Rolling business and financial news, as European and Asian markets continue to be pummelled 11.44am BST The majority of European banks are likely to pass the ECBs stress tests, according to ratings agency Fitch. It said:We expect the majority of banks to pass the assessment, and many of those that fail could be technical failures, in the sense that capital shortfalls have either already been addressed in 2014 or capital is easily sourced from within a banking group. Only a small minority of institutions are likely to have a headline capital shortfall that means they will need to establish plans to raise capital or reduce assets by the middle of 2015. The ECBs comprehensive assessment is only a first step in levelling the playing field for banks access to private sector funds and ability to extend lending. High levels of unreserved problem loans will leave some banks, particularly in weaker countries, still vulnerable, Fitch Ratings says. There is a strong correlation between banks with the weakest balance sheets and weak eurozone sovereigns. Greece, Ireland, Italy and Spain made up more than two thirds of unreserved impaired loans at end of the first half of 2014. The banks with the highest unreserved impaired loans relative to capital tend to be from peripheral eurozone countries. 11.29am BST Heres the Reuters take on Carneys latest comments:Euro zone weakness will be only one factor that helps to determine when the British central bank raises interest rates, Bank of England Governor Mark Carney said in interviews broadcast on Monday.Carney told U.S. news channel CNN that weakness in the euro zone and elsewhere had been a major theme at the International Monetary Funds meetings in Washington, but that Britains recovery had been driven primarily by domestic factors.Carney added that the BoE had already forecast that Britains rapid recovery would slow slightly towards the end of 2014, and would continue to keep a close eye on domestic inflation pressures that might come from the labour market.Carney said in a separate interview with CNBC television that weaker global demand was producing a very benign global inflationary environment and that is something that we do certainly take into account. 11.15am BST Bank of England governor Mark Carney has been on CNN, suggesting the recent weakness in the eurozone might have an effect on the timing of UK interest rates, but it will not dictate policy. Here are the snaps of his comments, courtesy Reuters:13-Oct-2014 11:04 - BANK OF ENGLANDS CARNEY SAYS WILL TAKE EURO ZONE WEAKNESS INTO ACCOUNT IN THINKING ON INTEREST RATES - CNNCarney (CNBC) - Reiterates BoE independent. Ignore UK election when setting policy. Sees modest sign of deceleration in UK economy 11.02am BST Mkt rout wiped out $1.5tn dollar from global stocks last week. Global equities have lost $4.5tn in value since record pic.twitter.com/QwXwPbmbm5 10.45am BST Back in the corporate world, and Smith & Nephew has disappointed investors with news that a novel spray on skin treatment to help heal leg ulcers has failed in a late stage clinical trial.The product - designated HP802-247 - consists of living cells which are designed to work with the bodys own cells, but despite the failure of the trial in North America, a phase 3 study in Europe is due to report in 2016. But the outcome of this latest test is a particular disappointment given earlier successful trials. Analyst Nicholas Keher at Investec said:Phase 2b results were published in June 2011 and showed positive results, meeting both primary and secondary end points with a significant improvement over the gold standard treatment.The company therefore needs to determine why those results could not be repeated in the larger phase 3 trial in North America and whether they should attempt the trial again. A second phase 3 trial is currently underway in the EU, which is expected to report in May 2016 and Smith & Nephew will continue to review the HP802 program whilst this trial continues. 10.26am BST The Nobel Prize for Economics - technically The 2014 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel - is expected to be announced around noon (BST).My colleague Graeme Wearden is now covering the event, and his live blog is now up and running. 10.10am BST With no major economic data due today, and US bond markets closed for Columbus Day, it is likely to be another uncertain day on the markets.Indeed, European markets have now edged into positive territory after their early falls, with airlines lifted by the falling oil price. Mining shares are also giving some support after the better than expected data from China, a key consumer of commodities. 9.51am BST Falling markets do not appear to be stopping the flow of major deals, especially if they involve tax benefits.US healthcare group Steris has agreed to buy the UKs Synergy Health, a specialist in sterilisation services, for £19.50 a share or around $1.9bn. In the market Synergys shares have jumped 32% to £18.50. 9.35am BST Over in Russia, and the ruble continued to weaken against the dollar and euro, despite central bank intervention.The currency touched a new all-time low against the euro, as it continues to be pressurised by falling oil prices, the strength of the dollar and the impact of sanction on Russia due to the Ukraine situation. Russias central bank is rapidly using up its reserves in its fight to slow the roubles plunge. Mr Putin may have won the first easy battles but by putting politics before economics he is risking a deep recession. The slide in the price of oil is inflicting the worst damage.The news that he is removing troops from the Ukraine border may be posturing but could also be a sign that in the rumoured splits at Mr Putins imperial court the realists are starting to prevail. 9.21am BST European stock markets are clawing back some of their early losses, but theyre all still in the red (the DAX is down 0.3% and the CAC is down 0.4%).Alastair McCaig, market analyst at IG, says it could be a long week:Just over a month ago expectations that the FTSE could break above the 7,000 level were the norm, with the index trading less than 100 points away. The subsequent economic data out of Germany and dismantling of confidence has not only slaughtered European markets but dragged the UK down too. Only an hour or so into Mondays trading and this already feels like it will be a long week: ratings agencies are downgrading their outlook on France, Tuesdays German ZEW data is thought unlikely to inspire, the European Council is likely to reject the latest French budget, and Thursdays eurozone inflation figures are a real cause for concern. 9.16am BST Heres the biggest risers and fallers on the FTSE 100 this morning: $FTSE - 0.3% Main movers: pic.twitter.com/cwNbLlV86s 9.12am BST Todays stock market falls come as investors await a showdown between the European Central Bank, markets and politicians within Europe. Jeremy Cook of World First sums up the rival camps:The first, led by ECB President Mario Draghi, is those who are looking for a more accommodative monetary policy from the European Central Bank to further support business and lending within the Eurozone. The second are those members of the European Central Bank who are against these unconventional measures, led by Bundesbank President Jens Weidmann. 8.53am BST Another reason for gloom this morning; Britains public finances watchdog has warned that income tax revenues are likely to come in lower than expected.And thats because many of the jobs created since the recession ended are relatively poorly paid.Robert Chote, the head of the Office for Budget Responsibility, said the expected shortfall was due to the numbers going into relatively low paid work. From the perspective of the public finances, thats not particularly good news, he told the BBC Radio 4 Today programme. 8.45am BST While shares fall, the gold price is rising - up $8 per ounce to $1,230 this morning.Gold is benefitting from the market nervousness. It is also higher because the US dollar (in which it is priced) has fallen back after a recent rally. 8.24am BST Its another sea of red across Europes stock markets this morning, as the German DAX hit a new one-year low: 8.17am BST The FTSE 100 has hit its lowest level since July 2013, at the start of trading in London.The blue-chip index of top shares fell by as much as 43 points to 6294, a 15-month low.The [market] open is at least looking like a lonely and dark place for the bulls. Today's European markets look set to be like the weather in London today - stormy and squally.Mining stocks have saved an opening sell-off- sector +2% - FTSE 100 -40 points at 8.04am - ASTRA -1.5%, Tesco -0.9% - OIL stocks - av 0.5% 8.01am BST Middle East stock markets have already started the week badly, having opened on Sunday.The Dubai market tumbled 6.5%, as falling oil prices and growth fears sparked a wave of selling among traders, who were also reacting to Fridays big losses in Europe and the US. 7.59am BST Asian markets fell today despite better than expected Chinese trade data over the weekend.Associated Press has more details:Asian stock markets were lower Monday, shrugging off robust Chinese trade figures as investors exited riskier assets after concerns resurfaced about the global economic outlook.Hong Kongs Hang Seng fell 0.6 percent to 22,962.35 and Chinas Shanghai Composite slid 1 percent to 2,351.39. South Koreas Kospi dropped 0.8 percent to 1,926.18. Australias S&P/ASX 200 declined 0.6 percent to 5,159.00. Markets in Southeast Asia and New Zealand also dropped. Stock markets in Japan were closed for a holiday.Last week, the International Monetary Fund trimmed its global growth forecasts for this year and next, citing weakness in Japan, Latin America and Europe. The global economy will expand 3.3 percent this year instead of 3.4 percent and expand 3.8 percent in 2015. The IMF said recovery is weak and uneven in the advanced economies. 7.48am BST Terry Torrison, managing director at Monaco-based McLaren Securities, tells Reuters that traders are rather nervous after last weeks selloff:Were still looking quite poorly, on the markets. The nervousness is still there. I dont think anyone will want to come running back into the market early doors, 7.42am BST Good morning, and welcome to our rolling coverage of the financial markets, the world economy, the eurozone and business.Asia at afternoon... Sensex down 0.5% ASX ends down 0.6% HK, Kospi down 0.7% each Shanghai down 0.9% Taiex down 2.6% (!) $HSI $XJOEuropean equities look set to open sharply lower yet again following a terrible ending to U.S. equity trading on Friday and another lurch lower in Asia overnight, As the global recovery seems to become increasingly less certain...the risk off trade has become worryingly prevalent. Continue reading...
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