digest the
:03:48. > :03:53.plan to scale back stimulus measures in the US. China's central
:03:53. > :03:54.bank offered some comfort as it told major state banks to resume
:03:54. > :04:00.told major state banks to resume supplying funds after tightening
:04:00. > :04:04.liquidity on Thursday. This is a little bit of fresh air for many
:04:04. > :04:09.investors who have been selling off their stocks over the past trading
:04:09. > :04:14.days. Australia currently training earlier losses. South Korean shares
:04:14. > :04:16.also curbing some of the losses also curbing some of the losses
:04:16. > :04:24.after it losing 2.5% in early trading. And Kong and Shanghai and
:04:24. > :04:30.shares are still down, but only by a few %. Japan's stock average, the
:04:30. > :04:35.Nikkei 225 down by 2%. Now law by 1%. Analysts say stocks are
:04:35. > :04:39.tumbling, but over the longer term, financial markets will regain
:04:39. > :04:43.stability as the US economy regains sustainable growth.
:04:43. > :04:48.The markets are still jittery. Let's talk about the smog. You and
:04:48. > :04:53.I were talking about it yesterday. I can see from the window behind
:04:53. > :04:59.you looks like it is getting worse. That leads on to the discussion
:04:59. > :05:06.about the economic impact of it. Just to give you some background.
:05:06. > :05:12.The smoggy is really bad. It has failed to new record highs. Now let
:05:12. > :05:16.401, a very hazardous and unhealthy level. Singapore has never
:05:16. > :05:23.experienced this kind of days. Even in the studio I still have to wear
:05:23. > :05:31.my mask after this broadcast. One economist said that the tourism
:05:31. > :05:36.industry, which makes up 5-6 % of GDP, will be hardest hit. The
:05:36. > :05:38.initial impact will be over $400 million. Other analysts say if the
:05:38. > :05:43.Government implement a stop work order, it will not only hurt
:05:43. > :05:47.tourism but also the construction and manufacturing industries. The
:05:47. > :05:57.economic cost could be in the range of $1 billion.
:05:57. > :06:01.I think if you can his best to stay Let's have to Beijing, where
:06:01. > :06:05.European Union leaders ended China's leaders will be trying to
:06:05. > :06:11.defuse a simmering trade dispute at a meeting later today. The row over
:06:11. > :06:14.China's solar panel exports is expected to be raised on the
:06:14. > :06:22.sidelines of annual trade talks between the two countries.
:06:22. > :06:26.Our correspondent has more. EU-China trade has mushroomed to
:06:26. > :06:29.more than $1 billion per day. When the one hand, a triumph of co-
:06:29. > :06:33.operation. The sheer volume of goods now flowing in both
:06:33. > :06:37.directions means that on the other end the disagreements become more
:06:37. > :06:42.acute. On the official agenda of the annual trade committee talks
:06:42. > :06:47.being held here in Beijing are the usual for the subject. Market
:06:47. > :06:52.access barriers and intellectual property protection for example. EU
:06:52. > :06:58.officials say that another, more specific and explosive issue will
:06:58. > :07:01.be discussed on the sidelines. The EU imposed tariffs on Chinese solar
:07:01. > :07:09.panels exports earlier this month following a finding that they were
:07:09. > :07:15.being dumped at artificially low prices. China has now launched an
:07:15. > :07:18.investigation into the prices of European wine exports. Some
:07:18. > :07:23.European big exporting countries are urging the EU trade
:07:23. > :07:31.commissioner to find a negotiated settlement before the issue spirals
:07:31. > :07:35.into a full-blown trade war. Let's move on to these. They are a
:07:35. > :07:39.billion-dollar industry and they are growing fast. Their supporters
:07:39. > :07:47.say they are a safer alternative to smoking. Electronics cigarettes you
:07:47. > :07:50.a battery-powered device to turn nicotine based liquid into vapour.
:07:50. > :07:54.They have divided regulators and anti-smoking activists. There is a
:07:54. > :07:59.debate on their health. Today EU health ministers will discuss
:08:00. > :08:02.proposals that could see some electronics regret we classified as
:08:02. > :08:06.medicinal products and that would subject them to extensive health
:08:07. > :08:12.testing and in some countries require that they be sold only in
:08:12. > :08:18.pharmacies. Catherine Devlin is from the trade association. She
:08:18. > :08:24.drew to be now from the Welsh capital, Cardiff. Are you worried
:08:24. > :08:30.about the outcome of these talks? Actually, No. Oddly I am
:08:30. > :08:35.increasingly confident because the MEPs and council members are
:08:35. > :08:39.actually in forming themselves of the facts of this issue. As they do
:08:39. > :08:44.that more and more, they can only reach the right conclusions, which
:08:44. > :08:46.is that electronic cigarettes can never be Medicinal Products. He
:08:47. > :08:50.would have to break them and redesign them to turn them into
:08:50. > :08:55.medicines. I am confident that we will end up with sensible
:08:55. > :09:00.proportion of reclamation -- proportional regulation that works
:09:00. > :09:02.to make sure everything is safe. Also, almost more importantly, we
:09:03. > :09:07.will keep them in the hands of smokers that have made the switch
:09:07. > :09:11.and want and need them. You say that there is no chance that
:09:11. > :09:14.electronics cigarettes will be classified as medicinal instruments,
:09:14. > :09:20.and yet you stand by the claim that they are vastly healthier than
:09:20. > :09:24.normal cigarettes? Absolutely. It does seem a bit incongruous, but
:09:24. > :09:27.the fact is that if you wanted to turn an electronic cigarette into a
:09:27. > :09:31.medicine, it could no longer be an electronics cigarette as they are
:09:31. > :09:35.currently working. Millions of smokers around the world have made
:09:35. > :09:39.the switch and are now no longer smoking tobacco, but are instead
:09:39. > :09:43.using electronic cigarettes. That has to be good for public health.
:09:43. > :09:48.The unfortunate thing about the netizens programme is that it would
:09:48. > :09:51.require delivery of controlled dosages and that is not what
:09:51. > :09:57.smokers are looking for. That is not what they get from the