Markets perk up on US debt hopes

Partial shutdown in US government has entered tenth day.

Written by Associated Press | Published: October 11, 2013 2:54:42 am

Financial markets were decidedly perkier Thursday as President Barack Obama was set to meet with top Republican leaders in an effort to end the budget impasse that has gripped Washington over the past few weeks.

With the partial shutdown of the US government entering a tenth day and a deadline to raise the debt ceiling just a week away,investors across financial markets are focused on developments in Washington. One option reportedly being considered to break the standoff has been a short-term increase in the debt ceiling,an encouraging sign.

Treasury Secretary Jacob Lew,meanwhile,told a Congressional committee that the president was ready to negotiate over the future direction of fiscal policy but not over whether the US pays its bills.

In Europe,the FTSE 100 index of leading British shares closed up 1.5 per cent at 6,430.49 while Germany’s DAX rose 2 per cent to 8,685.77.

In the US,the Dow Jones industrial average was up 1.6 per cent at 15,032 while the broader S&P 500 index rose 1.6 per cent to 1,684. The dollar has also settled somewhat in recent days following losses that sent it near a year-low against the euro.

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