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Investment market update

Early Trading

UK stocks are expected to open higher this morning, after the European Central Bank (ECB) signalled that it was ready to inject more stimulus.

World Markets

Asian stocks jumped as the prospect of more stimulus from the European Central Bank combined with better-than-estimated technology earnings in the US and rising Chinese home prices.

US stocks rallied after a batch of better-than-estimated earnings from companies including McDonald’s Corp. and EBay Inc, boosted optimism on the health of corporate America. McDonald’s jumped the most in seven years, up over 8%, while EBay increased by 13.9%.

UK stocks were mixed but closed up 0.4%. Travis Perkins fell 6% after it said summer trading was slower than expected, and that full-year profits would be at the lower end of City expectations. Debenhams rose by 3.3% after the retailer reported a rise in full-year profit to £113.5m.

Headlines

Mario Draghi, the president of the European Central Bank, has boosted markets by signalling that he is prepared to cut interest rates and step up quantitative easing to stave off the risk of a renewed economic slump in the eurozone. The value of the single currency dropped sharply on foreign exchanges on Thursday as Draghi announced that the ECB’s governing council had discussed expanding its €1.1tn (£795bn) bond-buying programme and cutting the rate on reserves held at the central bank.

Lloyds Banking Group Plc will probably take a further £1 billion charge for wrongly sold loan insurance in the year’s second half, undermining efforts to clean up the bank as the government prepares to sell shares to individuals.

Gold advanced, trimming the first weekly decline since 2 October, as investors eyed the Federal Reserve meeting next week for clues on when the US will raise interest rates.

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