Morning business round-up: Intel woes hit chipmakers


What made the business news in Asia and Europe this morning? Here's our daily business round-up:

Shares in Asian makers of computer chips have fallen after Intel cut its revenue forecast.

Intel, the world's largest maker of microprocessors, said on Monday it was cutting its forecast due to a shortage of hard disk drives.

Severe flooding in Thailand, which has killed more than 600 people, has disrupted production of disk drives there.

Shares in South Korea's Samsung Electronics fell by 1.29%, while Hynix Semiconductor was 2.02% lower.

In other Asian news, mobile service provider China Mobile has been ranked as China's most valuable brand for a second year.

The survey, commissioned by advertising giant WPP, calculated the value of China's top 50 brands based on business performance and consumer feedback.

The rest of the top five slots were dominated by financial institutions, but technology and consumer goods brands were among the fastest risers.

The economic news in Europe continues to be dominated by the crisis in the eurozone and tensions with the UK over efforts to rescue the troubled single currency.

The head of the European Commission, Jose Manuel Barroso, has said the UK's demand for special treatment for financial services would have risked the single market.

Mr Barroso told the European Parliament the UK's stance had made compromise impossible at last week's EU summit on economic integration.

The UK vetoed treaty changes for the 27-member EU, arguing it had to protect Britain's financial services industry. But at least 23 other EU states agreed to forge ahead with deeper ties.

European companies are feeling the impact of the eurozone's woes. German energy firm E.On has taken a 3bn-euro ($4bn) charge due to exposures to troubled economies in southern and eastern Europe.

It said 2.1bn euros related to Spain and Italy, where it had cut forecasts for prices and demand, and where it expected more interventions by national regulators.

The company's share price fell 2.2% in early trading in Frankfurt.

Media caption,
Biz Heads

But the UK, which is in the EU but outside the eurozone, received some economic good news as figures showed that its persistently high inflation was continuing to ease.

The rate of Consumer Prices Index (CPI) inflation in the UK fell to 4.8% during November, down from 5% the month before, according to the Office for National Statistics (ONS).

The rate still remains well above the Bank of England's target of 2%.

Retail Prices Index (RPI) inflation - which includes mortgage interest payments - fell to 5.2% from 5.4%. The fall was partly due to a slowdown in the rise in food and non-alcoholic drink prices.

Outside the EU, the Swiss government has cut its 2012 growth forecast, blaming the economy's exposure to the eurozone crisis.

The expected growth rate was lowered to 0.5% from 0.9%.

The country is not expected to suffer a recession, provided the eurozone crisis does not worsen. But recession and deflation - falling prices - remain a concern.

Weak economic data in India caused the rupee to hit a new all-time low against the US dollar. The Indian currency fell to 53.42 to the dollar on Tuesday, down more than 10% since the start of 2011.

On Monday, Indian monthly factory output showed its first decline in October in more than two years, triggering a sell-off in shares.

In the latest edition of the Business Daily programme, historian Norman Davies reflects on whether the eurozone could collapse, as other empires have done in the past.

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