The FTSE 100 is expected to start the new week strongly higher, snapping a two-day losing streak, after reports that the US government shutdown may be nearing an end boosted global investor sentiment.
On the futures market, the London blue-chip index was forecast to rise 83 points at Monday’s open, following last week’s modest 34-point decline, which left it at 9,682.57 by Friday’s close.
The upbeat mood extended across global markets, with US stock futures trading sharply higher after a bruising week that saw the Dow Jones lose 1%, the S&P 500 fall 1.7%, and the Nasdaq Composite drop 3.65%.
In Asia, major benchmarks also advanced, led by Hong Kong’s Hang Seng, up 1.4%, and Japan’s Nikkei 225, which climbed 1.3%.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said markets were encouraged by signs of political progress in Washington:
“Last week was a tough one, with a cocktail of rare but discouraging US data from private-sector surveys in the absence of government statistics due to the shutdown. Falling yields failed to lift risk appetite, and even strong tech earnings couldn’t lure investors back on board.
But this morning, things look calmer. The news that the US government shutdown could finally come to an end lifts market sentiment, after the Senate put together the 60 votes needed to push the deal through its first stage. It’s only the opening act in what could still be a drawn-out political drama, but investors are seizing on any sign of progress to end the longest US government shutdown in history.”
Analysts said the prospect of a resolution could help restore data visibility for policymakers and traders, who have been flying blind on key indicators such as inflation and employment, making it harder to gauge the Federal Reserve’s next move.
