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Investment market update

Early Trading

UK shares are expected to open lower this morning tracking overnight declines on Wall St. and in Asia on the back of poor Chinese lending data and ahead of today’s US retail sales.

World Markets

Asian stocks retreated as falls in commodities deepened and Chinese shares declined on slowing credit growth.

US stocks fell as concern slowing growth may spread throughout the global economy rekindled a sell-off in commodities. The dollar retreated and Treasuries climbed as Federal Reserve officials highlighted the need for a cautious approach to monetary policy, while reiterating their desire to boost key interest rates this year.

UK stocks fell as Rolls Royce Holdings Plc and Glencore Plc shares declined. Rolls Royce fell 18% after saying next year’s earnings will suffer from declining demand for business jet engines and turbine maintenance services. Miners also fell, with Glencore and Anglo American Plc losing circa 3% each.

Headlines

British lawmakers need to take “urgent action” to ensure the UK maintains its position as the leading global financial centre or risk the departure of banks to cities such as Singapore and Hong Kong, according to the British Bankers’ Association.

British and Indian companies agreed on £9 billion of deals as Narendra Modi became the first Indian prime minister to visit the UK in almost a decade. Speaking at a joint press conference in London on Thursday, Prime Minister David Cameron said the two countries had not realised “the full potential” of their relationship. “India invests more into the UK than it does in the rest of the European Union combined,” Cameron said. “I think there’s scope to go much further.”

European banks are on the retreat all across Latin America. Societe Generale SA announced in February that it’s dismissing more than 1,000 workers while exiting the consumer finance business in Brazil. In August, HSBC Holdings Plc sold its unprofitable Brazilian unit, with more than 20,000 employees. Barclays Plc is shrinking its operations in Brazil too. The exodus threatens to deepen Latin America’s turmoil, making it harder for companies and consumers to obtain financing.

German economic growth slowed in the third quarter as companies battled the Greek crisis and a China led slowdown in emerging markets. Gross domestic product in Europe’s largest economy rose a seasonally adjusted 0.3% in the three months ended 30 September, after increasing 0.4% in the previous quarter, the Federal Statistics Office in Wiesbaden said this morning.

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