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Investment market update

Early Trading

UK stocks are expected to open higher this morning, as Chinese inflation rose more than expected in November.

World Markets

Asian stocks fell to the lowest level in two months, led by declines among healthcare and consumer companies, with Japanese equities bearing the brunt of losses. A fall in energy shares stabilised as crude oil prices rebounded.

US stocks declined, tracking a selloff in equity markets around the world, on renewed worries about the prospects for global growth. Industrial and raw-material companies led the retreat, with Caterpillar Inc. and Boeing Co. down at least 2.3%, while Alcoa Inc. fell 5.8%.

UK stocks fell, weighed down by a decline in mining and oil stocks on signs of a demand slump in China. Anglo American Plc scrapped its dividend for the first time since 2009, sending the shares 8.9% lower. BHP Billiton Ltd. declined 2.9%.

Headlines

China’s consumer inflation picked up last month, boosted by price gains for food and services, signalling demand in the world’s second-largest economy is stabilising after accelerated fiscal stimulus and a year of interest rate cuts. Firming inflation and slower declines in imports signal some stabilisation in demand after six central bank interest rate cuts since November last year.

A worsening global outlook will damp UK growth and persuade the Bank of England to keep its key rate at a record low until the third quarter, according to the British Chambers of Commerce. The business lobby group cut its forecast for this year’s expansion to 2.4% from 2.6%, and lowered its predictions for 2016 and 2017 to 2.5% from 2.7%.

A quarter of a century after disbanding from the Soviet Union, the Baltic States are now getting rid of their electricity dependence too. One of two new cables costing €1.1 billion, connecting Lithuania to Poland, started on Wednesday, according to grid managers. The second link from Lithuania to Sweden, big enough to eliminate the Baltic nation’s Russian imports, was set to start commercial operations on Wednesday too before tests were suspended Monday after a fire next to a Swedish converter station.

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