Japanese stocks fall on nuclear crisis, euro stabilises

(Reuters) – Japanese shares fell on Tuesday as workers struggled to contain the world’s worst nuclear crisis in decades, while the euro steadied after comments from the European Central Bank’s chief bolstered the view that it would raise interest rates soon.

Plutonium found in soil at the earthquake-stricken Fukushima nuclear plant added to anxiety over Japan’s protracted fight to prevent further radiation leaks.

Heightening the uncertainty for investors, some Japanese companies said there would be delays in reporting full-year financial results as they assessed the damage from the devastating quake and tsunami which hit the country’s northeast on March 11, and the impact of widespread power outages which are still preventing many firms from restarting production lines.

Shortages of key components made in Japan have forced some manufacturers, particularly auto makers, to cut back production in North America, Europe and parts of Asia.

Japan’s Nikkei fell 1.5 percent, while MSCI’s index of Asian shares outside Japan dipped 0.06 percent.

Shares of Fukushima’s operator Tokyo Electric Power (TEPCO) were untraded on a flood of sell orders on a newspaper report. The Yomiuri paper citing unidentified government sources said there is talk to temporarily nationalise the utility, which a top Japanese official denied.

“TEPCO is the ground zero of the problem,” said Adrian Foster, head of financial markets research Asia-Pacific at Rabobank International in Hong Kong. “This is disproportionately a Japan issue

A tepid session on Wall Street overnight reinforced investors’ aversion to piling back into riskier assets. Data showed U.S. consumers increased spending in February but much of the gain went to cover rising food and energy costs, giving the economy only a modest lift.

EURO FINDS FOOTING

In currency markets, the euro stabilised after ECB chief Jean-Claude Trichet said inflation in the euro zone was “durably” above the central bank’s target, reinforcing the view it will raise interest rates early next month. The move would boost the value of the single currency and returns on euro-denominated investments.

Still, the euro remained under pressure on the region’s festering sovereign debt problems and uncertainties stemming from Sunday’s loss of a key state election by Germany’s ruling party.

The euro last traded at $1.4075 , compared with $1.4078 late in New York on Monday. Early in the session, it was as high as $1.4088.

The yen firmed against the dollar as the discovery of plutonium leak at the Fukushima plant, together with the fighting in Libya and unrest in the Middle East, stoked some safe haven demand for the Japanese currency.

The dollar fell about 0.2 percent to 81.68 yen , moving further away from 82.00 — the March 18 high hit after the world’s major central banks intervened to stem the yen’s strength.

A steady euro fostered support for gold after losing ground on Monday. Spot gold was last $1,417.30 an ounce in tight-range trading, compared with $1,419.50 late in New York on Monday. It is 2 percent below the record high of $1,447.40 set on March 24.

World shares recover all of Japan disaster losses

(Reuters) – Global stocks inched higher on Thursday and are now higher than when Japan’s earthquake and tsunami struck, buoyed by confidence that the world economic recovery remains on track.

The euro also recovered early losses to trade a touch higher despite negative signs from banking and politics in Portugal and Spain, the two countries now at the centre of Europe’s continuing debt crisis.

The single European currency was set for its largest weekly slide since early January, after the Portuguese parliament rejected a series of austerity measures and prime minister Jose Socrates stepped down, although equity markets rallied after gains in the heavyweight mining sector offset losses elsewhere.

“Sentiment is still relatively good. The cycle is good. We are still mildly optimistic on the overall picture,” said Joost de Graff, senior portfolio manager at Kempen Capital Manageent in the Netherlands.

Surveys on Thursday showed economic recovery continued in March, shrugging off Japan’s disaster, although Middle East tensions are sending prices rocketing and the impact of public sector cutbacks in Europe is a risk.

The MSCI All-Country index was last up 0.1 percent. In Asia, Tokyo’s Nikkei fell 0.2 percent. It remains 8 percent below its close when the earthquake hit on March 11.

EU BAILOUT

Much of the anxiety over the euro zone’s debt problems had been soothed by the prospect of a longer-term reinforcement of the EU bailout fund.

But this has now been delayed until June, while Portugal faces what are viewed as unsustainable borrowing costs ahead of multi-billion euro bond repayments in April and June.

The premium investors demand to hold Portuguese debt rather than benchmark German Bunds hit euro-lifetime highs, while the premium to hold other peripheral debt also rose, reflecting the growing preference among bondholders to own higher-rated paper.

“If — and this is a big if — there is a bailout for Portugal, the question would be how it would be negotiated with a government in essentially a caretaker mode,” said David Forrester, currency strategist at Barclays Capital in Singapore.

The euro was last up 0.1 percent against the dollar at $1.4101, having fallen earlier to a low of $1.4049, while against the yen it was flat at 114.11 yen.

The yen itself was steady against the dollar at 80.95 yen, although market players are still wary Japan may intervene to sell the currency if the dollar breaches 80 yen.

Asia shares down, euro eases ahead of Portugal vote

(Reuters) – Uncertainty over the human and economic damage inflicted by Japan’s earthquake, tsunami and nuclear crisis weighed on Asia stocks on Wednesday, and the euro eased ahead of a parliamentary vote in Portugal that could see the government fall.

Major European share markets were expected to open down around 0.4 percent, according to financial bookmakers in London, while S&P 500 futures fell 0.3 percent, pointing to a weaker start on Wall Street.

Oil was steady, after gaining on Tuesday as violence in Libya and unrest in Yemen fuelled worries of supply disruptions. Turmoil in North Africa and the Middle East also supported safe-haven demand for gold.

Japan’s Nikkei fell 1.7 percent as investors took profits from a two-session bounce. Japanese stocks remain around 8 percent below their close on March 11, the day northeast Japan was struck by a 9.0 magnitude earthquake and 10-metre tsunami.

The disaster left more than 23,000 people dead or missing, crippled a nuclear power plant that has been leaking radiation and hit production at major companies such as Sony Corp and Toyota Motor.

A Japanese government report estimated the material damage from the disaster at around $200-$300 billion and said planned power outages would have a “significant” additional impact.

“It’s not that the market is ignoring fundamentals,” said Takashi Hiroki, chief strategist at Monex Inc. “We just simply don’t know them yet, as many companies are still gathering information about damage sustained during the disasters.”

Underlining the continuing risks, the United States became the first country to block food imports from parts of Japan due to radiation fears.

CAUTION PREVAILS

MSCI’s broadest index of Asia-Pacific shares outside Japan was flat, weighed down by the Japan crisis and following falls on Wall Street, where the Dow Jones industrial average lost 0.2 percent and the S&P 500 fell 0.4 percent.

“It’s fairly evident that while we have had added strength in our market, there is still caution out there, with the view that markets are not going to race up in any great hurry,” said Jamie Spiteri, senior dealer at Shaw Stockbroking in Australia.

Nervousness and volatility in the stock market supported Japanese government bonds, with benchmark 10-year futures rising 0.33 point to 139.73, while the 10-year yield fell 3 basis points to 1.215 percent.

“The incident is likely to slow Japan’s economic growth, so markets are expected to factor this in,” said Akito Fukunaga, chief fixed-income strategist at RBS Securities.

“I think the influence of the economic slowdown surpasses worries over Japan’s fiscal position in the JGB markets.”

Government moves GST bill in parliament

(Reuters) – The government introduced a nationwide Goods and Services Tax (GST) bill into parliament on Tuesday, but opposition to the move threatened to derail one what is one of the UPA’s most ambitious reforms of its second term.

In a sign of how corruption scandals are hindering the government, opposition lawmakers immediately forced an adjournment by demanding a debate on accusations Prime Minister Manmohan Singh lied to parliament about a cash-for-votes scandal.

The Hindu nationalist Bharatiya Janata Party (BJP) has accused Singh of misleading parliament after he denied a WikiLeaks cable that said his government paid bribes to lawmakers to win a confidence vote in 2008.

That controversy was the latest in a slew of corruption scandals, including accusations the government lost up to $39 billion in the selling of telecoms licenses for kickbacks, that have overshadowed Singh’s second term and halted most reforms.

The bill to amend the constitution and introduce a nationwide Goods and Services Tax (GST) aims to cut business costs and boost tax revenues. But it has been delayed by two years and it will almost certainly miss an April 2012 deadline for implementation.

The GST bill needs approval of two-thirds of parliament and half of the 28 states to become law. It will first go before a committee before returning to parliament for a vote, which is unlikely to happen in the current session that ends on Friday.

Many opposition-ruled states oppose the bill and there are worries the tax reform will give too much power to the central government over local states.

Further scandals and a host of state elections this year could close any window of opportunity for the controversial bill to be adopted.

While the government is unlikely to fall over the corruption scandals — no main party wants to go to the polls only two years after the last general election — the scandals have hit India’s investment climate and delayed a host of reform bills.

The BJP effectively halted the last session of parliament with its demands for a parliamentary probe into the telecoms scam, while the current budgetary session has seen several adjournments amid protests from the opposition over the WikiLeaks reports.

Other bills could also be introduced this session, including a land acquisition bill to make it easier to buy land for industry and infrastructure developments, as well as a bill that shares 26 percent of mining profits with local communities.

The current session will almost certainly see the formal passing of the budget despite proceedings being disrupted.

“Let the finance bill (budget) be passed, and then we can have a short discussion (on the Prime Minister),” Finance Minister Pranab Mukherjee, the government’s main troubleshooter, appealed to opposition lawmakers.

(Additional reporting by C.J. Kuncheria; Editing by Alistair Scrutton and Daniel Magnowski)

Google accuses China of blocking Gmail

(Reuters) – Google Inc on Monday accused the Chinese government of making it difficult for Gmail users to access the service in the country, the latest development in a rocky relationship between the two.

Google said any difficulty users in China may have faced in the past few weeks accessing its email service was likely to be the result of government blocks, a Google spokeswoman said in a statement.

“There is no issue on our side, we have checked extensively,” the spokesperson said in an emailed statement. “This is a government blockage carefully designed to look like the problem is with Gmail.”

Gmail users in China said they were still able to log in to their accounts, but were unable to perform tasks such as sending email and accessing their address books.

Google’s run-ins with the Chinese government began in January 2010, when the company said it was no longer willing to censor search results in the country. Previously, the company included a disclaimer on its China service that searches may not be complete because of local laws.

Searches for terms deemed sensitive by Chinese censors are routinely blocked. Chinese search engines such as that offered by Baidu Inc already voluntarily filter searches.

This is not the first time Google has accused China of interfering with its services. In January, Google said it had uncovered sophisticated China-based attacks on human rights activists using its Gmail service around the world.

The months-long censorship dispute that Google had with the Chinese government was a diplomatic flashpoint in Sino-U.S. Relations in 2010.

China’s foreign ministry did not immediately respond to a faxed inquiry.

Censorship of Web content has intensified in China following calls on foreign websites for a “Jasmine Revolution”, which are anti-government gatherings inspired by demonstrations in the Middle East and North Africa.

(Reporting by Kelvin Soh in Hong Kong, Sui-Lee Wee in Beijing and Sakthi Prasad in Bangalore; Editing by Chris Lewis)

WHO warns of "serious" food radiation in disaster-hit Japan

(Reuters) – The World Health Organisation said on Monday that radiation in food after an earthquake damaged a Japanese nuclear plant was more serious than previously thought, eclipsing signs of progress in a battle to avert a catastrophic meltdown in its reactors.

Engineers managed to rig power cables to all six reactors at the Fukushima complex, 240 km (150 miles) north of Tokyo, and started a water pump at one of them to reverse the overheating that has triggered the world’s worst nuclear crisis in 25 years.

Some workers were later evacuated from one of the most badly damaged reactors when smoke briefly rose from the site. There was no immediate explanation for the smoke, but authorities had said earlier that pressure was building up at the No. 3 reactor.

Smoke was also seen at the No. 2 reactor.

The March 11 earthquake and tsunami left more than 21,000 people dead or missing and will cost an already beleaguered economy some $250 billion, making it the world’s costliest ever natural disaster.

The head of the U.N. atomic agency said the nuclear situation remained very serious but it would be resolved.

“I have no doubt that this crisis will be effectively overcome,” Yukiya Amano, director general of the International Atomic Energy Agency (IAEA), told an emergency board meeting.

“We see a light for getting out of the crisis,” a Japanese government official quoted Prime Minister Naoto Kan as saying.

But news of progress at the nuclear plant was overshadowed by mounting concern that radioactive particles already released into the atmosphere have contaminated food and water supplies.

“Quite clearly it’s a serious situation,” Peter Cordingley, Manila-based spokesman for the World Health Organisation’s (WHO) regional office for the Western Pacific, told Reuters in a telephone interview.

“It’s a lot more serious than anybody thought in the early days when we thought that this kind of problem can be limited to 20 to 30 kilometres … It’s safe to suppose that some contaminated produce got out of the contamination zone.”

However, he said there was no evidence of contaminated food from Fukushima reaching other countries.

Fukushima is the world’s worst nuclear accident since Chernobyl, but signs are that it is far less severe than the Ukrainian disaster.

“The few measurements of radiation reported in food so far are much lower than around Chernobyl in 1986, but the full picture is still emerging,” Malcolm Crick, secretary of the U.N. Scientific Committee on the Effects of Atomic Radiation, told Reuters.

Congress, Trinamool reach deal on West Bengal polls

(Reuters) – The Congress party and ally Trinamool Congress on Monday agreed to jointly contest the West Bengal election, party officials said, ending a stand-off that threatened to strain the embattled coalition.

But in a sign of Congress’ weaker position, the party had to concede to Trinamool’s demands over the number of candidates each party would field in the state where the Left has ruled for over three decades.

Prime Minister Manmohan Singh’s government needs the support of Trinamool’s 19 MPs to maintain its slim majority in the 545-strong Lok Sabha and the differences had sparked off some concerns over the stability of the government.

Congress is banking on a good showing in this and four other state polls to ease the pressure on it following a series of corruption scandals and high food prices.

“We are confident this alliance will give a chance to the people of West Bengal to end the misrule of the (Communist) government,” senior Congress leader Shakeel Ahmed said.

Congress would fight in 65 of the state’s 294 constituencies, he said, below its initial demand for as many as 98 seats and one place more than what Trinamool had offered last week.

The alliance, led by Trinamool chief and Union railway minister Mamata Banerjee, is widely expected to win the elections spread across April and May. Results are due May 13.

The latest episode recalled a similar deadlock earlier this month with the Dravida Munnetra Kazhagam (DMK) over polls in Tamil Nadu, but unlike DMK, Trinamool did not threaten to pull out from the government.

(Reporting by C.J. Kuncheria; Editing by Alistair Scrutton)

China Premier says hopeful on U.S., EU, world economies

(Reuters) – China Premier Wen Jiabao said on Monday he was optimistic about the outlook for the U.S., European and world economies.

Wen, who was speaking to a group of foreign company executives at a meeting in Beijing, also said he was “surprised and shocked” when he saw oil prices exceeding $100 a barrel this year, according to a pool report.

He said unrest in the Middle East and loose monetary policies in “some countries” had caused the spike in energy prices.

(Reporting by Reuters Beijing; Editing by Simon Rabinovitch)

BSE Sensex slips 0.2 pct as Libya, oil worries weigh

MUMBAI (Reuters) – The BSE Sensex edged 0.2 percent lower in a choppy trading session on Monday as an escalating Libyan crisis and firm oil prices weighed on investor sentiment.

Oil prices rose by more than 1 percent on Monday as a United Nations mandated wave of air strikes on Libya and proliferating unrest in the Middle East fanned concerns about oil supply from the region.

The 30-share BSE index closed 0.22 percent, or 39.76 points, lower at 17,918.59 points, with 17 of its components declining. It rose as much as 0.7 percent early.

“People are cautious. The situation in Libya is worsening and all eyes are on oil prices. Let us see how the situation unfolds,” said Deven Choksey, managing director and CEO of KR Choksey Shares.

The benchmark index is already down 13 percent year-to-date, making it one of the worst performing major markets in 2011.

The broader MSCI’s measure of Asian markets other than Japan is down 4.1 percent in 2011, while MSCI’s emerging markets index has shed 3.7 percent in the period.

Foreign funds have pulled out $1.8 billon from Indian equities since the start of the year up to March 17, pestered by sticky inflation.

Amongst the BRIC nations, Indian witnessed highest net redemption at $183 million in the week to March 16, fund tracker EPFR said.

Global equity funds at large faced outflows in that week as the Japan disaster combined with a bloody revolt in Libya, protests in Bahrain and the downgrading of Portuguese debt undermined investor appetite.

Airline companies closed in the red on fears the firm oil prices will dent their margins. Carriers Jet Airways and SpiceJet dropped nearly 3 percent and 1percent,

respectively. Oil explorer Cairn India advanced 1 percent.

Outsourcers dropped with the sector index declining 0.7 percent.

“Software stocks are richly valued, relative to other sectors. So, when FIIs (foreign institutional investors) are selling India, they are trimming their exposure to IT as well,” said Rakesh Rawal, head of private wealth management at Anand Rathi Financial Services.

“There is nothing otherwise wrong with the sector.”

Top outsourcer Tata Consultancy Services declined nearly 1 percent, while Infosys and Wipro dropped 0.7 percent and 1.3 percent, respectively.

Microsoft says helps take down spam e-mail network

(Reuters) – Microsoft Corp claimed credit on Thursday for taking down one of the biggest producers of spam e-mail in a joint effort with federal authorities across the United States.

The world’s biggest software company said its legal action against the operator of the Rustock ‘botnet’ — or network of infected computers programmed to send spam e-mail — led to raids across the country on Thursday which effectively shut the network down.

Tech security bloggers who follow the activities of botnets worldwide noticed earlier on Thursday a sharp dip in spam e-mail coming from the Rustock network, which some estimate is responsible for almost half of the spam appearing in inboxes. However, they warned that total eradication requires long-term efforts.

After getting the go-ahead from federal court in Seattle, where Microsoft had filed a lawsuit against the botnet’s operators, the company said it worked with the U.S. Marshals Service to raid hosting providers in seven U.S. cities early on Thursday, including Denver, Dallas, Chicago, Seattle and Columbus.

“With help from the upstream providers, we successfully severed the IP addresses that controlled the botnet, cutting off communication and disabling it,” said Richard Boscovich, senior attorney at Microsoft’s Digital Crimes Unit in a blog post on Microsoft’s site.

“This case and this operation are ongoing and our investigators are now inspecting the evidence gathered from the seizures to learn what we can about the botnet’s operations.”

Microsoft thinks there may be a million computers infected with Rustock malware, sending out as many as 30 billion spam e-mails per day, without their users’ knowledge.

Botnet operators get access to the computers through ‘malware’ downloaded onto PCs usually through an advertisement on a website.

The Rustock network was responsible for many of the fake lottery scam and pharmaceutical offers that e-mail users have become familiar with.

Microsoft said it was now working with Internet service providers and response teams around the world to help users get the Rustock malware off their computers.

(Reporting by Bill Rigby; Editing by Richard Chang, Bernard Orr)