European stocks in the red, UK announces economic plan

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UK stocks fall, pound rises on new economic plan

UK drops plans to raise corporate tax

UK Finance Minister Kwasi Kwarteng has confirmed that the UK government will not raise corporation tax to 25% as planned.

The rate will remain at 19% in an attempt to revive economic growth.

—Hannah Ward-Glenton

UK government announces $67 billion energy package and tax cuts

Britain’s finance minister has announced a series of measures to help tackle the rising cost of living and boost the country’s economy, including a £60 billion ($67 billion) energy package .

The package will subsidize household and business gas and electricity bills for the next six months.

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

—Hannah Ward-Glenton

Eurozone likely to enter recession as rising prices hit demand

The euro zone will likely slip into recession as the slowdown in business activity in the region deepened this month, according to S&P Global.

S&P Global’s Purchasing Managers’ Index (PMI) fell to 48.2 in September from 48.9 in August.

High energy costs hit manufacturers hard after Russia invaded Ukraine, and soaring prices contributed to deteriorating business conditions.

September is the third month in a row that the PMI has fallen below 50, the benchmark separating growth and contraction.

—Hannah Ward-Glenton

FTSE muted ahead of UK mini-budget

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

The measures set out in the budget announcement are expected to spur the slowdown in the UK economy.

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

—Hannah Ward-Glenton

HSBC warns investors to avoid European stocks

According to Willem Sels, Global CIO at HSBC Private Banking and Wealth Management.

“I would caution against buying Europe due to lower valuations and interest rate movements,” said Willem Sels of HSBC Private Banking.

Learn more here.

Here’s how the pan-European Stoxx 600 has traded year-to-date:

Credit Suisse shares hit rock bottom

Swiss credit leads the market downturn early in the morning after a report of a possible capital increase.

Shares of the investment bank hit a record low of 4.335 francs in early trading.

—Hannah Ward-Glenton

European markets: here are the opening calls

European stocks are expected to open in positive territory on Friday as investors react to central bank rate hikes and signals of recession in the United States.

The United Kingdom FTSE100 the index is expected to open about 25 points higher at 7,172, Germany DAX is seen 38 points higher at 12,581, France CAC40 should open 13 points and Italy MIB FTSE is seen 42 points higher, according to IG data.

CNBC Pro: Is it Time to Buy Treasuries? Here’s how to allocate your portfolio, according to the pros

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

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

As market volatility persists, the Swiss bank shared the types of hedge funds it prefers.

Pro subscribers can learn more here.

—Ganesh Rao

Nomura lowers China’s growth outlook for 2023

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

Analysts cited a potentially prolonged Covid-zero policy or a spike in infections in the country after a possible reopening in March.

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

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

—Jihye Lee

Futures start flat in post-trade

Stock futures were flat after another tumultuous day as investors continue to grapple with the Federal Reserve’s decision to raise 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, or 0.11%, to 3,776. The Nasdaq 100 rose 10 points , 0.09%, to 11,575.50.

—Alex Harring

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