Investment market update
UK stocks are expected to open higher this morning, following gains in the US and Asia overnight where investors welcomed the news the Federal Reserve is likely to increase interest rates in December.
US and Asian stocks moved higher as jitters from the terrorist attacks in Paris dissipated and investors cheered firmer signs of a Federal Reserve possible interest rate hike next month.
UK stocks were up on Wednesday with miners leading the way. Antofagasta was up 5.8%, Glencore climbed 5%, while Anglo American was 4.3% higher. Shares in airlines fell as confidence among investors was affected by news of more security alerts and the police operation in Paris. British Airways owner IAG fell 3.2%, while easyJet was down 0.9%.
Minutes from the latest US Federal Reserve’s policy committee meeting last month showed that most members thought it might be appropriate to raise interest rates in December. This is provided economic data continued to improve and that there were no unanticipated shocks.
US crude oil fell below $40 a barrel for the first time since August on Wednesday as rising inventories in the world’s largest oil consumers increased concerns over the excess supply globally. This increase came despite a fall in imports and as refineries increased runs, which would normally be expected to draw down stockpiles.
The Bank of Japan decided to keep monetary policy on hold despite the country entering a technical recession as it continued to argue the recovery is on track. The Japanese government said they will continue to buy government bonds in an effort to drive down long term interest rates, despite acknowledgment of weakness in measures of public inflation expectations.