Signs the US will steer away from fiscal cliff help to push FTSE higher
BRITAIN’S share index rose yesterday, led by gains in risk-sensitive commodity issues on signs of progress towards a political compromise on the US fiscal cliff.
The FTSE 100 closed up 23.75 points, or 0.4 per cent, at 5,935.90 but failed to hold above last week’s nine-month closing peak of 5,945.85 which was within 20 points of its 2012 high.
“Having recommenced its residency above 5,900, the question is now whether the FTSE 100 can muster the enthusiasm to push towards the next big level of 6,000,” Chris Beauchamp, market analyst at IG said.
The mid cap FTSE 250 index, however, hit a lifetime closing high at 12,293.25 after registering a 0.6 per cent gain.
Investors speculated that negotiations between Democrats and Republicans would lead to a deal to avert the fiscal cliff – a package of tax cuts and austerity measures which could push the US economy back into recession.
Republican House speaker John Boehner said he has hope for a broader deal on the budget talks and was still talking with President Barack Obama.
Gains by miners and energy issues provided half of the FTSE 100 index’s points advance on the view that demand for commodities will recover once the US budget standoff is resolved.
G4S gained 2.7 per cent with traders citing the impact of a broker upgrade as well as reports that the security firm is set to win a role in implementing the government’s contentious and complex changes to welfare payments.