European stocks in the red, UK announces economic plan

Pound hits fresh 37-year low, down to $1.11

The British pound hit a new 37-year low against the dollar at $1.11, down 1.41%, following an economic announcement by UK Treasury Secretary Kwasi Kwarteng.

– Hannah Ward-Glenton

UK stocks fall, sterling rises on new economic plan

UK scraps plans to raise corporate tax

UK Finance Minister Kwasi Kwarteng confirmed that the UK government would not increase corporate tax to 25% as planned.

The rate will remain at 19% to boost economic growth.

– Hannah Ward-Glenton

UK government announces $67 billion energy package and tax cuts

Britain’s finance secretary has announced a raft of measures to help with rising living costs and boost the country’s economy, including a £60 billion ($67 billion) energy package.

The package will subsidize gas and electricity bills for households and businesses over the next six months.

The government also announced tax cuts for companies in designated locations, financial services reforms and the removal of banker bonus caps.

– Hannah Ward-Glenton

The Eurozone is likely to enter a recession as price hikes hit demand

According to S&P Global, the euro zone is likely to enter a recession as the slowdown in business activity across the region deepened this month.

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S&P Global’s purchasing managers’ index (PMI) fell to 48.2 in September from 48.9 in August.

High energy costs have hit manufacturers hard in the wake of the Russian invasion of Ukraine, and rising prices have contributed to worsening business conditions.

September marks the third straight month that the PMI has fallen below 50 – the benchmark that separates growth from contraction.

– Hannah Ward-Glenton

FTSE subdued ahead of UK mini-budget

The UK FTSE 100 is fairly flat this morning as investors await a mini budget from the country’s finance minister, Kwasi Kwarteng.

The measures outlined in the financial announcement are expected to provide a boost to the slowing UK economy.

Tax cuts, energy subsidies and planning reforms are expected to make up the £200 billion ($225 billion) package.

– Hannah Ward-Glenton

HSBC warns investors to avoid European stocks

According to Willem Sels, global CIO at HSBC Private Banking and Wealth Management, investors looking for value stocks should avoid allocating to Europe as the continent’s energy crisis means the risk/reward trade-off is still not there.

“I caution against buying Europe because of cheaper valuations and rate moves,” said Willem Sels of HSBC Private Banking.

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Read more here.

Here’s how the pan-European Stoxx 600 has traded since the start of the year:

Credit Suisse stock hits record low

Credit Suisse led the market downturn early this morning after a report of a possible capital raising.

The investment bank’s shares hit a record low of 4,335 francs in early trading.

– Hannah Ward-Glenton

European Markets: Here are the opening calls

European stocks are likely to open in positive territory on Friday as investors react to central bank rate hikes and US signs of recession.

The UK FTSE 100 index is expected to open around 25 points higher at 7,172, the German DAX is seen 38 points higher at 12,581, the French CAC 40 is expected to be 13 points higher and the Italian FTSE MIB is seen 42 points higher, according to data I G.

CNBC Pro: Is It Time to Buy Treasuries? How to distribute your portfolio according to the pros

CNBC Pro: Support hedge funds to outperform stocks and bonds this year, says UBS

With both stock and bond prices falling simultaneously, hedge funds have far outperformed and are “well positioned to weather the current market volatility,” according to a new report from UBS.

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As market volatility continues, the Swiss bank shared the types of hedge funds it favors.

Pro subscribers can read more here.

— Ganesh Rao

Nomura downgrades China’s growth prospects for 2023

Nomura lowered its forecast for China’s annual growth in 2023 to 4.3% from 5.1%.

Analysts pointed to a possible extended Covid-zero policy or a spike in the country’s infections after a possible reopening in March.

The latest downgrade comes after Goldman Sachs lowered its outlook to 4.5% from 5.3% earlier this week.

William Ma of the Grow Investment Group told CNBC’s Street Signs Asia that he was optimistic about policy changes he sees coming after the People’s Party congress in mid-October.

– Jihye Lee

Futures start flat in post-market trading

Stock futures were flat after another turbulent day as investors continue to grapple with the Federal Reserve’s decision to hike interest rates and worries about the health of the economy.

Dow Jones Futures rose 41 points, or 0.14%, to 30,190. The S&P 500 rose 4 points, equivalent to 0.11%, to 3,776. The Nasdaq 100 was up 10 points, 0.09%, to 11,575.50.

– Alex Harring

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