Investment market update
UK stocks are expected to open lower this morning as investor sentiment continues to be hit by fears over China and a drop in oil prices.
Most Asian stocks fell along with US index futures after China weakened the yuan, while equities in the region’s biggest economy advanced amid government efforts to shore up the stock market.
US stocks closed slightly higher still dragged back by falls in China earlier this week. Fiat Chrysler shares close 0.78% higher after reporting a 19% jump in sales. However, Ford shares were down 1.79% after its results disappointed. Gun maker Smith & Wesson shares surged 11% after reporting an increase in sales ahead of Obama’s speech on gun control measures.
UK stocks had an uncertain day, but ended higher, rebounding from Monday’s global sell-off. The FTSE 100 jumped 1% as trading began, lurched into negative territory by lunchtime, but closed up 0.72%. Next fell 4.6% after it reported ‘disappointing’ sales in the run-up to Christmas. It blamed the unusually warm weather in November and December, and poor stock availability at its Directory business. Sainsbury’s fell 5.2% after it emerged that the supermarket giant had made an unsuccessful bid approach for Home Retail Group. Tesco was one of the biggest gainers in the FTSE 100, rising 1.5%, after Deutsche Bank raised its rating for the UK’s largest supermarket business to ‘buy’ from ‘hold’.
Inflation in the eurozone remained at 0.2% in December, unchanged from November, official statistics show. Price growth in food, alcohol and tobacco slowed slightly compared with November, while the drop in energy prices was also smaller, according to Eurostat estimates.
Mainland Chinese shares headed higher on Wednesday, recovering some of the steep losses made earlier this week on concerns about the economy. The Shanghai Composite index was up 1.8% to 3,348.22 as measures from regulators to support the stock market started to have an impact. Local reports said the securities regulator would keep in effect its ban on share sales by major shareholders until new rules were released. The ban was set to expire on Friday.
Supermarket group Sainsbury’s has said it made a bid approach for Argos and Homebase owner Home Retail Group in November, but the offer was rejected. It said a deal would be ‘an attractive proposition’ for customers and shareholders of both firms. Home Retail Group confirmed its rejection of the bid, which it said ‘undervalued Home Retail Group and its long-term prospects’.
US Secretary of State John Kerry has repeatedly called leaders in Saudi Arabia and Iran to try to defuse their diplomatic row, US officials say. State department spokesman John Kirby said the phone conversations involved foreign ministers of both countries and the Saudi deputy crown prince. Saudi Arabia cut diplomatic ties with Iran on Sunday after protesters ransacked the Saudi embassy in Tehran. Protests erupted after Saudi Arabia executed a senior Shia Muslim cleric.