welcome back. this is business briefing. i'm sally bundock. as one big rating agency puts a dozen italian banks and several major companies on negative ratings watch, it's populist parties are in talks to try to find some fresh way to form a government. and is india still the world's fastest growing economy? we'll find out later today. a quick look at the markets. they are allup as a quick look at the markets. they are all up as you can see. shrugging off those fears of what is happening in italy. ratings agency moody's has put a dozen italian banks and several major companies on negative ratings watch which could lead to a downgrade. meanwhile the country's populist parties are in talks to see if they can find some fresh way to form a government. their initial attempt was scuppered earlier this week, when the president rejected their nomination of a eurosceptic economy minister.

the two populist parties, the five star movement and the league, together control more than half the seats in parliament. here you can see them in yellow and green. they've said they'll reject any attempts by technocrat carlo cottarelli, who's been nominated by the president, from forming a government. they've a raft of economic policies to roll back austerity, including a basic monthly income for less well off families, who would receive $919 per month. the parties would also abolish plans to incrementally raise the retirement age. they plan to address italy's enormous government debt — not through spending cuts but by, quote, "reviving internal demand". but what makes investors nervous is their position on the euro. both parties have dropped their plans to have a referendum, but neither remain a fan of the single currency. with me is christel aranda—hassel, chief european economist at mizuho securities. welcome to you. good to see you this

morning. what is your take on moody ‘s placing a dozen italian banks and several companies on negative ratings watch? it is not a surprise. it is very well known about italy is still struggling with the amount of non—performing loans. quite a bit has happened already. italy has come on board as well and has been addressing the amount of non—performing loans on balance sheets. but the decline has started to happen. we are still lagging compared to some other countries who have put their houses in order earlier, for example be spanish banks, aurally started, on the back of that, obviously, if yield spike in sucha of that, obviously, if yield spike in such a way then ratings agencies rightly have got to take a look at —— look at it, because quite a bit of the government bond debt is held

by italian banks. there was a smooth option of italian debt yesterday, which raised about 5.57 billion euros. marcus hester of this is in the past few days. is there a sense that things are evening out now or will depend on what happens with whether or not they form a government? the latter is the answer. it will still be an uncertain and volatile environment. we are probably in for some more spikes, depending on what the talks yields. i think that ultimately, whatever the outcome, either an alliance that gets together or a snap election, we are probably headed for elections before too long. whatever happens, do you get the feeling that if it is a coalition between the league and the

five star movement, will we see whether or not the country want to be part of the you're it? that is a big uncertainty. that is why the markets are reacting the way they are. are we starting to cement the beginnings of whatever you want to call it, the italian furs, italy leave, will they fall in line? —— exit. they cannot go against all the rossel edicts, especially in terms of sovereign debt, as you have already seen, on the back of that, you either comply or you have got to sever their ties completely and this is the bequest. -- russell. christel aranda—hassel, hopefully it will become clear in the next few days, thank you. china is saying it reserves the right to retaliate to any us actions against its investments.

let's go to our asia business hub where rico hizon is following the story, rico. this time yesterday when we were talking we were talking about what the us plans to do against china and now they are saying, hang on, this is what we will do in return. that is what we will do in return. that is right, samantha. china is not taking this latest threats by the trump administration sitting down. the congress ministry came out with a statement today saying us measures against china's investment are against china's investment are against world trade organization rules and they reserve the right to ta ke rules and they reserve the right to take countermeasures. donald trump on wednesday vowed to press ahead with 25% tariffs on $50 billion worth of chinese goods in mid june, despite ongoing trade negotiations between the two sites. chinese state media also signalled that beijing was prepared to fight back, if washington was looking to start a trade dispute. news reports a chinese officials are lining up other countries to work against the

us in this pending trade war —— say. beijing says it is not willing to see an escalation in sino us trade frictions and believes the two countries have a huge potentialfor cooperation. one analyst spoke with earlier said there is a lot of rhetoric and noise, but so far no serious in fermentation. he said the us mayjust be putting more pressure on the chinese for more concessions and expedite this ongoing negotiation process. we will have to wait and see what happens over the next couple of days or weeks. 0k, rico, for now, thank you. later today we'll find out if india has retained its position as the fastest growing economy in the world when latest gdp data is released. the economy grew more than 7% in the quarter ending december over the previous year, overtaking china. despite the acceleration, indian exports have remained sluggish and that's putting pressure on the economy. from mumbai, sameer hashmi reports. julian lake is that this workshop

are busy completing a large order that make jewellery makers. it is the most they have worked in a long time. for more than three decades they have in producing and exporting gold and diamond jewellery. but there has been a significant drop in international demand of the past year. and the entire industry is reeling from a suspected to billion—dollar bank fraud. transco this last six months have been extremely difficult for our country, because of the fraud banks have become scared and have restricted loa ns to become scared and have restricted loans to industry. for this industry, a constant flow of credit is essential to survive. our sales we re is essential to survive. our sales were already down due to low exports, but now the business climate has become even more challenging. india's gems and jewellery industry is one of the largest in the world. it makes up for a big portion of the overall

exports from the country. but it is not the only factor that is going through tough times. a few other industries that also rely on international markets for business are suffering. five years ago indian exports touched just over $314 billion, but since then there have been —— they have been much lower. exports rose last year on the back of strong global demand, but they are still far off peak levels seen in the past. and there is one more problem. india has a large trade deficit, which is the gap between exports and imports. with global crude on the rise, it could rise further as india imports nearly 80% of its oil. every dollar increase in oil price is more than $1 billion increase in india's trade gap. once the trade gap starts widening, it sta rts the trade gap starts widening, it starts impacting the exchange rate as well. the rupee has already been

one of the worst performers in asia this year and whenever this kind of thing happens in the past, it becomes a headache for policy makers and also create significant business uncertainty. the imf says that the indian economy is on track to grow by more than 7% over the next two yea rs. by more than 7% over the next two years. but first india must find a solution to its liking exports in order to sustain that kind of rapid economic growth. sameer hashmi, bbc news, mumbai. now let's brief you some other business stories. us tariffs on european steel and aluminium to go into effect on friday as negotiations over the issue draw to a close. the trump administration is planning to let a temporary exemption granted to the european union expire, the wall streetjournal reports. officials from the us and eu have been meeting in paris over the measures, which the us announced in march. influential us magazine consumer reports is recommending

tesla's model three sedan after its latest tests showed that a firmware update improved the car's braking distance by nearly 20 feet. last week, consumer reports flagged "big flaws" in the car at a crucial time for the company as it battles to reverse production shortfalls. tesla shares closed up almost 3% after the report. a quick look at the markets. here they are. they are all shrugging off those fears of what is happening in italy. up next — newsbriefing. nhs trusts in england have reported a combined financial deficit of £960 million, nearly twice what was expected. the latest reported deficit is reached after taking account

of extra financial support provided by the government. ministers have promised a new long—term financial plan for the nhs, which is expected within weeks. our health editor hugh pym reports. the figures covering hospital, and dealers, mental health, and other trusts in england show the finance is getting worse. the regulator nhs improvement in a surge in patient and had affected performance in key areas, including waiting times. more than 2600 patients were waiting longer than 12 months for nonurgent treatment in march, a 75% increase over the year. the regulator said hundreds of thousands more patience than the previous year had been to accident and emergency, but the nhs did not buckle under pressure. today's reports is that nhs trust in england have played for a total deficit of 496 million for the financial year, which ended in march, but the actual figure was

969, higher than the £791 million the previous year. some analysts argue the underlying position was even worse. there is a lot of windowdressing in today's figures, which are bad enough on the face of it, but they are flattered by very large amount of 1—off emergency funding, which will not be available in future years. of savings, and also 1—off sales of land and property that the nhs has managed to find last year, obviously you can't sell a spare hospital building every year so bite the prime minister says she is planning a new long—term strategy for nhs funding in england, and that is expected within weeks stop hugh pym, bbc news. coming up at 6:00am on breakfast: charlie stayt and tina daheley will have the day's news, business, and sport, including the story of how thailand is closing one of its most famous beaches, made famous by hollywood, to stop tourists destroying it. this is the briefing from bbc news.

the latest headlines: one of north korea's highest—ranking officials has held talks with the us secretary of state in new york, to finalise plans for an historic summit next month between his leader, kim jong—un, and president trump. russia and some internatinal organisations have criticised ukraine after it emerged that the murder of a russian journalist in kiev was faked, apparently to foil a genuine assassination plot against arkady babchenko. a grand jury in new york has indicted the disgraced film producer, harvey weinstein, on charges of rape and sexual assault. the charges relate to alleged attacks on two women in 2013 and 2004. now it is time look at the stories that are making the headlines in media across the world. we begin with the i — it's headline reads "back from the dead". they are of course referring

to russian journalist arkady babchenko, who was reported murdered in kiev, and then dramatically reapprea red alive and well at a press conference about his own killing. the tabloids are having a field—day with this story, the sun's tongue—in—cheek headline reads "you only live twice". the new york times front page features a story on italy. "eu quivers as tumult in italy rocks markets". the article goes into detail about the impact italy's political instability is having on markets around the world. the daily telegraph leads with a story about sexism in the workplace. it says a government—backed review claims some bosses of ftse companies are deliberately keeping women out of the boardroom. the business insider features a story about the latest yougov poll on brexit. it says the majority of people in the uk now believe the decision to leave the european union was wrong. they say the british public have "bregret". and finally, the guardian has the latest from the roseanne scandal the american comedian sparked widespread anger after she sent a racist tweet on tuesday. she's since partly blamed her behaviour on a sedative drug. but the drug maker was quick to fire back, saying racism is not

a known side—effect. so let's begin. with me is nina trentmann, journalist at the wall street journal. this time yesterday this was our lead story. as the day wore on it was revealed that the murder was fake. about 24 hours it seems the story has changed. quite astonishing, considering there has been murders of russian politicians and journalists before and it is extraordinary that he said there was only one choice to take part of this. —— part in this.