FTSE 100 at new high amid US shutdown optimism

The FTSE 100 hit an all-time best on Monday, passing 9,800 for the first time, as hopes grow for an end to the US government shutdown.

The FTSE 100 Index closed up 104.58 points, 1.1%, at 9,787.15, a record closing peak.

It had earlier set a new intra-day best level of 9,800.35.

The FTSE 250 ended 194.88 points higher, 0.9%, at 21,968.27, and the AIM All-Share climbed 8.07 points, 1.1%, at 757.54.

The risk-on mood came as the US Senate cleared the way for a formal debate on a motion to resume funding to federal agencies.

The Republican-led chamber approved a procedural vote after a handful of Senate Democrats crossed over to permit debate on a measure that could end the longest shutdown in US history.

“The prospect that the longest US government shutdown in history may end in the next few days has bolstered risk appetites,” said Marc Chandler, at Bannockburn Capital Markets.

In European equities on Monday, the CAC 40 in Paris closed up 1.5%, while the DAX 40 in Frankfurt soared 1.7%.

In New York, the Dow Jones Industrial Average was little changed at around the time of the London close.

The S&P 500 index was 0.7% higher, while the Nasdaq Composite advanced 1.3%.

Nvidia rose 3.9% ahead of results next week while Advanced Micro Devices climbed 5.7% ahead of Tuesday’s analyst day at which new financial targets are expected to be unveiled.

Morgan Stanley said the developments mean the government shutdown could end this week.

The bank thinks the first major data print post-shutdown is likely to be the September employment report, with other data on inflation and spending probably taking a further one to two weeks.

“We think the data in-hand by the time of the December Fed meeting will be enough for them to cut,” Morgan Stanley added.

Kathleen Brooks, at XTB, said the end of the US government shutdown “comes at the right time”, just before Thanksgiving.

“This should allow American families to fly all over the country for the holidays and it should mean that supply chains are fully functioning for the biggest shopping weekend of the year,” she observed.

Sterling was quoted at 1.3160 dollars at the time of the London equities close on Monday, lower compared with 1.3166 dollars on Friday.

The euro stood at 1.1554 dollars, down against 1.1582 dollars. Against the yen, the dollar was trading higher at 153.97 yen, compared with 153.07 yen.

The yield on the US 10-year Treasury was at 4.11%, widened from 4.07% on Friday. The yield on the US 30-year Treasury was quoted at 4.70%, stretched from 4.68%.

Back in London, the countdown to the Budget at the end of November continues.

Speaking to the BBC, Chancellor Rachel Reeves said the Budget will be focused on the cost of living, getting government debt down and cutting NHS waiting lists.

Speaking to Radio 5 Live, Ms Reeves would not be drawn on specific measures but said tax and spending decisions will be influenced by a productivity review by the Office for Budget Responsibility and ongoing conflicts and disruptions to trade.

It will be a “difficult” Budget, she said, but one focused on “fairness” and growing the economy.

Diageo rose 5.2% after it appointed former Tesco boss Dave Lewis as its new chief executive.

The London-based owner of Guinness stout and Johnnie Walker whisky said Mr Lewis, who led Tesco from 2014 to 2020, will join Diageo at the start of 2026.

Prior to his time at Tesco, Mr Lewis spent nearly three decades at Marmite owner Unilever, where he earned the moniker “drastic Dave” in recognition of his reputation as a cost cutter and turnaround specialist.

Jefferies analyst Edward Mundy said the appointment “ends the uncertainty over leadership transition and brings a heavyweight leader with extensive CEO experience on both brand building and transformation”.

“Not only does he have extensive CEO experience, strong brand-building capabilities and a keen cost focus, he played an important role in changing the culture and restoring the Tesco brand,” Mr Mundy commented.

Gains in the gold price lifted blue-chips Fresnillo and Endeavour Mining 5.4% and 4.5% respectively, while on the FTSE 250 Hochschild Mining jumped 8.0%.

Gold traded higher at 4,091.42 dollars an ounce on Monday against 4,012.24 dollars on Friday.

Entain rose 3.0% as Investec upgraded to “buy” from “hold”, while British Airways owner IAG rallied 3.7% after Friday’s heavy falls after third-quarter news.

On the FTSE 250, RHI Magnesita jumped 17% as it said performance has improved in the second half of 2025 despite subdued demand conditions.

The Vienna-based refractory products maker said adjusted earnings before interest, tax and amortisation were 136 million euros in the four months to October, significantly ahead of the run-rate in the first half of 2025 and in line with guidance.

In the first six months of 2025, RHI Magnesita reported Ebita of 141 million euros.

JTC fell 4.3% after agreeing a £2.7 billion all-cash takeover by Permira Advisers worth 1,340 pence per share.

RBC Capital Markets said conversations with shareholders suggested that price expectations were higher at 1,450p, “so we think there will be a degree of disappointment”.

“We are not convinced that this is yet a done deal however,” the broker added.

Brent oil was quoted slightly lower at 63.45 dollars a barrel at the time of the London equities close on Monday, from 63.51 dollars late on Friday.

The biggest risers on the FTSE 100 were Fresnillo, up 118 pence at 2,310p, Diageo, up 90p at 1,816.5p, Endeavour Mining, up 134p at 3,142p, Polar Capital Technology Trust, up 20p at 472p and SSE, up 74.5p at 1,943p.

The biggest fallers on the FTSE 100 were London Stock Exchange, down 198p at 9,072p, Rightmove, down 10.2p at 563.4p, Hikma Pharmaceuticals, down 27p at 1,555p, BT, down 2.25p at 177.1p and Compass, down 26p at 2,479p.

Tuesday’s global economic calendar has UK jobs and average earnings data plus the British Retail Consortium’s retail sales monitor.

Tuesday’s UK corporate calendar has half-year results from telecommunications group Vodafone and sales, marketing and support services provider DCC.

Contributed by Alliance News