Markets rally on debt deal hope
Stock markets staged a rally yesterday on reports US politicians have struck an eleventh hour deal on America's looming debt deadline.
The FTSE 100 Index had earlier plunged into the red as the prospect of the world's largest economy defaulting on its debt edged nearer, but by the close of the session updates from Washington had lifted it 22.5 points to 6571.6.
In New York, the Dow Jones Industrial Average surged 200 points ahead, a rise of more than 1%. Germany's Dax was also up, although France's Cac 40 failed to climb out of the red by the end of the session.
On currency markets, sterling slipped against a resurgent greenback, off one cent to 1.59 US dollars, while it was flat against the single currency at 1.18 euros.
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Royal Mail lost some of its post-flotation froth, down 3% or 14p to 475p – although investors are still enjoying a rise of more than 40% on the Government's price tag last week.
Some blue chips also remained under pressure after star fund manager Neil Woodford quit Invesco Perpetual.
Shares in firms in which he has built up holdings dropped after the announcement, with BAE Systems initially down again today before closing up 4.1p to 443.3p on rising hope from Washington.