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Financial Focus

Euro panic spread to Germany as investors shunned a bund issue yesterday, sending a shudder through debt, stock and currency markets.

GEORGE OSBORNE will next week hang a “for sale” sign over British infrastructure projects worth tens of billions of pounds, as he attempts to tempt UK pension funds, oil-rich Gulf states and other sovereign wealth funds to pay for new roads, railways, housing and other projects.

WINE has outperformed equities, gold and oil, according to the latest monthly figures. A report from The Bordeaux Index revealed wine is the asset class that lost the least value in October. The FTSE 100 lost 8% last month, and the Dow Jones index fell 9.5% – but wine was the most defensive asset losing only 4.3%, while gold fell 5.6% in October.

MARKETS:

THE FTSE 100 fell yesterday, after downbeat data from China, Europe and the United States darkened the outlook for global growth and corporate earnings. London’s blue-chip index closed at its lowest level since October the 6th, falling 67.04 points, or 1.3%, to 5,291.26. The index has now fallen 7.3% in November as worries have grown that Europe’s debt crisis could be terminal for the euro and would damage corporate earnings.

The NIKKEI 225 average fell more than 1.5% to its lowest intraday level since April 2009.It dropped to 8,186.06, while the broader Topix index lost 1.4% to 707.92. WALL STREET had its sixth straight losing day yesterday ahead of the U.S. Thanksgiving holiday and Tokyo markets which were also closed for a holiday were catching up with losses overseas.

CURRENCIES:

THE YEN rose against most of its 16 major counterparts before a German report forecast to show a gauge of business confidence dropped for a fifth month, increasing the allure of the Japanese currency as a haven. The yen touched a six-week high against the euro as Italy prepares to sell bills tomorrow after Germany failed to get bids for 35% of the 10-year government bonds that it offered for sale yesterday.

ENERGY:

OIL climbed in New York as declining crude stockpiles in the U.S. countered concern that Europe’s worsening debt crisis will threaten the region’s economy. Futures gained as much as 0.5%, retracing some of yesterday’s 1.9%. U.S. crude inventories dropped last week to the lowest since January 2010, according to an Energy Department report yesterday. Goldman Sachs Group Inc. raised its oil-price forecast for the first quarter of 2012.

COMMODITIES:

SHRINKING cocoa harvests in West Africa, the largest producing region, are diminishing a glut of beans just as sales of chocolate confectionery exceed $100 billion for the first time ever. Global supply will decline 7.7% in the year to September, shrinking the surplus to 32,000 metric tons, from 434,000 tons a year earlier, according to Marex Spectron Group Ltd.



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