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Investment market update

Early Trading

UK equities are expected to open slightly lower, with China’s overnight currency devaluation likely to cause some market movement.

World Markets

Asian stocks were mixed, as optimism on a rebound in commodity prices was overshadowed by China devaluing its currency by the most in two decades. Sumitomo Metal Mining Co. jumped 3.7% as copper prices rallied from a six-year low.

US stocks advanced, with equities rising the most in three months, after Warren Buffett’s Berkshire Hathaway Inc. agreed to buy Precision Castparts Corp. and commodities-related shares rallied. Precision Castparts, a maker of equipment for the aerospace and energy industries, jumped 19% on the $37.2 billion deal.
UK stocks gained, as mining shares staged a recovery.

In early trading, mining shares had been under pressure because of factors including disappointing trade data from China and falling metals prices. However, at the close of trading, they were among the biggest risers, as commodities rose. Rio Tinto and Fresnillo led the list of gainers, both adding about 1.8%.

Headlines

China devalued the yuan by the most in two decades, a move that rippled through global markets as policy makers stepped up efforts to support exporters and boost the role of market pricing in Asia’s largest economy. The central bank cut its daily reference rate by 1.9%, triggering the yuan’s biggest one-day drop since China unified official and market exchange rates in January 1994.

Greece clinched a deal with the institutions representing its creditors on a rescue package that would release as much as €86 billion. The talks with the officials from the European Commission, the European Central Bank, the International Monetary Fund and the European Stability Mechanism successfully wrapped up in the early hours of this morning.

Google Inc. is reorganizing into a holding company that gives its main Web operations greater independence while offering investors more visibility into ambitious plans to expand new businesses, including health and Internet access. Alphabet Inc. will be the name of the new conglomerate. Google Inc., along with YouTube, Android mobile software and other Web-based products, will be a key part of that.
Oil surged the most in more than two months in London as Chinese crude imports climbed to a record in July. China’s crude imports rose to a record on a monthly basis, driven by buying from small private refineries.

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