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Investment market update

Early Trading

UK equities are expected to open lower amid weaker oil prices and uninspiring leads from the US.

World Markets

Asian markets traded mostly higher despite a lacklustre lead from Wall Street. Oil explorer Inpex Corp. slipped 2.2% as mining companies and oil producers fell worldwide as a renewed drop in commodity prices saw crude fall to a six-month low.

US stocks ended lower by a resumption in the commodities rout, with Brent crude falling below $50 a barrel for the first time since January. Energy companies as a group fell 2% to the lowest closing level since 12 July with Chevron Corp. losing 3.3% and Exxon Mobil Corp. down 1.5%.

UK stocks were little changed, as weakening demand for Chinese manufacturing dragged commodity stocks lower. Glencore Plc, BHP Billiton Plc and Anglo American Plc lost at least 3.5% after a private gauge of China factories fell to a two-year low in July. Rolls-Royce advanced 5.9% after ValueAct Capital Management was said to see substantial profit growth potential led by aircraft-engine servicing.

Headlines

The UK government raised £2.1 billion from selling Royal Bank of Scotland Group Plc shares, its first disposal since the lender received the world’s largest bank bailout.

ValueAct Capital Management has bought a stake in British engineering company Smiths Group Plc, as the activist fund warms to UK industrials. Rolls-Royce Holdings Plc said Friday that ValueAct has become its biggest investor with a 5.44 % stake.

China is planning at least 1 trillion yuan ($161 billion) in bonds, and potentially a multiple of that, to fund construction projects that can help address a struggling economy.

Precious metals fell, with platinum and palladium trading at multi-year lows, while gold and silver dropped as prospects for higher US interest rates hurt demand and investors shunned commodities.

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