U.K. Stocks Rally Amid Optimism Over U.S. Debt-Limit Deal
U.K. stocks climbed for a fourth day, their longest winning streak since August, as U.S. Senate leaders signaled progress in talks to increase the country’s debt ceiling and end a partial government shutdown.
Rio Tinto Group advanced 3.4 percent as the world’s second-biggest mining company reported record iron-ore and coal output. Royal Mail Plc (RMG) gained 2.7 percent as retail investors traded the shares for the first time. Burberry Group Plc (BRBY) slid 3.6 percent after saying its chief executive officer will leave.
The FTSE 100 (UKX) rose 44.51 points, or 0.7 percent, to 6,552.16 at 9:28 a.m. in London. The gauge has advanced 3.4 percent since its close on Oct. 9 as Republicans from the U.S. House of Representatives proposed a short-term increase to the debt limit. The broader FTSE All-Share Index added 0.6 percent today, while Ireland’s ISEQ Index gained 0.4 percent.
U.S. Senators have discussed an agreement that would extend the borrowing authority until Feb. 7, 2014, according to a person familiar with the talks who spoke on condition of anonymity. The plan would also re-open the federal government, which has been partially closed since Oct. 1, by funding it through Jan. 15, 2014.
“We’ve made tremendous progress,” Senate Majority Leader Harry Reid said yesterday on the Senate floor with his Republican counterpart Mitch McConnell. The Treasury has said it will exhaust measures to avoid breaching the debt limit by Oct. 17. If that happens, the government will run out of cash to pay all of its bills some time between Oct. 22 and Oct. 31, according to the Congressional Budget Office.
The volume of shares changing hands in FTSE 100-listed companies was 19 percent lower than the average of the past 30 days, data compiled by Bloomberg showed.
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