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Investment market update

Early Trading

UK stocks are expected to open higher this morning as UK construction and US employment data will be on traders’ radars.

World Markets

Asian shares had a mixed session on Friday. Hong Kong stocks led the region’s gainers with a 2.7% rise, lifted by a bounce in the Chinese Enterprise Index which tracks Chinese companies listed in Hong Kong, after latest policy steps to shore up the flagging economy.

US shares edged higher, while Treasuries and crude oil meandered as investors awaited a report on the American labour market that’s likely to influence expectations on the outlook for interest-rate hikes. General Motors rose 2.2% and Ford 0.74% after both companies reported September car sales that beat expectations.

A jump in BP Plc and Royal Dutch Shell Plc lifted the FTSE 100 Index higher after UK stocks ended the month yesterday with their biggest advance since August. A better than expected report on the Chinese economy boosted mining shares such as BHP Billiton and Anglo American. Tesco Plc lost 2.7%, after the London-based Times reported that the grocer is in talks to sell 10 development sites for £250 million.

Headlines

European Central Bank President Mario Draghi said growth is returning in Europe, after the region failed to make a major contribution to the global expansion in the past seven or eight years. “The progress achieved over the past three years to stabilize and strengthen the euro area is real,” Draghi said. “Growth is returning. The way forward is well identified. And we will not rest until our monetary union is complete.”

Volkswagen AG’s finance unit is seeing funding costs rise as turmoil from the diesel-cheating scandal spreads, adding to the beleaguered carmaker’s woes. The banking arm, which makes loans to auto buyers and dealerships and takes consumer deposits, may have to pay higher rates to customers and on securities backed by its loans.

The anticipated time lag between the Federal Reserve raising interest rates and the Bank of England following suit is at its widest in more than five months, according to Morgan Stanley indexes based on futures trading. The gauges, which indicate market expectations for the time to the first rate increase in a particular region, now signal the BOE won’t act until eight months after the Fed.

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