London open: Fiscal cliff deal ignites risk appetite

The FTSE 100 surged on Wednesday morning as investors celebrated the news that the fiscal cliff deal Stateside, with mining and banking stocks benefitting from the increase in risk appetite. "It may have come at the last minute, but US lawmakers finally managed to find some common ground by voting through a package of policies designed to avoid the immediate fiscal cliff," said Joe Rundle, head of trading at ETX Capital. "Financial markets have responded accordingly with Asian shares performing strongly and European markets posting sharp gains in the first trading day of 2013 and US markets are likely to react in the same fashion."US President Barack Obama praised a last minute deal to avoid the fiscal cliff, speaking at a press conference shortly after the House of Representatives passed a Senate-backed bill to stop massive tax rises and spending cuts, by 257 votes to 167. A day before it had cleared the Senate by a majority of 89 votes to 8. The fiscal cliff - scheduled tax rises of around $536bn and spending cuts of $109bn - was widely expected to throw the US economy back into recession if politicians couldn't break months of impasse. But the fiscal headache is far from over as talks over spending cuts go on and the US Treasury announced the country has hit its borrowing limit again. Miners and banks jump early onRiskier assets in the mining and banking sectors were among the best performers in London this morning, with Glencore, Barclays, Rio Tinto, Vedanta and Lloyds making decent gains.Oil giant BP rose after announcing the "successful start of production" at the Skarv field in the Norwegian Sea, adding new output from one of its core higher-margin areas.Sector peer Shell was subdued on reports that its Kulluk drilling rig has ran aground off the coast of Alaska after being caught in a storm.Engineering support services firm Babcock was higher after saying that it has acquired liquid gas plant unit LGE Process from Weir for £23m.FTSE 100 - RisersEvraz (EVR) 271.50p +4.87%Rio Tinto (RIO) 3,666.50p +4.41%Barclays (BARC) 273.20p +4.12%Eurasian Natural Resources Corp. (ENRC) 295.50p +4.05%Melrose Industries (MRO) 232.00p +3.80%Antofagasta (ANTO) 1,372.00p +3.63%Vedanta Resources (VED) 1,198.00p +3.54%Glencore International (GLEN) 363.10p +3.36%Anglo American (AAL) 1,955.00p +3.22%Lloyds Banking Group (LLOY) 49.45p +3.19%FTSE 100 - FallersBritish American Tobacco (BATS) 3,101.50p -0.62%Morrison (Wm) Supermarkets (MRW) 261.70p -0.49%FTSE 250 - RisersChemring Group (CHG) 240.90p +4.92%Centamin (DI) (CEY) 40.88p +4.15%Essar Energy (ESSR) 124.00p +3.77%Fidessa Group (FDSA) 1,562.00p +3.31%Kenmare Resources (KMR) 32.10p +3.22%Ferrexpo (FXPO) 259.10p +3.14%Hays (HAS) 84.65p +2.86%Hochschild Mining (HOC) 498.20p +2.81%Man Group (EMG) 85.00p +2.72%Redrow (RDW) 170.40p +2.71%FTSE 250 - FallersKCOM Group (KCOM) 70.80p -3.08%Barr (A.G.) (BAG) 485.00p -2.08%Direct Line Insurance Group (DLG) 212.80p -1.66%Dunelm Group (DNLM) 689.00p -1.22%Computacenter (CCC) 416.90p -1.21%Dairy Crest Group (DCG) 380.00p -1.09%BH Macro Ltd. GBP Shares (BHMG) 1,950.00p -1.02%Pace (PIC) 186.50p -1.01%ITE Group (ITE) 244.20p -0.85%Telecom Plus (TEP) 917.00p -0.81%BC