Investors anxiously gaze at a share prices board in Tokyo on Monday.

LONDON, Nov. 12--World stocks hit 8-week lows while the yen surged to 18-month peaks versus the dollar on Monday as fears about credit-related losses at financial firms prompted investors to reduce bets on risky trades.
Asian markets fell sharply Monday as traders took their cues from Wall Street, where shares dropped Friday amid renewed concerns about US mortgage problems, AP wrote.
Hong Kong’s benchmark index declined as much as 4.6 percent, while Japan’s main index lost as much as 3.8 percent and South Korea’s Kospi fell as much as 4.5 percent.
“Basically, the supbrime loan issue still drags on, and there is no prospect of what can end the problem,“ said Shinichi Ichikawa, chief strategist at Credit Suisse. “As for the US economy, the risk of recession is increasing toward the next year,“ which, combined with higher oil prices, prompts players to sell the dollar, he said.
Fresh concerns about further losses linked to the fallout in the US subprime mortgage sector deepened over the weekend after Britain’s Sunday Telegraph newspaper reported HSBC would take a new $1 billion hit to results this week, Reuters said.
The report followed warnings on Friday by Bank of America Corp and JP Morgan Chase & Co) on fourth-quarter results and the revelation by Wachovia Corp of a potential $1.7 billion loss on mortgage-related debt.
The credit crunch, which started in August, has worried consumers and threatened to weaken corporate profits and derail growth in the world’s largest economy.
Fears of more misery in the financial sector also triggered broad unwinding of carry trades, where investors had sold the low-yielding yen to invest in higher-yielding assets.
“Risk reduction trades are over-riding fundamentals ... All the talk about subprime, that is clearly the driver,“ said Michael Klawitter, currency strategist at Dresdner Kleinwort in Frankfurt.
The FTSEurofirst 300 index was down a quarter percent, hitting an eight-week low. MSCI main world equity index also fell to its lowest since mid-September, down 0.7 percent on the day.
The dollar fell as low as 109.86 yen, while it kept some distance from record lows against the euro and against a basket of major currencies.

President Luiz Inacio Lula de Silva

RIO DE JanEiro, Brazil, Nov. 12--Brazilian President Luiz Inacio Lula de Silva said the discovery of reserves that may total as much as 8 billion barrels of oil and natural gas may lead the country to join the Organization of Petroleum Exporting Countries.
Brazil won’t join for at least five years, the amount of time its state-controlled oil company Petroleo Brasileiro SA needs to start output from the Tupi field, Lula said in Santiago on Saturday before leaving an Ibero-American summit.
Following Venezuela, a founder, and Ecuador, which is rejoining this month, Brazil will be the organization’s third South American member, Bloomberg wrote.
The field, where the UK’s BG Group Plc and Portugal’s Galp Energia SGPS SA are partners, may boost Brazil’s reserves by almost two-thirds, transforming it from a small net exporter into a major supplier to world markets. Still, it is premature for Lula to announce his intentions to enter OPEC since “there are huge technical challenges,“ said David Fleischer, a political science professor at the University of Brasilia. “Even though the markets loved the Tupi announcement, there’s no guarantee they’ll be able to make the field work,“ Fleischer said.
Chavez, who has sought to use his country’s oil wealth to counter US influence in the region, urged Lula during the summit to sell oil at below-market prices to poor countries. For Chavez, Brazil’s entry into OPEC could help unite the region.
Lula said his goal of entering OPEC would be “to reduce oil prices a little, because that is one of the contributions that the oil-rich countries can give.“
The discovery may allow Brazil to rival Venezuela in setting energy policy in the region and give it more leverage over Bolivia, the source of half of its natural gas, Fleischer said.
Tupi, the second-biggest field found in the last 20 years, holds almost as much as the 8.5 billion barrels of reserves of Norway. The field contains both oil and natural gas.
By the middle of the next decade Brazil may be producing as much as 1 million barrels of oil a day from the field, Petrobras Chief Financial Officer Almir Barbassa said. Petrobras must still do more work to confirm the size of the field, Barbassa said.

FRANKFURT, Germany,
Nov. 12--The European Union’s executive commission is a bigger threat to EU energy companies than Russia, the head of German energy giant EON was quoted Monday as saying in a press report, AFP wrote.
“You are always talking about Russia but the real threat is coming from the European Commission,“ EON chief executive Wulf Bernotat told the Financial Times.
Bernotat added however that he did not think commission plans to increase competition by breaking up big power groups through a process called unbundling would succeed because they were opposed by major EU members.
“I am pretty sure unbundling is not coming,“ he said. “Such processes in Brussels take time especially if important member states such as France and Germany are against it.“
Meanwhile, many in Europe have rung alarms over what they see as Russian intentions to dominate the European energy sector through investments by groups such as the state-controlled gas monopoly Gazprom.
EU officials want to increase competition in the energy sector by separating energy production and distribution activities, amid sharply rising prices that have sparked widespread debate in Germany. EON and rival RWE have a particularly dominant position in the country.
Over the weekend, EU Competition Commissioner Neelie Kroes argued again for liberalization measures, saying that “in Germany, prices are higher than you might expect in a market that was fully competitive.“
She added that the commission’s plan to break-up the two key activities of production and distribution was “indispensable“ if consumers were to benefit from the lower prices for gas and electricity that an open market could provide.
Germany has backed its big energy groups in the stand-off with EU officials, but Berlin has said that position could change if power groups did not make a bigger effort to increase competition and transparency within their operations.

PARIS, Nov. 12--The French government of President Nicolas Sarkozy vowed not to give in to striking unions Sunday, as the country braced for transport chaos during the coming week in a showdown over pensions reform.
For the second time in less than a month, railway and energy workers plan to down tools Wednesday to demand the maintenance of “special“ pensions systems, which the centre-right government has vowed to overhaul to bring in line with the rest of the country, AFP said.
With seven out of eight unions at the state-owned SNCF calling for strike action, rail traffic is likely to be badly hit from Tuesday evening. Paris commuters will bear the brunt as staff at the RATP metro and bus operator also stop work.
And Labour Minister Xavier Bertrand warned that the disruption could extend for several days, as some unions have announced an open-ended strike--rather than a 24-hour stoppage that took place on October 18. “Travelers should be ready for a strike that could last,“ he said.
In a tense social climate aggravated by other protests by students, lawyers and civil servants--as well as fears over the rising cost of petrol--there was speculation this week’s strikes could trigger a mass movement of anti-government protest.
In 1995 a similar attempt to end the pension’s privileges enjoyed by some 1.6 million people set off three weeks of strikes and demonstrations, culminating in a humiliating climb-down for then prime minister Alain Juppe.
But Prime Minister Francois Fillon said Sunday that the government could not abandon a promise that was clearly set out in Sarkozy’s election manifesto in May and which polls show is supported by a majority of the population.
“Carrying out reforms in France is always hard. But I know that a majority of the French want the country to modernize .... No-one can claim not be aware of what we planned to do. We announced it in the clearest possible way,“ Fillon told Le Journal du Dimanche newspaper.

SOFIA, Bulgaria, Nov. 12--Bulgaria said Sunday it has reached an agreement to cancel most of Iraq’s Soviet-era debt of $1.860 billion (1.267 billion euros) and receive the rest of the sum in cash.
“Bulgaria’s government approved on November 8 a deal with the Iraqi government concerning its debt of $1.860 billion,“ Finance Minister Plamen Oresharski told journalists. “The agreement is in line with the Paris Club commitment to ease the debt burden on the Iraqi government and previews that Bulgaria will receive a one-off payment from Iraq of $360 million (245 million euros) or approximately 30 percent of the principal sum by mid-2008,“ he added, AFP reported.
In 2004, Baghdad struck a deal with the Paris Club of creditors to cancel 80 percent of its foreign debt by agreeing to pay the remaining 20 percent over a period of 23 years plus a gratis period of six years.
“Bulgaria is the first country to reach an agreement to partly forgive Iraq’s debt but also to receive the rest of the sum in cash such a short time after signing the agreement,“ Oresharski said.
Iraq’s debt to Bulgaria amounted to a principal sum of $1.259 billion plus $601 million in interest. It was accumulated in the years before the fall of Communism in 1989 but has not been serviced since 1992.

SINGAPORE, Nov. 12--Oil prices fell by more than a dollar in Asian trade on Monday after OPEC kingpin Saudi Arabia indicated the oil group will discuss raising output if the need arises, dealers said.
At 10:35 am (0235 GMT), New York’s main contract, light sweet crude for December delivery, dropped 1.02 US dollars to 95.30 dollars a barrel from 96.32 dollars in late US trades Friday. Brent North Sea crude for December delivery eased 93 cents to 92.25 dollars, AFP reported.
Prices were pressured lower following the comments on Sunday by Saudi Arabia, the world’s biggest oil producer, and by Kuwait, that the Organization of the Petroleum Exporting Countries (OPEC), dealers said.
“OPEC has been unusually quiet during those sharp rises in oil prices over the past couple of weeks and so any talk of action out of OPEC would be calming news,“ said Victor Shum, an analyst with energy consultancy Purvin and Gertz.
Ali al-Nuaimi, the Saudi oil minister, told reporters during a short visit to Kuwait that talk of a hike in output is premature. “When OPEC meets, we will discuss this issue,“ he said.
OPEC is holding a summit in Riyadh on November 17-18 and ministers are also due to meet in Abu Dhabi on December 5.
Kuwait’s acting oil minister Mohammad al-Olaim said OPEC will “not hesitate to shoulder its responsibilities.“ He said the organization would be willing to increase output “if there is a need to raise production in accordance with market parameters.“
Comments by US Federal Reserve chairman Ben Bernanke last week that the US economy would likely slow in the first part of 2008 remained a source of concern for traders, who fear energy demand would be affected, dealers said. “With the cautionary comments coming last week from the US Federal Reserve about the fate of the US economy, that has provided a reason for traders to pull back the pricing,“ said Shum.

BEIJING, Nov. 12--European Union leaders will press China for faster action on its swelling trade gap and currency controls at a summit this month, the EU ambassador to China said Monday.
The comments reflect growing European urgency over China’s multibillion-dollar trade surpluses, an area where Washington long took the lead in lobbying Beijing for reforms, AP wrote.
“We want more attention to our specific needs, our specific concerns, in intellectual property, in product safety, in opening Chinese markets which are still not fully open, in welcoming our investment,“ Ambassador Serge Abou said at a news conference.
Asked whether the EU would coordinate more closely with Washington and imitate the United States in filing more complaints against China in the World Trade Organization, Abou said Europe had no fixed group of allies and sometimes was opposed by the United States on trade issues.
An EU delegation led by Prime Minister Jose Socrates of Portugal, which holds the presidency of the 25-nation group, is due in Beijing on Nov. 28 to Chinese leaders. A day earlier, finance officials from the two sides meet to discuss currency concerns.
European leaders will press Beijing for action to lower barriers to foreign investment and to let its currency, the yuan, rise more quickly in value, Abou told reporters.
Despite contentious trade issues, Abou said EU-Chinese relations are positive. He said the meeting was taking place in an air of optimism and self-confidence on both sides.
The wide-ranging agenda also includes discussion of closer European-Chinese cooperation in science, environmental protection and combating global warming, according to Abou.
The European Union is China’s biggest foreign trading partner, ahead of the United States and Japan, but Europe has seen its deficit with China swell quickly in recent years.
China ran a US$13.9 billion (9.5 billion euros) surplus with Europe on total two-way trade of US$31.4 billion (21.4 billion euros) in October, according to Chinese data released Monday. That was just behind China’s US$15.7 billion (10.7 billion euros) surplus with the United States on total two-way trade of US$26.7 billion (18.2 billion euros).