3rd Oct 2013 09:29
LONDON (Alliance News) - UK stocks are trading close to flat mid-morning Thursday as the US government impasse persists and mixed data is released across the world.
Investors remain in wait-and-see mode early Thursday as the US government was shutdown for the third successive day. US President Barack Obama and congressional leaders met for the first time since the shutdown in an attempt to bring an end to the closures. However, the negotiations proved fruitless, with neither the Democrats or the Republicans willing to compromise. Whilst Obama described the discussions as "useful", Senate Majority Leader Harry Reid reported that the two parties are "locked in tight on Obamacare".
With the October 17 debt ceiling deadline just a fortnight away, the continued standoff looks set to increase market caution. If neither party backs down before this deadline, the government faces both a credit-rating downgrade and the possibility that it will default on some of its debt.
Traders await further developments.
Global data released Thursday has been largely mixed. Overnight, China's official non-manufacturing PMI index hit a six-month high, rising to 55.4 in September from 53.9 in August.
Similarly, Markit services PMI data from Italy, France and the EU was strong. All three countries increased from August and came in ahead of consensus forecasts, according to FXStreet.com.
UK figures came in at 60.3 from 60.5 in August, but ahead of the expected 60. Germany's data rose from August, but were behind expectations.
By mid-morning, the FTSE 100 is trading up 0.2% at 6,449.7, the FTSE 250 is flat at 14,892.64, whilst the AIM All-Share index is down 0.1% at 781.04.
At the individual stock level, Aviva is the biggest gainer on the blue-chip index. The financial services provider announced Wednesday that it had completed the sale of its US operations to Athene Holding Ltd in a deal worth USD2.6 billion, some USD800 million more than previously announced.
Conversely, Fresnillo, down 2.7%, and Randgold Resources, down 2.4%, lead the fallers on the FTSE 100. The gold miners are struggling on the back of a decrease in the price of gold. The precious metal is currently trading 0.5% lower at USD1,309.87 per ounce.
US initial and continuing jobless claims are scheduled for 1330 BST, with US ISM non-manufacturing PMI set to be released at 1500 BST.
US FOMC Chairman Ben Bernanke is expected to give a speech Thursday.
By James Kemp; [email protected]; @jamespkemp
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