LONDON (Alliance News) - UK equity indices are showing little life Monday as investors prefer to wait for more news on the political stalemate in Washington. After rallying at the tail end of last week on hopes that a deal was in the making to at least temporarily raise the US debt ceiling, investors have been disappointed by a reversion to stalemate amongst US lawmakers at the weekend.
By mid-morning Monday the FTSE 100 is marginally higher at 6,489.30, as is the FTSE 250 at 14,997.97. The AIM All-Share is flat at 786.50.
The tiny gains on London's blue-chip index are being led by Johnson Matthey, the speciality chemicals producer, is up 4% following a ratings upgrade to Overweight from JPMorgan.
Micheal Page International is weighing down the FTSE 250. Its shares have lost 5.8% after the recruitment company included a profit warning with its interim management statement. Company CFO Andrew Bracey also resigned on Friday, leaving Finance Controller Kelvin Stagg to step up as acting CFO.
Eurozone industrial production increased 1% in August, official data just released has shown. The reading came in ahead of expectations of a month-on-month increase of 0.8% and shows a big improvement from the previous reading in July, which showed a reduction of 1.5%.
The euro is little changed after the numbers, which were the main data event of the day. Currently the euro trades at USD1.3555. The pound also is fairly flat against the dollar, currently at USD1.5968, as forex markets prefer to wait for more out of Washington.
Gold prices remain soft, currently USD1,275.75 per ounce. Last week the yellow metal dropped to its cheapest level since mid-July as the risk rally saw investors flood back into equities. However, gold is still dropping slightly, even though the possibility of a debt-ceiling breach has returned. A renewed push by Indian authorities and other market participants to make greater use of gold in India, so as to reduce the need for imports, has weighed on the international price, suggest commodities analysts at Macquarie.
With the US celebrating Columbus Day on Monday, the data calendar is empty for the rest of the day, leaving all focus on further updates from Washington. The lack of panic at this stage suggests most believe US politicians will not let the debt ceiling be reached, but markets also seem to prefer to hold fire until there is more from the deal makers.
By Jon Darby; jondarby@alliancenews.com; @jondarby100
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Johnson Matthey (JMAT)