Morning business round-up: US debt fears rattle Europe


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

Moody's warning of the increasing possibility that the US may default on its debt gripped the European markets on Thursday.

All of the major share markets opened lower and gold hit an all-time high of $1,589.56 an ounce.

Italy, whose parliament is due to pass a package of new austerity measures over the next two days to try to tackle its debt problem, raised 2.97bn euros ($4.2bn; £2.6bn) in a bond auction.

However, it had to offer a record return of 5.9% on its 15-year bonds. The 4.9% yield offered on five-year bonds was the highest for three years.

Profits at KFC owner Yum Brands rose 10% thanks to another big rise in sales at its Chinese outlets.

Like-for-like sales at its Chinese outlets grew 18% in the three months to 30 April.

China now accounts for more than 40% of Yum's profits and success there offset a decline in the US, where sales fell 5% at KFC.

There was some contrasting economic data from Singapore and New Zealand.

Media caption,
Biz Heads

Despite experiencing a devastating earthquake in February, the New Zealand economy expanded by 0.8% in the first three months of the year, the fastest pace for more than a year.

The New Zealand dollar hit a 30-year high against the US dollar on the news.

The picture was very different in Singapore, however, where a fall in manufacturing activity caused growth to stall.

Growth was 0.5% in the three months to the end of June compared with a year earlier, a sharp decline from 9.3% growth in the previous quarter.

The Singapore authorities said the sharp turnaround was led by a drop in demand for semiconductor computer chips.

Our latest Business Daily podcast looks at the eurozone debt crisis and asks whether lenders should also feel some pain.

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