London market edges higher over US debt deadline talks

London (AFP) - London shares closed in positive territory on Tuesday as lawmakers in the United States neared a budget deal to reopen government services and raise the country's borrowing limit to avoid a catastrophic default.

The benchmark FTSE 100 index added 0.64 percent to 6,549.11 points.

"US lawmakers are finally making headway on a deal to avert financial destruction before Thursday’s D-day deadline, propping up market sentiment in overnight trade across US and Asian share markets and pulling up Europe," said Ishaq Siddiqi, market strategist at ETX Capital traders.

Senate Republicans are scheduled to convene Tuesday at noon to review a plan being hammered out between Senate Majority Leader Harry Reid and Republican Minority Leader Mitch McConnell that would raise the US government's borrowing limit and end a partial federal government shutdown.

"I'm very optimistic we will reach an agreement that's reasonable in nature this week to reopen the government, pay the nation's bills and begin long-term negotiations to put our country on sound fiscal footing," Reid said at the conclusion of Monday's Senate session.

"We are not there yet, but tremendous progress" has been made, he said.

If Congress does not raise the $16.7 trillion debt ceiling by Thursday, the US government will begin to run out of money and could start defaulting on its obligations for the first time in history.

Back on the trading floor, Lloyds Banking Group (LBG) was the most traded stock by volume, with 124.19 million units changing hands, followed by telecoms giant Vodafone which saw 68.76 million units switch owners.

Miner Rio Tinto was the star performer rising 4.25 percent to stand at 3215 on strong third quarter results.

Petrofac was also in demand and was up 3.68 percent to 1,410 pence.

Burberry was the biggest faller, slipping 7.63 percent to 1464 pence.

The British luxury fashion group retreated after its chief executive Angela Ahrendts is quitting her role to become head of retail at Apple.

The US technology giant Apple said in a statement that Ahrendts would oversee the "strategic direction, expansion and operation" of its retail and online stores.

“I am thrilled that Angela will be joining our team,” said Apple chief executive Tim Cook.

“She shares our values and our focus on innovation, and she places the same strong emphasis as we do on the customer experience. She has shown herself to be an extraordinary leader throughout her career and has a proven track record.”

Ahrendts will have been chief executive of Burberry for about eight years by the time of her departure in 2014.

Capita was also under heavy selling pressure down 3.62 percent to 970.50.

On the currency markets, the pound fell to $1.5980 at 5:05pm from $1.5983 at the same time on Monday, while it edged up to 1.1840 euros from 1.1785 over the same period.

Source: http://news.yahoo.com/london-stocks-rise-prospect-us-debt-deal-165610307.html
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