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Investment market update

Early Trading

UK stocks are expected to open lower this morning as investors consolidate after last week’s gains. All eyes continue to be on the future moves of the Federal Reserve and the European Central Bank.

World Markets

Asian stocks were mixed overnight as India and Japan made marginal gains, but the Chinese market fell 0.6%.

US stocks advanced, with the Standard & Poor’s 500 Index capping its best weekly gain this year as Nike Inc. paced a rally in consumer companies and European Central Bank President Mario Draghi hinted at additional stimulus.

UK stocks were little changed, capping their biggest weekly advance since October. Drug-makers AstraZeneca Plc and GlaxoSmithKline Plc added at least 1%, among the biggest positive contributors to the FTSE 100 Index. Barclays Plc decreased by 3.5% after Morgan Stanley cut its recommendation on the stock and said tougher regulation may hurt dividends and growth at British lenders.

Headlines

Mark Carney will give his latest assessment of the UK economy this week, days after his deputy emphasized that the Bank of England (BOE) hasn’t made any promises about maintaining record-low rates. The BOE Governor will testify to lawmakers in London on Tuesday, and a report on Friday is set to reveal what drove growth in the third quarter. Separate surveys on retail sales and consumer confidence will give insight into the fourth quarter, while Chancellor of the Exchequer George Osborne presents his year-end fiscal plan on Wednesday.

Manchester Airport said it could support 25 more long-haul routes, almost doubling the current number, after Air China Ltd. became the latest major carrier to seek flights to the biggest British hub outside London. The airport, which has a catchment of 22 million people within two hours’ travel, achieved a rolling 12-month passenger tally above 23 million for the first time in its 77-year history, owner Manchester Airports Group said in a statement. Almost 6 million flew on inter-continental services.

George Osborne’s continued austerity push isn’t boding well for the UK economy’s staying power, according to a report by the Institute for Public Policy Research. As countries across Europe try to shake off the effects of the recession and prevent permanent damage to their labour markets, the institute says the Chancellor of the Exchequer needs to do his part and invest more in improving skills. According to its research, there are “deeply alarming” prospects that unemployment, underemployment and inactivity risk becoming permanent characteristics across the European Union.

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