Business

ISTANBUL — Turkey's lira on Thursday set a new record low against the US dollar as investors worried about the government's economic policies and dollar reserves appeared to be running low.

The lira was trading at 7.28 against the greenback around 10:30 GMT, suffering a loss of more than 3 per cent since the start of the day -- the lowest since May when it reached a then-record low of 7.24.

The currency also recorded its lowest level against the euro, trading near 8.60 against the European currency at 10:30 GMT.

The new fall comes as markets worry about a meltdown in the foreign currency reserves at Turkey's central bank, which appears to have spent lavishly in recent months to prop up the national currency.

State banks were also pushed to sell dollars to help the weakening lira.

An economic slowdown due to the novel coronavirus pandemic hit Turkey hard just as it was trying to recover from its first recession in a decade.

Turkey's central bank -- which is nominally independent but often the target of government pressure -- has lowered interest rates to 8.25 per cent from 24 per cent since July last year, to the dismay of many foreign investors.

President Recep Tayyip Erdogan has repeatedly called for lower interest rates to promote growth at the expense of reining in inflation.

He once called high rates the "mother and father of all evil."

July's annual inflation rate was 11.76 per cent, down from 12.62 per cent in June, according to official data, but still well above the government's own year-end inflation target of 8.5 per cent.

The Turkish economy was struck by a currency crisis in 2018 over escalating tensions with its NATO ally the United States, which propelled emergency rate hikes by the central bank.

FRANKFURT AM MAIN — German prosecutors said on Thursday they have filed fraud charges against three former board members at Audi and a retired senior employee, the latest legal woes for the automobile company over the "dieselgate" scam.

Audi's parent company Volkswagen admitted in 2015 to cheating emissions tests on 11 million vehicles worldwide. Software built into motors made the cars appear to spew fewer harmful pollutants in the lab than on the road.

The scandal plunged VW into an unprecedented crisis and a tangle of legal problems.

"The four defendants are accused of fraud, indirect false certification and criminal advertising," Munich prosecutors said, without naming any of the individuals.

Separately, former Audi chief executive Rupert Stadler faces similar charges and is already due to appear in court from September 30.

Emissions cheating 

The former senior employee charged Thursday is accused of having initiated the development of engines for Audi, VW and Porsche vehicles equipped with so-called "defeat devices" that enabled the cheating, according to prosecutors.

The former board members are accused of having known about the manipulations and initiated or failed to prevent further sales of affected Audi and VW vehicles at various times between October 2013 and September 2015.

Prosecutors say one of them lied to Audi about their involvement in the manipulations ahead of their promotion to the board in 2016.

The charges relate to a total of 434,420 Audi, VW and Porsche cars sold mainly in the United States and Europe.

Audi confirmed the charges in a statement, saying it would continue to "cooperate fully with the investigating authorities in order to reconstruct the circumstances that led to the diesel crisis".

The scandal has cost VW, the world's biggest automaker with a dozen brands, more than 30 billion euros ($34 billion), for the most part in the United States.

VW has paid some $9.5 billion in compensation since 2016 to US motorists misled by the cheating.

Former Audi chief executive Stadler will be the first auto boss to appear in the dock over the scandal.

Stadler, 57, had been chief executive at Audi for 11 years when he was arrested in June 2018.

He spent four months in pretrial detention over concerns he could try to influence witnesses.

Compensation deals 

Former Volkswagen CEO Martin Winterkorn, who was in charge of the car group when the cheating was uncovered, has also been charged and is awaiting trial.

Former Audi and VW director Axel Eiser was arrested in Croatia in June on the basis of an international arrest warrant issued by the US.

A major court case continues by investors demanding compensation for the plunge in value of their VW shares after "dieselgate" came to light.

But the VW group has drawn a line under most other cases in its home country.

Present chief executive Herbert Diess and supervisory board boss Hans Dieter Poetsch are off the hook on charges of market manipulation, after VW paid a total of nine million euros to settle the charges.

In February, VW struck a compensation deal with German consumer groups representing owners of cars caught up in the dieselgate scandal.

The 830 million euro deal fended off a class action lawsuit brought by 400,000 diesel car drivers.

Meanwhile, other carmakers have also been caught up in the scandal.

Sites across Europe were raided in July over suspicions that Fiat Chrysler and Iveco could also have fitted cars with illegal defeat devices.

SAN FRANCISCO — Samsung on Wednesday unveiled an upgraded version of its folding smartphone along with other devices aiming to jump-start sales in a market hit hard by the global pandemic.

The Galaxy Z Fold2 was one of several new devices announced at a livestreamed event by the South Korean electronics giant, which recently lost the top position in the smartphone market to China-based Huawei.

Samsung also unveiled two versions of its oversized smartphone, the Galaxy Note20 and Galaxy Note20 Ultra, upgraded tablets called Tab S7 and S7+, a new Galaxy Watch3 smartwatch and its ergonomic wireless earbuds called Galaxy Buds Live.

"Never before have we relied on technology like we are today. It's how we are staying connected as we navigate the extraordinary challenges faced around the world," said T.M. Roh, head of mobile communications at Samsung Electronics.

"Technology must make life easier, not more complex. That's why we have introduced five new power devices. Alone, these devices are powerful tools to help you maximise work and play."

Samsung in the second quarter saw smartphone sales slip 29 per cent compared with a year ago, according to research firm IDC, as the firm lost the top position to Huawei in a slumping global market.

Total smartphone sales were down 16 per cent in the quarter, as consumers pulled back in the face of a pandemic-induced economic crisis.

The upgraded folding device offers "the power and screen size of a tablet," with a cover screen of 15.7 centimetres and a main screen of 19.3 centimetres. Pricing and availability will be announced in September.

The Galaxy Note20 will be available later this month in the US starting at $999.99.

The launch follows the release of budget-priced smartphones from Apple and Google starting under $400 offering an alternative to the high-end devices.

Apple's flagship iPhone 12 is expected to launch later this year.

LONDON — Stock markets on both sides of the Atlantic climbed on Wednesday after a mixed Asian showing, with hopeful traders tracking talks on a key US stimulus package. 

Uncertainty about the global economic outlook caused by the coronavirus pandemic, meanwhile, caused investors to hedge their bets, helping gold to fresh highs day after the haven asset broke through $2,000 per ounce for the first time.

"Stocks are back in rally mode," said Chris Beauchamp, chief market analyst at the IG trading group.

"That both equities and the supreme risk-off asset [gold] are moving higher just shows how conflicted investors are — they can't avoid being tempted by equities, but they can also read the unending stories of bankruptcies," he added.

Among upbeat news in Europe were strong rebounds for the UK services sector and sales of new cars after both plummeted during the country's lockdown.

The IHS Markit/CIPS Services purchasing managers' index (PMI) for Britain rose to 56.5 in July from 47.1 in June.

A reading above 50 indicates an expansion, and July's rebound indicated "the very early stages of recovery... from an exceptionally low base", said Tim Moore, economics director at IHS Markit.

 'Bulls engaged' 

Most of the markets' focus was on the United States, where Republicans and Democrats are negotiating over a fresh economic rescue package, with some reports suggesting decent progress.

"The political wrangling has been going on for over one week, but dealers are still a little optimistic that an agreement will be reached," said David Madden at CMC Markets. 

"It was reported that talks have been productive, so that has been keeping the bulls engaged."

But ongoing China-US tensions prevented traders from getting too invested in equities.

"Rising trade tensions between the US and China could open up an unwelcome can of worms," said Stephen Innes at AxiCorp. 

"The market's primary thesis on what ultimately matters for growth assets is whether a US-China geopolitical escalation morphs into an economic dustup."

LONDON — BP plunged into a quarterly net loss of almost $16.85 billion as the coronavirus pandemic ravaged oil demand and prices, triggering huge asset writedowns, the British energy company said on Tuesday.

The company responded by cutting its dividend for the first time since the Deepwater Horizon oil rig disaster in 2010 that damaged BP's finances and reputation.

"The ongoing severe impacts of the COVID-19 pandemic continue to create a volatile and challenging trading environment”, BP said in Tuesday's earnings statement.

"Looking ahead, the outlook for commodity prices and product demand remains challenging and uncertain," it added.

The quarterly loss after tax of nearly $16.85 billion compared with net profit of $1.82 billion in the second quarter of 2019, BP said.

"In particular, our reset of long-term [oil] price assumptions and the related impairment and exploration write-off charges had a major impact" this time around, said chief executive Bernard Looney. 

Looking to save cash, the group announced a quarterly dividend of 5.25 US cents per share, down from 10.5 cents in the first quarter.

Nevertheless, BP's share price surged 7.5 per cent in London midday deals.

"For quite some time now there has been ongoing speculation about the sustainability of BP's dividend, against a backdrop of rising debt levels and concern around the company's ability to continue to pay it in a world of lower oil prices, so this... decision to reduce the pay-out is welcome," said Michael Hewson, chief market analyst at CMC Markets UK.

BP rival Royal Dutch Shell last week posted a net loss of $18.1 billion for the second quarter.

Greener future 

Alongside its results, BP set out details on how it expects to achieve "net zero" carbon emissions for the company by 2050.

Switching from an international oil company to an "integrated energy company", BP said that over the next decade its oil and gas production is expected to fall by at least one million barrels of oil equivalent a day, or 40 per cent when compared with 2019 levels. 

"This coming decade is critical for the world in the fight against climate change, and to drive the necessary change in global energy systems will require action from everyone," Looney said. 

The Irish national, who became CEO of BP in February, had previously said he wanted "net zero" carbon emissions for the company by the middle of the century.

Looney took over the helm this year shortly before the tenth anniversary of the explosion on the BP-leased Deepwater Horizon rig in the Gulf of Mexico that triggered the worst oil spill in US history.

The disaster killed 11 employees and cost the British firm tens of billions of dollars in damages and compensation, including $1.1 billion for the latest quarter.

Greenpeace's senior climate campaigner Mel Evans on Tuesday described BP's target to slash oil output by 2030 as "a necessary and encouraging start".

'Massive writedowns' 

In the immediate future, BP will focus on rebuilding its finances and Looney has already decided to axe around 10,000 jobs, or 15 per cent of its global workforce owing to the coronavirus fallout on energy demand and prices.

After companies worldwide closed their doors and airlines grounded planes at the height of the COVID-19 outbreak towards the end of the first quarter, oil prices dropped off a cliff, even briefly turning negative.

However, prices have rebounded sharply in recent months to around $40 a barrel as governments ease lockdowns and businesses slowly reopen.

"The collapse in oil prices has hit BP's profits hard," Hargreaves Lansdown equity analyst Nicholas Hyett said Tuesday. 

"The oil major now expects oil prices to hover between $50 and $60 a barrel for the next 30 years, and that's meant massive writedowns in the value of the group's oilfields."

BP recently announced the sale of its petrochemical business to privately-owned rival Ineos for $5.0 billion.

NEW YORK/ LONDON — Gold prices hit $2,000 an ounce for the first time on Tuesday, the latest surge in a commodity seen as a refuge amid economic uncertainty.

The precious metal hit the symbolically important benchmark near 16:15 GMT before retreating somewhat. 

Gold prices have risen more than 30 per cent this year as the coronavirus outbreak has weakened the economy and clouded the outlook.

Earlier, Asian stocks rallied following another record close on Wall Street, with investors cheered by forecast-beating US data and hopes for fresh stimulus for the world's top economy, while European equities traded narrowly mixed.

The dollar was largely higher and oil prices slid 2 per cent.

Tech fuelled a surge in New York, sending the Nasdaq to a new all-time high on Monday, as traders looked for firms likely to benefit from people being forced to stay or work from home.

There was also a cheer for figures showing the US manufacturing sector expanded last month at its fastest pace since March last year, which followed strong factory readings from China and Europe.

Still, AxiCorp's Stephen Innes said: "The composition of China's economic recovery offers a roadmap to the rest of the world that is not especially bullish for a consumer-driven rebound.”

"It's easier to normalise the supply-side of the economy than the demand side in a post-pandemic-shock environment."

Attention is now on Washington, where Democrats and Republicans are battling to hammer out a new package to save the US economy from the ravages of the pandemic.

With extra unemployment benefits and a moratorium on evictions now dried up, there are worries millions of Americans will suffer if nothing is passed soon, which would batter the already stuttering economy.

Democrat House Speaker Nancy Pelosi said a meeting with Treasury Secretary Steven Mnuchin and White House chief of Staff Mark Meadows had been "productive".

Expectations for a deal

In the Senate, Chuck Schumer said both sides were "moving closer" but added there were a "lot of issues that are still outstanding".

Reports said Donald Trump, facing an election in November and trailing in polls, was considering using an executive order to re-impose the ban on evictions and push through a payroll tax cut.

Leaders of top companies including Walmart, Facebook, Microsoft, Google-parent Alphabet and Starbucks urged lawmakers to push a deal through, warning of a "catastrophic" impact on the economy and employment if a new round of federal aid is withheld.

While Washington was locked in dispute, there was still an expectation they would reach a consensus.

"There's a big desire from both parties to get some kind of stimulus passed. I think the market is expecting that," said Bob Phillips, at Spectrum Management Group.

 Rodrigo Catril of National Australia Bank added: "For now it seems that the market is travelling with the expectation that a deal will eventually be struck, so it is a matter of when not if."

LONDON — EasyJet flew into an expected loss during its third quarter as the coronavirus pandemic kept the bulk of planes grounded, the British no-frills airline said on Tuesday.

The group reported a pre-tax loss of £324.5 million ($419 million, 355 million euros) in the three months to June, its third-quarter.

This compared with profit of £174 million a year earlier.

But EasyJet, which returned to the skies on June 15 with a very limited schedule, said it had been encouraged by the level of recent customer demand.

"Our bookings for the remainder of the summer are performing better than expected and as a result we have decided to expand our schedule over the fourth quarter to fly about 40 per cent of capacity," said Chief Executive Johan Lundgren. 

The carrier had previously forecast 30 per cent capacity.

EasyJet shares soared 8 per cent in early London trading on Tuesday following the trading update.

However at just short of 550 pence, its stock price remained hugely down on its pre-pandemic level of around 1,500 pence.

EasyJet, whose entire fleet was grounded on March 30 owing to the pandemic, carried just 117,000 passengers in the final two weeks of June. 

That compared with more than 26 million passengers flown between April and June 2019.

"We have now completed more than one month of restart operations and are seeing encouraging performance across the network with a continued focus to undertake only profitable flying," the airline said Tuesday. 

"In July, EasyJet flew just over two million passengers."

In May, the group announced plans to axe up to 4,500 jobs, or almost one third of its staff, owing to the dramatic slump in demand that has caused airlines worldwide to take similar measures.

NEW YORK — General Motors reported a smaller-than-expected loss on Wednesday as strong pricing for some newer auto models partially mitigated the hit from much lower sales amid the coronavirus pandemic.

The big US automaker lost $758 million in the second quarter, compared with a $2.4 billion profit in the year-ago period. 

The company described the results as "solid" amid the pandemic, and said steps it had taken to cut costs meant the automaker was well-positioned to weather the storm.

GM said some of the austerity measures, which included worker furloughs, would become permanent.

"We have a track record of making swift and strategic decisions to ensure our long-term success for the benefit of all our stakeholders," GM Chairman and CEO Mary Barra said in a statement.

"We will continue to drive the necessary change throughout the company to enable growth as we prepare to deliver a world with zero crashes, zero emissions and zero congestion."

Strong truck and SUV sales continued to support US results, GM said, but US sales were down 34 per cent due to the COVID-19-imposed production shutdowns.

Sales in China were down just 5.3 per cent while global sales fell 24 per cent, the company said.

Revenues were below expectations at $16.8 billion but the results translated into a loss of just 50 cents per share, far better than the expected hit of $1.77 a share. 

Shares of the auto giant rose nearly four per cent in pre-market trading.