Investment market update
UK equities are expected to open higher, looking to make some progress following a volatile trading session yesterday.
Chinese and Japanese stocks fell, but Asian markets overall were mixed overnight. Trading volumes were escalated as investors hunted for bargains after the biggest selloff in more than two years. Airlines led gains as Japan Airlines Co. surged 3.8%, reversing an earlier loss of 1.8%. Banks rebounded, with Mitsubishi UFJ Financial Group Inc. jumping 3.6%.
US stocks deepened their losses after an earlier recovery lost momentum, with the S&P 500 Index again reaching a correction. Citigroup Inc. and JPMorgan Chase & Co. fell at least 5.4% as banks retreated the most since October. Only four stocks in the S&P 500 rose, led by AGL Resources Inc.
Falling mining and energy stocks led UK and European shares to extend their decline in the longest losing streak since 2003. The FTSE 100 Index closed the session to fall 4.7% to 5,898.87 at the close, despite a small afternoon bounce.
Chinese shares continued their fall, extending the steepest four days since 1996, on concern that the government is paring back market support. The Shanghai Composite Index decreased by 7% to 2,986.07, falling below the 3,000 level for the first time in eight months. The gauge has dropped 21% in the four days since 19 August.
Germany’s economic growth was led by exports last quarter, highlighting the risks to Europe’s powerhouse as a slowdown in China threatens to curb global trade. A breakdown of German gross domestic product showed overseas sales climbed 2.2% in the three months through June, according to data on Tuesday from the Federal Statistics Office in Wiesbaden.
BHP Billiton Ltd., the world’s biggest mining company, said full-year profit fell 52% as commodity prices tumbled on concern over slower growth in China, its largest customer. Underlying profit was $6.4 billion in the year ended 30 June from $13.3 billion a year earlier, Melbourne-based BHP said on Tuesday in a statement.