Investment market update
UK stocks are expected to open higher this morning on the back of Friday’s positive US jobs data, which led US and Asian markets higher.
Asian stock markets closed higher on Monday following healthy US jobs figures. Japan’s Nikkei 225 jumped 1% to 19,698 and Australia’s ASX 200 rose 0.1% to 5,155.70. Hong Kong’s Hang Seng was up 0.2% at 22,275.72 and China’s Shanghai Composite gained 0.2% to 3,531.61.
US stocks rallied, with the S&P 500 Index recovering from its steepest drop in two months as jobs data bolstered confidence that the economy is strong enough to withstand higher borrowing costs. Technology and financial shares helped Friday’s advance, with Apple Inc., Microsoft Corp. and JPMorgan Chase & Co. all rising more than 3%.
UK shares fell on Friday, closing at their lowest level in almost three weeks. Whitbread Plc, the owner of Premier Inn hotels and Costa Coffee shops, dropped 2.9% after Barclays Plc lowered its rating on the shares. Berkeley Group Holdings Plc rallied 7.5% to a record after London’s biggest homebuilder boosted its dividend program by £500m.
In the US, the Labor Department reported that employers added 211,000 jobs in November. That was more than investors expected, and a sign that consumers are still spending and keeping the US economy afloat even as manufacturing and energy companies struggle. The data cements expectations that the Federal Reserve will raise interest rates from a record low at its policy meeting next week.
UK manufacturing is encountering a poor end to the year, according to industry body the EEF. It has cut its manufacturing forecasts, expecting a 0.1% fall in 2015, with 0.8% growth next year. Its survey also points to concerns about the future outlooks for the global and UK economy. It says weakening demand from developed and emerging markets have become more prominent, leading to falling exports.
Greece’s parliament has narrowly approved the 2016 budget that includes sharp spending cuts and some tax increases amid economic recession. The budget was passed with a majority of only eight votes – 153 to 145. ‘This budget is a difficult task for a government that wants to leave its mark with social justice,’ Prime Minister Alexis Tsipras told lawmakers.