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Investment market update

Early Trading

UK stocks are expected to open in negative territory, tracking the US and Asia lower, amid expectations that the US Federal Reserve might move to increase interest rates as soon as next month.

World Markets

Asian stocks dropped to a one week low and crude oil extended its decline below $40 a barrel as prospects for a US interest rate increase prompted a rebound in the dollar. Crude retreated after data showed a bigger than expected increase in US stockpiles.

US stocks declined in thin trading as commodity shares followed crude prices lower, while investors awaited further clues on the economy and direction of monetary policy. Chevron fell 1.8% and ConocoPhillips declined 4.8%. Travel related stocks were down for a second day following the terror attacks in Brussels. Airline United Continental lost 1.1% and American Airlines fell 2%. Shares of aircraft maker Boeing dropped 1.7%.

UK stocks edged higher yesterday, aided by gains in travel shares after Tuesday’s deadly terrorist attacks in Brussels. Kingfisher Plc, Europe’s largest home-improvement retailer, climbed 3% after reporting profit that beat estimates amid growth in the UK and Poland. Carnival Corp. rebounded after news of the attacks weighed on travel stocks. Sky Plc rose 2.4% after Exane BNP Paribas upgraded the stock to outperform.

Headlines

Federal Reserve Bank of St. Louis President James Bullard said policy makers should consider raising interest rates at their next meeting amid a broadly unchanged economic outlook and prospects of inflation and unemployment exceeding targets. “You get another strong jobs report, it looks like labour markets are improving, you could probably make a case for moving in April,” Bullard said in a Bloomberg interview on Wednesday.

Richard Branson’s Virgin Atlantic Airways Ltd. almost doubled earnings last year after expanding its pact with 49% shareholder Delta Air Lines Inc., hosting more people on holiday packages and benefiting from the drop in oil prices. Pre-tax profit excluding exceptional items surged to £22.5 million from a restated £12.4 million in 2014, helped by a £196 million reduction in operating costs attributed to lower fuel expenses, Virgin said in a statement Wednesday.

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