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Investment market update

This bulletin provides you with an overview of the latest market news from around the world – world markets, key headlines, stocks and market data.

Early Trading

UK equities are expected to open slightly lower, with attention turning to George Osborne’s annual Mansion House speech and his plans for the UK economy.

World Markets

Most Asian stocks made small gains, though Japanese stocks fell slightly after comments from the Bank of Japan drove the yen higher.

US stocks were little changed, after equities had previously reached a two-month low. Banks rallied, while airlines and technology companies slipped.

UK stocks fell for a fourth consecutive session, as commodity shares weighed on the FTSE 100 Index.

Headlines

Mark Carney may well reflect on the vagaries of forecasting as he prepares to deliver his annual Mansion House speech to financiers in London on Wednesday. A year after the Bank of England governor sparked speculation that UK interest rates could increase within months, money markets are projecting officials will maintain the cost of borrowing at a record low until the summer of 2016. At the Mansion House dinner last year, Carney told households and businesses to prepare for a rate increase “sooner than markets currently expect,” prompting investors to shift bets on a move to February 2015 from May. Since then, inflation has evaporated and the economy is struggling to rebound from its weakest quarterly performance since 2012.

J Sainsbury Plc reported a sixth straight drop in quarterly same-store sales as Britain’s supermarket price war continued to gnaw away at business. Sales at stores open at least a year fell 2.1%, excluding fuel, in the 12 weeks ended June 6. That compared with the median estimate for a 2.2% drop, and the fourth-quarter’s 1.9% decline. “Trading conditions are still being impacted by strong levels of food deflation and a highly competitive pricing backdrop,” Chief Executive Officer Mike Coupe said in the statement. “Despite the challenging market conditions, we are confident that we are building on strong foundations and making good progress with our strategy.”

Greece retreated from budget concessions to its creditors, setting the stage for another attempt by German Chancellor Angela Merkel and French President Francois Hollande to try to break the country’s financing deadlock. With Greece’s financial safety net expiring on June 30, Prime Minister Alexis Tsipras plans to meet the leaders of the euro area’s two biggest economies in Brussels on Wednesday, his office said in a statement. Any remaining bailout funds are off limits unless Tsipras reaches an accord with creditors.

Stocks

Anglo American Plc and Rio Tinto Plc fell 2.0% and 1.3% respectively after Societe Generale SA cut its rating of both miners to hold from buy.

AstraZeneca Plc fell 2% after Citigroup Inc. said the drugmaker’s diabetes franchise faces more competition.

Reed Elsevier Plc added 1.4% after Barclays Plc raised the shares to overweight, the equivalent of a buy rating, from equal weight.

Netflix Inc. increased 3.2% to an all-time high, amid speculation that the company may announce a stock split at its annual meeting.

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