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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 marginally higher this morning as Greece commits to submit its latest reform plans in order to secure much needed cash.

World Markets

Asian stocks fluctuated, with Chinese equities swinging between gains and losses as the government tries to stem the current volatility.

Wall Street was overshadowed by a technical glitch that caused trading on the New York Stock Exchange to be suspended for almost four hours. The main indexes were already down before the suspension, due to falls in Chinese shares and concerns over the Greek debt crisis.

UK stocks rebounded from their lowest level since January amid gains in Europe’s stocks, while Chancellor of the Exchequer, George Osborne, delivered the nation’s budget.

Headlines

The Greek government has extended bank closures and a €60 daily limit on ATM withdrawals until Monday. The curbs were imposed on 28 June, after a deadlock in bailout talks with creditors led a rush of withdrawals. The European Central Bank has decided not to increase support for Greek banks until the debt crisis is resolved. Greek PM Alexis Tsipras says he will submit ‘credible’ reform plans today – ahead of a Sunday deadline by the EU to find a solution.

China’s stocks advanced in volatile trading as the government battled to restore investor confidence in a market that lost $3.9 trillion in less than a month. Regulators late Wednesday banned major stockholders from selling stakes in listed companies, while announcing on Thursday banks can roll over loans backed by shares. China’s public security agency is also stepping in to investigate “malicious” shorting of stocks, Xinhua News Agency reported Thursday.

Chancellor of the Exchequer George Osborne set out a budget, prime ministerial in its ambition that recrafts the UK welfare state on Conservative principles and draws battle lines for the 2020 general election. Osborne announced deep cuts in benefits, albeit twinned with the introduction of a compulsory “living wage” to help the lowest earners, paving the way for a comprehensive reform of the welfare system. While some measures he announced Wednesday, such as a cut in corporation tax, were geared to appease business, many were aimed at raising more revenues from the wealthy. They included higher levies on dividends, closing a loophole used by hedge funds, and removing some tax breaks for private landlords.

Stocks

Barclays Plc climbed 2% as Chairman John McFarlane ousted Chief Executive Officer Antony Jenkins to speed up an overhaul.

Lloyds Banking Group dropped 2% and Standard Chartered Group Plc fell 1.5% as Osborne said banks’ profits will be taxed by an additional 8% on top of their corporate tax, starting from next year.

Drax Group Plc, the utility converting the biggest UK coal station to burning wood pellets, plunged 28% to a record low after the government said clean power won’t be exempt from a climate-change tax.

Microsoft shares eased 0.14% lower after it announced it was cutting 7,800 jobs, most of them in the struggling phone unit it bought from Nokia last year.

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