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Investment market update

Early Trading

UK stocks are expected to open slightly lower this morning following a mixed session in Asia overnight.

World Markets

Most Asian stocks closed lower as the Bank of Japan Governor held off from adding to the central bank’s bond-buying programme. Markets had expected further stimulus measures. The yen strengthened as Japanese equities weakened.

US stocks clawed back early losses to close higher after investors took a positive view on the latest comments from the US Federal Reserve. The US central bank kept interest rates on hold and said economic conditions had improved.

UK stocks rose as the FTSE 100 index closed up 35.39 points. Barclays closed 0.5% higher after reporting its first quarter results and shares in Standard Chartered which had jumped 10% on Tuesday, fell back 1.1% after Deutsche Bank cut its rating on the bank to ‘sell’ from ‘hold’.

Headlines

Britain’s vote on its future in the European Union is diverting attention from deeper economic problems. Services, the engine of the economy’s recovery, expanded at the weakest pace in almost a year in the first quarter, while industrial production extended its decline. Gross domestic product (GDP) grew by 0.4% between January and March, down from 0.6% in the fourth quarter, the Office for National Statistics (ONS) said.

Gold climbed, rebounding from an earlier decline, after the Bank of Japan unexpectedly held off on expanding stimulus, hurting the dollar. Gold has risen 18% this year, partly as central bankers in Japan and Europe deepened stimulus in an effort to kick start growth, and also as investors scaled back expectations for US rate increases.

The strong conviction about growth, inflation and global stability needed to raise interest rates didn’t show up for officials at the Federal Open Market Committee meeting this week. They’re still open to finding it soon. US central bankers skipped an interest rate hike for the third straight meeting since kicking off the tightening cycle in December.

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