The pan-European Dow Jones Stoxx 600

During August, we will not be providing the 'Markets Afternoon' report due to holiday and site development work. Use the relevant links below for the latest data.

HP: Bloomberg reports that Hewlett-Packard Co.’s Mark Hurd surprised the board by settling a sexual-harassment claim before directors could learn more about the incident, a final breach of trust that contributed to his ouster as chief executive officer, two people familiar with the decision said.

Bloomberg says Hurd, who stepped down on Aug. 6th, was scheduled to join a mediation session the previous day to deal with the harassment claim, the people said. Instead, Hurd settled the complaint and the meeting never happened, they said. The board’s trust in Hurd also was undermined after a probe found he tried to conceal a relationship with his accuser, a former actress named Jodie Fisher who worked for HP as an event organizer, said the people, who asked not to be named because the information is private.

New York Times columnist Joe Nocera wrote on Saturday that the the HP directors should be called out for acting like the cowards they are. Hurd’s supposed peccadilloes were a smoke screen for the real reason they got rid of an executive they didn’t trust and employees didn’t like. Nocera said the stand-up thing would have been to fire Hurd on the altogether legitimate grounds that the directors didn’t have faith in his leadership. But of course Wall Street would have had a conniption if the board had taken such a step. So instead, it ginned up a tabloid-ready scandal that only serves to bring shame, once again, on the HP board.

Nocera also said Hurd, replaced the fired Carly Fiorana, and had a strong reputation for the subsequent recovery of the tech giant, was despised at HP, not just by the rank and file, but even by HP’s top executives. The columnist remarked that perhaps this explains why the CFO, Ms. Lesjak, was so quick to denigrate him once she took over.

Hurd may scoop over $40m in a severance bonanza.

Compensation experts told CNBC that in addition to a $12m cash severance payment, Hurd will get three times that in stock and other benefits.

"Hurd gets to keep $8.9m in stock options, $12.7m in performance-based stock units and, more than $600,000 in restricted stock units," CNBC reports.

Combined with his medical and dental benefits, that means Hurd's take-away will total at least $34m, and could exceed $40m due to HP's strong performance this year.

Japan's economy slowed sharply in the second quarter with GDP missing forecasts. Jesper Koll, managing director & head of Japanese equity research at JPMorgan Securities Japan, tells CNBC's Kaori Enjoji that this is a clear indication the country remains ensnared in deflation:

Economic View: Ireland going to the funding well again this week; Goodbody chief economist, Dermot O’Leary, comments  - - "In many ways, not a lot has changed over the time this economist has been away over the past eight weeks or so. From a macro standpoint, it has been confirmed that growth has re-emerged in the Irish economy due to a resurgent export sector, but domestic activity remains depressed.

The key challenges of rehabilitation of the banking sector and funding of the Exchequer deficit remain too, with the two remaining very much intertwined. Highlighting this, the Irish Government is set to tap bond markets again tomorrow with the issue of 4-year and 10-year paper totalling somewhere between €1bn and €1.5bn. With over 80% of long-term funding for 2010 already complete, funding of the 2010 deficit is not really the issue.

 The price at which this money is borrowed at certainly is. Following the news last week that the State’s bill for Anglo Irish Bank will rise yet further, spreads on Irish government debt rose yet further. 10-year yields for example rose by 31bps in the past five days, taking the spread over German bunds to close to 3% again for the first time since June. While the public finances are not far off initial projections, it is clear that the as yet unknown cost of recapitalising the banking system is pushing up the cost of Irish Government debt. The two large banks have already laid out their strategy for meeting capital targets set by the regulator by the end of the year, but it is high time there was certainty on the strategy and final cost for Anglo Irish Bank."

Mikio Kumada, executive director of LGT Capital Management, says inflation in food prices may be beneficial in the long-term. He explains why to CNBC's Martin Soong and Sri Jegarajah:

Euro area GDP surges on weaker euro in Q2: Davy chief economist, Rossa White, comments  - -"So much for the collapse of the euro area. Real GDP growth in Q2 hit 1% quarter-on-quarter, according to the flash estimate. That represents the biggest jump since the end of recession and the fastest pace of expansion since Q1 2008. Some of the most bearish commentary about the common currency area failed to account for the boost from a weaker currency to an already competitive core. That is highlighted by the remarkable German data. It grew far more quickly than at any time since re-unification.

The difference between core and periphery was noticeable. The volume of German GDP surged 2.2%. That eclipsed growth of 1.9% in Q1 1992 and translates to an annualised pace of 9%. To put that into context, the last time that quarterly annualised GDP growth beat 9% in the US was way back in Q2 1983. There were two main reasons for the German surge: ongoing strength of demand in Asia and the depreciation of the euro. This spurred rapid growth in exports and fixed investment related to export industry. France and Italy also did reasonably well: France recorded growth of 0.6%, while Italy eked out 0.4%. Real GDP in the Netherlands, which depends heavily on German demand, jumped 0.9%. Austria also grew 0.9%.

But Spain and Portugal were left behind. At least both remained out of recession. Yet the 0.2% increase in the volume of activity in both countries only reflects the beginning of the major fiscal retrenchment. Both will do well to avoid negative prints in the quarters ahead. Greece remains mired in recession. In fact, it got worse: the economy fell 1.5% in size. That compares with 0.8% declines in each of the two preceding quarters. Ireland does not produce a flash estimate (like Finland, Luxembourg, Slovenia and Malta of the euro area countries). Our estimates suggest that real GDP expanded in the quarter as, more importantly, did GNP after a recession that lasted more than two years."

Asia Markets

The MSCI Asia Pacific index dropped 0.7% Monday and the Nikkei 225 Stock Average dipped 1.3% as Japan's economy was reported to have expanded at the slowest rate in three quarters

Japan's GDP expanded at an annualised 0.4% in 2Q10, lower than consensus of +2.3% and a downwardly revised +4.4% in 1Q10.

In a historic milestone, China has overtaken Japan in the second quarter to become the world's second biggest economy  --  see link in Box below.

China's Shanghai Composite climbed 2.26%; Australia's S&P/ASX 200 Index dipped 0.47% and India's Sensex Index inched up 0.06%.

Asia benchmarks

In Europe, the Dow Jones Stoxx 600 has risen 0.45% Monday.

The ISEQ has gained 0.37% in Dublin.

CRH is up 0.95%; Bank of Ireland has dipped 1.02%.