London market edges higher as US debt deadline approaches

London market edges higher as US debt deadline approaches

London (AFP) – London shares closed in positive territory on Monday with investors on edge over the approaching US debt deadline that has for now failed to overly alarm markets.

Adding to the volatility was a disappointing batch of Chinese economic data, while on the corporate front shares in French car giant Peugeot plunged.

The benchmark FTSE 100 index gained 0.32 percent to 6,507.65 points.

“It’s complex to think approximately anything else yet the budget negotiations in the United States this week! The October 17 date is nearing fast,” economists from brokerage Aurel BGC in Paris said.

But Barclays analyst Renaud Murail said that despite the “absurd” situation in Washington, the market “refuses to reverse in the belief that a default will be avoided.”

EU Economic Affairs Commissioner Olli Rehn has warned that failure to raise the borrowing limit would “have potentially dramatic consequences on the world economy & on the still nascent recovery in Europe.”

China & Japan — which between them hold more than $2.4 trillion of US debt — have moreover urged the United States to obtain its house in order & avert a default.

Back on the trading floor, Lloyds Banking Group (LBG) was the most traded stock by volume, with 79.74 million units changing hands, followed by telecoms giant Vodafone which saw 50.45 million units switch owners.

Precious metal group Johnson Matthey was the star performer after a broker upgrade from JPMorgan Cazenove, dealers said.

The upgrade created a stir among investors & the share price rose by 5.88 percent to close at 2,987 pence.

Builders’ merchant Travis Perkins was moreover in demand & was up 5.07 percent to 1,763 pence after an upgrade from Bank of America.

Brewing giant SABMiller was the biggest faller after a broker downgrade from Citigroup, slipping 1.46 percent to 2,970 pence.

Glencore Xstrata was moreover under heavy selling pressure after a gloomy assessment from Liberum, dealers said.

The downgrade pushed shares in the Anglo-Swiss miner down 1.40 percent to 331.20 pence.

On the currency markets, sterling stole a march on both the dollar & the single currency.

The pound rose to $1.5997 at 5:15pm from $1.5938 at the same time on Friday, while it moreover edged up to 1.1782 euros from 1.1761 over the same period.

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