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Investment market update

Early Trading

UK stocks are expected to open lower this morning, following a lacklustre showing in Asia overnight and a dull end to trading in the US on Friday.

World Markets

Asian shares were mixed, taking their lacklustre start from Wall Street on Friday where investors were not convinced by reassuring comments from the Federal Reserve. Investors remained cautious ahead of US jobs data due later this week. Japanese investors are also looking ahead to the Bank of Japan’s quarterly Tankan survey on Thursday to see how businesses feel about the economy.

The Dow Jones closed higher after comments from Federal Reserve head Janet Yellen initially eased worries about slowing economic growth. Other stocks dipped slightly on tech losses – the S&P 500 remained neutral, while the Nasdaq closed 1.0% down. Shares in Facebook ended the day down 1.7% and Google fell 2.2%.

UK stocks posted their strongest rebound since 27 August, wiping off all their losses for the week. The FTSE 100 Index climbed 2.5%, with 96 of its companies up. Rising prices of metals and oil helped to boost mining and energy shares. Shares in Lloyds Banking Group were up 2.3% to 75.5p. The government announced it had sold another 1% tranche in the bank, reducing its holding to below 12%.

Headlines

Labour leader Jeremy Corbyn says inheritance tax should be ‘graded’ because the current single rate means the ‘very richest become richer’. He told the BBC’s Andrew Marr Programme, a planned rise in the threshold amounted to a ‘tax break’ for the wealthiest 60,000 families.

The growing buy-to-let property market in the UK could post a threat to wider financial stability, a Bank of England committee has said. Buy-to-let mortgage lending had the potential to ‘amplify’ a housing boom and bust, the Bank’s Financial Stability Committee (FPC) concluded. Lending in this sector has risen by 40% since 2008, the FPC said.

Chinese industrial companies reported profits fell the most in at least four years, as the pillars of China’s infrastructure-led growth model suffered from a devalued yuan, a tumbling stock market and weak demand. Industrial profits tumbled 8.8% in August from a year earlier, with the biggest drops concentrated in producers of coal, oil and metals, the National Bureau of Statistics said today in Beijing.

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