Morning business round-up: Eurozone risks increased

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

Mario Draghi, president of the European Central Bank (ECB), has told the European Parliament that "downside risks" to the eurozone economic outlook have increased.

He also said that temporary measures by the ECB, such as buying up government debt, would be limited.

In doing so, he restated the bank's central role of controlling inflation.

Mr Draghi said a "fundamental restatement" of the region's fiscal rules was key to restoring confidence.

European markets have opened flat after strong gains on Wednesday sparked by a plan by some of the world's biggest central banks to stimulate lending.

Earlier, Asian markets rose strongly, with Japan's Nikkei closing up 1.9%, South Korea's Kospi climbing 3.7% and Hong Kong's Hang Seng 5.6% higher.

Investors were buoyed by the co-ordinated action to offer commercial banks cheaper access to US dollars.

On Wednesday, China also said it would free up money for its banks to lend.

Markit's purchasing managers' index (PMI) of activity dropped to 46.4 last month, from 47.1 in October. A reading below 50 indicates contraction.

It is the fourth month in which the reading has fallen below 50.

Germany's manufacturing output fell at its fastest pace for more than two years, while France's reading was the lowest since June 2009.

The Bank of England's financial policy committee says banks must raise capital to withstand the downturn, particularly that caused by eurozone debt problems.

The governor of the Bank of England, Sir Mervyn King, said they needed to build up their capital buffers further to protect against an "exceptionally threatening" environment.

He also said this could involve raising capital by issuing new shares.

He also said banks should keep lending, but should cut dividends and bonuses.

Media caption,

Biz Heads

China's official Purchasing Managers Index (PMI) fell to 49.0 in November, the lowest level since March 2009.

The industry survey data comes amid concerns that a slowdown in the global economy may dent demand for Chinese goods and hurt its economy.

PMI is a key indicator of manufacturing activity and a reading below 50 shows contraction.

More than 99% of shareholders voted in favour of the deal, after the Australian government approved the sale last Sunday.

The deal now only needs the approval of the Victoria state Supreme Court before being completed.

SAB expects the takeover to go through before the end of the year.

They will do joint research on next-generation batteries for green cars.

BMW will also supply clean 1.6 and 2 litre diesel engines to Toyota, beginning in 2014 for models for the European market.

Bosses from the two companies said they are also discussing other medium and long-term collaborative projects.

This week's editions of Business Daily programmes report from the BRIC countries (Brazil, Russia, India and China). The latest edition takes a look at Russia, a leading global supplier of oil, gas and metals - but is it too dependent on those volatile commodity markets?

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