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Investment market update

Early Trading

UK shares are expected to open lower this morning as traders head for safety in the wake of the Paris attacks. Asian markets were lower and US markets are expected to follow suit when they open later today.

World Markets

Japanese shares headed lower after third quarter growth figures showed the world’s third largest economy had fallen back into a recession. Asian stocks fell as the region’s equity markets began trading for the first time since the attacks in Paris.

US stocks had its worst week since August following a report of weaker than expected October sales growth. Cisco shares fell nearly 5.8%, after the network equipment maker’s forecasts for second-quarter profit and revenue growth fell below expectations.

UK stocks retreated for a second day on Friday, heading for its third weekly decline, after falling Thursday the most since September. Security firm G4S was one the biggest fallers on the index, dropping 3.6% after RBC Capital Markets cut its price target for the stock.

Headlines

Japan’s economy contracted in the third quarter on sluggish business investment. Gross domestic product declined an annualized 0.8% in the three months ended 30 September, following a revised 0.7% drop in the second quarter, the Cabinet Office said Monday in Tokyo. Economists had estimated a 0.2% decline for the third quarter.

The government has sold £13bn of former Northern Rock mortgages that taxpayers acquired during the financial crisis. The portfolio is being sold by UK Asset Resolution (UKAR) to US investment firm Cerberus. The deal is thought to be the largest financial asset sale to date by a European government. UKAR was the ‘bad bank’ set up in 2010 to run down loans made by Northern Rock and Bradford & Bingley.

Economic growth in the eurozone slowed to 0.3% in the third quarter of the year, latest figures have shown. The rate was lower than expected, and compared with a pace of 0.4% recorded in the previous quarter. The pace of expansion in Germany, the eurozone’s largest economy, slowed, but France returned to growth. The European Central Bank is widely expected in December to expand its stimulus programme, which aims to lift inflation and support growth.

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