Korean tension rattles global markets

European and US stock-index futures fell and Asian equities dropped, indicating benchmark indexes may extend a global selloff, after North Korea fired artillery shells into South Korea.

BHP Billiton and Rio Tinto Group may follow their Sydney-traded shares lower as base metals fell in London. SAP might move after the world’s biggest maker of business- management software was said to be planning to cut its borrowing costs by more than half.

Futures on the Euro Stoxx 50 Index lost 0.8 per cent to 2,790 at 7:28 a.m. in London. European stocks retreated yesterday as Ireland’s request for a bailout failed to convince investors that the region has contained its resurgent debt crisis. FTSE 100 Index futures declined 0.7 per cent today and Standard & Poor’s 500 Index futures slid 0.8 per cent.

North Korea fired “several” artillery shells into South Korea near the two nations’ western border, South Korea’s Joint Chiefs of Staff said in a statement. South Korea returned fire, according to the statement on the Joint Chiefs’ website. South Korea put its military on high alert and will “respond strongly” to further provocation, according to the statement.

Most of North Korea’s shells fell into the water, with some landing on an island, Yonhap News said. It wasn’t clear if there were any casualties, according to the report.

US stocks fell yesterday, ending a three-day gain for the Standard & Poor’s 500 Index, as concern mounted that Europe’s sovereign debt crisis will spread and as federal agents raided hedge funds to probe insider trading.

Asian stocks fall

Asian stocks extended the retreat today, sending the MSCI Asia Pacific excluding Japan Index down 1.9 per cent as China’s benchmark money-market rate rose to the highest level in almost seven weeks.

The euro declined for a second day against the US dollar and the yen after Irish Prime Minister Brian Cowen late yesterday said he will seek national elections early next year after his government passes its 2011 budget. Investors speculated that the new election in Ireland will hinder the nation’s aid talks with the European Union and the International Monetary Fund.

BHP Billiton, the world’s largest mining company, lost 1.7 per cent to $43.14 in Sydney as copper, zinc and aluminum retreated on the London Metal Exchange. Rio Tinto Group also declined, falling 1.4 per cent to $83.53.

SAP, Sky Deutschland

SAP may move after two people familiar with the situation said the software maker plans to cut borrowing costs by about 60 per cent with a new 1.5 billion-euro （$2 billion） credit line.

Separately, an Oracle Corp. attorney told a federal jury that SAP should pay at least $US1.7 billion in damages for copyright infringement at a three-week trial in Oakland, California.

Sky Deutschland AG may move after said the German pay- television operator part owned by Rupert Murdoch’s News Corp. said the nation’s financial regulator found flaws in its statements regarding profit, credit risks and subscriber counts.

BaFin’s findings in the annual 2007 and first-half 2008 statements, if conclusive, may lead to corrected financial reports, fines and claims for damages, the company, based in Unterfoehring near Munich, said yesterday in a statement. Sky Deutschland called the claims “inapplicable” and will be legally reviewed.

Homeserve Plc may fall after Chief Executive Officer Richard Harpin announced plans to sell 29 per cent of his total interest in the company. Barclays Capital, the sole bookrunner, will place 16 million shares via an accelerated bookbuild. Liberum Capital is acting as co-bookrunner.