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Investment market update

Early Trading

UK stocks are expected to open tentatively higher this morning, as cautious traders look to consolidate positions and adopt a wait and see approach ahead of today’s key Federal Reserve statement.

World Markets

Asian stocks fell, led by Chinese shares as investors awaited the Federal Reserve’s decision on monetary policy and sifted through mixed earning reports. Mazda Motor Corp. added 3.1% after half-year net income topped its forecast. SoftBank Group Corp. jumped 2.7% after its biggest investment, Alibaba Group Holding Ltd., beat quarterly sales expectations, sending its shares to the highest close in New York in two months.US stocks declined amid mixed earnings reports and data that renewed concern on the strength of the global economy as the Federal Reserve began a two-day monetary policy meeting. Apple rose 1.7% after markets closed, posting quarterly profit and sales that exceeded analysts’ predictions. IBM Corp. fell 4% to a five-year low after disclosing that regulators are investigating its accounting treatment of certain transactions in the US, the UK and Ireland.

UK stocks fell for a second day, led by a decline in Anglo American Plc, BHP Billiton Plc and Antofagasta Plc on falling commodity prices. The FTSE 100 Index lost 0.8% after a report showed UK economic growth cooled while manufacturing contracted and construction shrank the most since 2012.

Headlines

Mark Carney and the other eight members of the Monetary Policy Committee will gather Wednesday to debate the economic outlook, leading up to their interest-rate announcement on 5 November. While all members have the opportunity to learn from each other during their discussions, those outside the bank looking for a steer on how policy will evolve are comparatively left in the dark.

For Europe’s biggest oil companies, $60 is the magic number. BP Plc, one of the first companies to predict a prolonged price downturn, has “reset” its business to generate surplus cash flow with oil at about $60 a barrel by 2017. It joins Total SA, which last month unveiled investment cutbacks and project delays that will enable it to fund dividend pay-outs in the same circumstances without the need to borrow.

The UK economy’s growth slowed in the third quarter of the year, weighed down by the performance of the construction and manufacturing sectors. Gross domestic product grew by 0.5% between July and September, the Office for National Statistics said, down from 0.7% in the second quarter. The rate was also lower than the 0.6% growth predicted by many analysts. Part of the slowdown was due to the biggest fall in construction output in three years, a drop of 2.2%. The service sector, the biggest part of the economy, grew by 0.7%.

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