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Investment market update

Early Trading

UK stocks are expected to open marginally lower this morning, as focus continues to be on Chinese growth and oil fell below $32 per barrel.

World Markets

Asian shares were mixed as Japanese stocks fell as markets re-opened after a public holiday. Energy explorers struggled as crude oil prices continued to fall.

The S&P 500 Index closed little changed after volatile trading, though a late-afternoon rebound paced by Apple Inc. and Intel Corp. offset a selloff in commodity shares driven by anxiety that China’s slowdown will spread.

UK stocks closed lower after fluctuating all day. Shire Plc fell after Baxalta Inc. agreed to the drugmaker’s sweetened bid worth about $32 billion. Miners experienced another volatile session, with struggles for Glencore Plc and Antofagasta Plc.

Headlines

WM Morrison Supermarkets Plc unexpectedly snapped a four-year record of declining same-store sales as new Chief Executive Officer David Potts put his stamp on the struggling grocer. Same-store sales rose 0.2%, excluding gasoline, in the nine weeks ended 3 Jan, the UK’s fourth-largest supermarket chain said in a statement this morning. That compared with the median estimate for a 2% drop.

With inflation stuck near zero and price pressures softening, economists now don’t see the Bank of England increasing the key rate from 0.5% until the third quarter. Minutes of the Monetary Policy Committee’s meeting published alongside its policy announcement on Thursday will show how officials voted and whether the outlook, along with slower growth in UK salaries, was enough for Ian McCafferty to abandon his push for higher borrowing costs.

HSBC Holdings Plc is likely to stay based in London rather than re-domicile to Asia, according to Martin Gilbert, chief executive officer of one of the British bank’s biggest shareholders. “The logistics of moving their headquarters out of London are so vast,” Gilbert, CEO of Aberdeen Asset Management Plc, said in an interview with Bloomberg Television on Tuesday. “I suspect much as they might want to move their headquarters, they will probably on balance stay here.”

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