Asian shares outside of Japan have fallen with investors eagerly anticipating the FOMC minutes this week to see if there’s any more indication in regards to potential of tapering in September. The MSCI index has lagged in comparison to US indices as growth slows in China and speculation that the Federal Reserve will curb U.S. bond buying spurred investors to sell assets perceived as riskier across Asia and emerging markets. The MSCI traded at 13 times estimated earnings on Aug. 16 compared with 15 for the S&P 500 Index and 14 times for the Stoxx Europe 600 Index
The Confederation of British Industry has lifted its forecast for economic growth for this year from 1 percent to 1.2 percent amid signs of a pick-up in business confidence. Optimism about performance across the services, construction and manufacturing sectors has added to hopes that the recovery is gathering pace after 0.6% growth in the second quarter.
Its upgrade comes after figures last week showed that the Eurozone, Britain’s biggest trading partner, had emerged from recession. However, the body warns that a hoped-for rebalancing of the economy to become less reliant on consumer spending and more focused on investment and trade is taking longer than expected.
The CBI, which represents 240,000 UK businesses, has also increased its forecast growth for 2014, from 2% to 2.3%, predicting that increasing disposable income and business and housing investment will boost demand.