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Investment market update

Early Trading

UK stocks are expected to open lower this morning, following struggles in Asian markets amid weak Chinese manufacturing data.

World Markets

Asian stocks fell, with a sharp decline in Chinese mainland equities triggering a halt for the rest of the day, as a worse-than-expected Chinese manufacturing report and escalating Middle East tension saw investors shun riskier assets.

After enduring the sharpest fall in four years and volatility not seen since the financial crisis, the S&P 500 Index ended 2015 just fractionally below where it began, down 0.7% at 2,043.94. The decline, sealed on the last day, broke a three-year streak of annual advances after the Federal Reserve raised interest rates, valuations jumped and commodities struggled all year.

UK stocks declined on New Year’s Eve amid thin trading volumes. Declines in miners and oil stocks weighed on the FTSE 100 Index in 2015, causing it to close 4.9% lower for the year. Anglo American Plc and Glencore Plc both fell more than 70% across the year, while British homebuilders were among the best performers, benefiting from an improving UK economy. Berkeley Group Holdings Plc and Taylor Wimpey Plc climbed more than 47% each.

Headlines

Shire Plc is in advanced talks to acquire Baxalta Inc. for around $32 billion in cash and stock, excluding debt, according to Bloomberg. The two drugmakers may announce a deal as soon as this week. The price being discussed is $46.50 to $48 a share, but final details of the transaction are still being negotiated and the timing and structure of any offer may change.

New Yorkers who basked in Florida-like weather in December are going to have to dig out winter clothing for January. That prospect stoked a record year-end rally in US natural gas. Gas futures have surged 29% since mid-December, the biggest rebound for the period in New York Mercantile Exchange data going back to 1990. They extended gains after a government report showed the biggest supply drop in three weeks.

Oil gained for a second day as Saudi Arabia cut ties with Iran a day after its embassy in Tehran was attacked to protest the Saudis’ execution of a prominent Shiite cleric. Futures rose as much as 3.5% in New York, extending Thursday’s 1.2% advance.

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