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Investment market update

Early Trading

UK stocks are expected to open higher this morning, following a strong finish to Asian trading overnight.

World Markets

Japan’s stocks rose, leading Asia shares higher as the Bank of Japan refrained from expanding its record stimulus program.

A rally in US stocks stalled Thursday, after equities reached a two-month high as investors weighed corporate earnings and prospects for higher interest rates this year. Technology shares fell as NXP Semiconductors NV tumbled the most in five years after predicting a drop in sales, and Intel Corp. slid 2%.

UK equities fell as banks and mining shares resumed declines after the Federal Reserve boosted prospects for a rate increase in December. Barclays Plc decreased 6.3% after cutting its 2016 profitability target and saying it doesn’t expect charges of misconduct to drop any time soon. Standard Chartered Plc declined 2.7% after sources said it has held discussions with bankers to raise at least $4 billion of capital. BHP Billiton Ltd. and Glencore Plc fell 4%, following metal prices lower.

Headlines

Royal Bank of Scotland Group Plc, Britain’s biggest government-owned lender, said profit fell by more than half in the third-quarter, missing analyst estimates, as it continued to shrink its investment bank. Pre-tax profit before one-time items and restructuring costs fell to £842 million pounds from £2.05 billion pounds a year earlier, Edinburgh-based RBS said in a statement on Friday. Analysts forecast a profit of £988 million.

Britons are getting wary of the economy’s staying power. In its monthly consumer confidence index, GfK said a measure of Britons’ outlook for the economy over the next 12 months dropped to minus 4 in October, the lowest reading this year. The overall sentiment index also weakened, though peoples’ view of their personal finances was unshaken. The survey reflects the contrast between weakening global growth and the record-low interest rates and higher wages helping consumers in the UK.

Congress passed a two-year bipartisan budget plan that avoids a catastrophic default on US debt, increases spending on domestic and defence programs and ends months of turmoil among House Republicans. The 64-35 Senate vote early Friday, following House passage two days earlier, sends President Barack Obama a bill that will extend US borrowing authority until March 2017, after he leaves office. The agreement likely frees Obama of protracted fiscal battles with congressional Republicans for the rest of his term.

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