Archive for June, 2010

BP oil spill costs hit $100 million/day (Reuters)

Sunday, June 27th, 2010 | Finance News

LONDON (Reuters) –
BP said it had spent $300 million on its Gulf of Mexico oil spill response effort in the past three days, hitting the $100 million/day spend rate for the first time and bringing its total bill to $2.65 billion so far.

The figures, which BP released in a statement on Monday, include the cost of trying to cap the well, clean up the environmental damage caused by the leaking crude and pay compensation to those affected by the spill.

BP added it remained on track to complete its relief well, which aims to kill the leaking well at the point it meets the reservoir, in the three month timeframe initially envisaged, despite progress slowing on the well in recent days.

Last week, the well was being drilled at the rate of 1,000 feet per day, but the pace dropped to less than 100 feet a day over the weekend, as the delicate task of closing in on the leaking well is conducted.

(Reporting by Tom Bergin; Editing by David Holmes)

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Asian stock markets post muted gains (AP)

Sunday, June 27th, 2010 | Finance News

TOKYO – Asian stock markets mostly posted muted gains Monday as investors searched for fresh cues after a flat session on Wall Street and a pledge by world leaders to reduce budget deficits.

Japan's Nikkei 225 stock average fell 0.3 percent to 9,705.08 as a strong yen weakened exporters. The market also awaited key economic data this week on industrial production, unemployment, and the Bank of Japan's "tankan" survey of business sentiment. Australia's S&P/ASX 200 lost 0.5 percent to 4,389.40.

Meanwhile, benchmarks in South Korea, Taiwan and Singapore posted mild gains. Hong Kong's Hang Seng index climbed 0.6 percent to 20,809.71 and Shanghai Composite index added 0.3 percent to 2,559.59.

In a final statement from the top 20 industrial and developing nations at their weekend summit in Toronto, leaders endorsed a pledge by rich nations to slash budget deficits in half in three years. The deficit-cutting goal, however, was accompanied by concerns that cutting stimulus spending too quickly could stall the global recovery.

Before the weekend, U.S. bank stocks shot higher after an agreement on a financial regulation bill reassured investors that new rules won't devastate the profits of finance companies.

The response in Asia was more muted, with mixed performance by banks across the region. National Australia Bank Ltd. shed 1.2 percent, and Japan's Mizuho Financial Group Inc. was down 2 percent. South Korea's Woori Finance Holdings Co. advanced 2.3 percent.

The Dow Jones industrials ended down 0.1 percent at 10,143.81 Friday in New York, while the broader Standard & Poor's 500 index and the Nasdaq composite index both gained 0.3 percent.

In currencies, the dollar was trading at 89.38 yen from 89.33 late Friday. The euro rose to $1.2384 from $1.2371.

Benchmark crude for August delivery was up 35 cents at $79.21 a barrel in electronic trading on the New York Mercantile Exchange.

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Obama says US expects rise in China’s currency (AP)

Sunday, June 27th, 2010 | Finance News

TORONTO – President Barack Obama said Sunday that the United States expects the value of China's currency to rise significantly. He vowed to closely monitor over the next several months how China follows through on a pledge to introduce more flexibility in the management its currency.

Obama's comments at a summit of the Group of 20 industrial and developing nations came as Chinese President Hu Jintao took on critics of Beijing's currency policy by warning that wildly fluctuating currency exchange rates can threaten financial markets.

The value of the yuan, or renminbi (RMB), is a major irritant in China's relations with the United States.

American manufacturers complain that an undervalued Chinese currency gives China's exporters an unfair advantage by keeping the cost of China-made products artificially low.

Before the G-20, China tried to head off criticism by announcing that it would start allowing its currency to rise in value against the dollar. But senior Chinese officials have vowed during the economic summit that they would not bow to outside pressure to allow the currency to rise more quickly.

Critics in the U.S. Congress and elsewhere want bolder moves from China.

Obama said that the United States doesn't expect a large, immediate jump in the value of China's currency, which would be disruptive to the Chinese and world economies.

"We do expect that as more and more market forces come to bear, that given the enormous surpluses that China has accumulated, that the RMB is going to go up and it's going to go up significantly," Obama said. "And so we are going to be paying attention over the next several months to make that determination."

A G-20 communique Sunday didn't mention China's currency directly, only generally expressing a need for countries to have flexible currency exchange rates.

In a speech earlier Sunday, Hu didn't directly address complaints about the yuan's value.

But he warned of deep and serious global economic risks as "exchange rates of major currencies fluctuate drastically and international financial markets suffer from persistent volatility."

At a meeting Saturday between Obama and Hu, White House officials said Obama welcomed as a "first step" China's currency announcement. But Obama, the officials said, noted that implementation of the Chinese decision would be very important.

China has said its currency is at about the right level and that trade imbalances stem from other fundamental problems with the United States and other western economies.

Obama said he would work with congressional critics of China's currency and with American manufacturers. "We all have the same interest, and that is the United States can compete with anybody as long we've got an even playing field," Obama said.

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