World Bank Cuts Global Growth Forecast as Euro Region Contracts: Economy

The World Bank cut its global growth forecast by the most in three years, saying that a recession in the euro region threatens to exacerbate a slowdown in emerging markets such as India and Mexico.

The world economy will grow 2.5 percent this year, down from a June estimate of 3.6 percent, the Washington-based institution said.

The euro area may contract 0.3 percent, compared with a previous estimate of a 1.8 percent gain. The U.S. growth outlook was cut to 2.2 percent from 2.9 percent.

U.S. Stock Futures Advance on IMF Lending Plan

U.S. stock futures advanced, indicating the Standard & Poor’s 500 Index will climb for a second straight day, as Goldman Sachs (GS) Group Inc. reported earnings that exceeded analysts’ projections.

Goldman Sachs, the fifth-biggest U.S. bank by assets, added 2.3 percent as the company cut costs in response to falling revenue. Yahoo! Inc. (YHOO) rallied 3.4 percent as Jerry Yang’s exit may remove a barrier to find a buyer or negotiate a sale of stakes in Asian assets worth more than $10 billion.

S&P 500 futures expiring in March added 0.3 percent to 1,293.30 as of 7:54 a.m. New York time. Dow Jones Industrial Average futures gained 31 points, or 0.3 percent, to 12,451.

U.S. Market Shrinks Amid Heavy Stock Buybacks

Stocks are getting scarcer in the U.S. for the first time since the bull market began as companies cut share sales to the lowest level since 2006 and buy back equity at the fastest pace in four years.

Amgen Inc. (AMGN), Hewlett-Packard Co. (HPQ) and 1,971 other U.S. companies repurchased $397 billion of stock last year, while they issued $169 billion of new equity, data compiled by Birinyi Associates Inc. and Bloomberg show.

The combination reduced the Standard & Poor’s 500 Index divisor, a measure of outstanding shares, by 0.6 percent last quarter, the first drop since March 2009.

Slowing China GDP Boosts Scope for Easing

China’s economy expanded at the slowest pace in 10 quarters as Europe’s debt crisis curbed export demand and the property market weakened, sustaining pressure on Premier Wen Jiabao to ease monetary policy.

Gross domestic product rose 8.9 percent in the fourth quarter from a year earlier, the statistics bureau said in Beijing today. Growth exceeded the 8.7 percent median of 26 estimates in a Bloomberg survey, staying above the 8 percent that signals a “soft landing” for China, according to SinoPac Financial Holdings Co., which correctly predicted the GDP number.

Wells Fargo Posts Higher Profit on Mortgages

Wells Fargo & Co., the largest U.S. bank by market value, posted a 20 percent increase in fourth- quarter profit, beating analyst estimates, with the company citing a boost from mortgage financing.

Net income rose to $4.11 billion, or 73 cents a share, from $3.41 billion, or 61 cents, a year earlier, the San Francisco- based company said in a statement today. That set a record and exceeded the 72-cent estimate of 31 analysts surveyed by Bloomberg.

Revenue declined 4 percent to $20.6 billion, beating the $20 billion forecast by analysts.

EMERGING MARKETS-Stocks at 2-month high on China; forint recovers

Emerging stocks leapt 2 percent to their highest in two months on Tuesday as better-than-expected Chinese growth numbers and a record rise in German economic sentiment revived risk appetite.

South Africa’s All-share index hit an all-time high while Hungary’s forint reversed a two-session loss, despite expectations that the European Commission will soon launch legal action against Budapest over its policies to curb the independence of its media, judiciary and central bank.

Pakistani stocks end up; rupee weakens; o/n rates down

Pakistani stocks rose more than 1.7 percent on Tuesday as investors capitalised on bargain prices for blue chip companies, such as Oil and Gas Development Co Ltd (OGDCL), after the market fell sharply last week, dealers said.

The Karachi Stock Exchange’s benchmark 100-share index ended 1.73 percent, or 192.51 points, higher at 11,305.16 on turnover of 53.11 million shares.

“A bullish trend was witnessed in stocks across the board at the KSE, lead by blue-chip oil and fertilizer shares,” said Ahsan Mehanti, director at Arif Habib Corp.

Last Thursday, the KSE-index ended at 10,909.12 points, its lowest close since Aug. 29.

Australian Banks to Cut 7,000 Jobs Over Two Years to Lower Costs, UBS Says

Australian banks may scrap 7,000 jobs in the next two years as the nation’s lenders cut costs that account for 58 percent of expenses to offset the weakest credit growth since World War II, according to UBS AG.

(UBSN)Lenders will reduce total staff numbers by 3.9 percent to 172,000 from 179,000, Sydney-based UBS analysts Jonathan Mott, Chris Williams and Adam Lee said in a note to clients dated Jan. 13. Those figures don’t include Australia & New Zealand Banking Group Ltd.’s Asian staff, they said.

Abu Dhabi’s ADIA keen to invest in India

Abu Dhabi Investment Authority, the sovereign wealth fund of the Abu Dhabi government, has expressed “keen interest” in investing in India, commerce ministry said on Monday.

The two sides have agreed to speed up the creation of a joint working group to facilitate the fund’s investment into Asia’s third-largest economy, the ministry said in a statement.

ADIA may invest in the country’s infrastructure sector, which will see a total of $1 trillion of investment in the next five years, commerce minister Anand Sharma said, according to the statement.

Singapore Exchange, China Sky in Courtroom ‘Test of Wills’

Singapore Exchange (SGX), where 40 percent of listed firms are based outside the city state, is going to court to enforce its listing rules for the first time after a Chinese company ignored a deadline to appoint a special auditor.

The exchange sued China Sky Chemical Fibre Co. and four of its Chinese directors on Jan. 6 to compel the Quanzhou City, Fujian-based company to have a special auditor investigate “interested party transactions,” a failed land acquisition and certain costs. A closed hearing was held today.