Markets were rangebound on Thursday as investors focused on mixed economic data as the US government shutdown extended into its third day.
"With little contagion from across the pond, at least until markets open, European indices are a touch higher this morning aided and abetted by positive corporate and macro data," said Brenda Kelly, Senior Market Strategist at IG.
The FTSE 100 snapped a four-day losing streak this morning, bouncing off a one-month low after figures showed an improvement in services activity in China in the Eurozone in September. However, declines in the mining sector due to falling metal prices were keeping a lid on gain today.
US stock futures however were pointing to a weak start on Wall Street later on.
PMIs in focus
China's official non-manufacturing purchasing managers' index rose from 53.9 to a six-month high of 55.4 in September, according to the National Bureau of Statistics, strengthening the third-quarter outlook for the world's second-largest economy.
Closer to home, the final reading of the Eurozone services PMI for September unexpectedly picked up to 52.2, surprising analysts who had expected no change (52.1).
Meanwhile, the UK services PMI eased from 60.5 to 60.3 last month (forecast: 60.5). However, analyst Blerina Uruci from Barclays said that the data "was broadly stable and remained consistent with a solid pace of expansion".
In other data this morning, Eurozone retail sales came in better than expectations: sales rose at an annual rate of 0.3% in August (forecast: -1.5%); and increased by 0.7% at a monthly rate (forecast: +0.2%).
Shutdown continues as budget talks prove "futile"
Over the in the States, the shutdown means that no data will be released by the government or its agencies, with jobless claims figures and Friday's highly-anticipated employment report now expected to be delayed. However, the ISM survey measuring activity in the services sector will still be on the agenda and is expected to fall from 58.6 to 57.
President Barack Obama last night met for face-to-face talks with Congress for the first time since the shutdown but both sides failed to come to an agreement over the budget with both sides unwilling to budge on positions.
The focus is now turning to the deadline of the debt ceiling on October 17th. If an agreement is not made to raise this limit, then the government will run out of the cash and will likely default on its debt obligations.
"The general consensus in the markets continues to be that a last minute deal between the Democrats and the Republicans will be struck before the debt ceiling deadline," said Market Analyst Craig Erlam from Alpari.
"No resolution would be devastating for the US economy and the markets, and would be felt throughout the world. No one benefits if a deal is not agreed, so one way or another, I'm convinced it will be done."
FTSE 100: Aviva gains on US disposal
Insurance group Aviva gained after completing the sale of its US business for a higher amount than it first expected. It will receive proceeds of $2.6bn (£1.7bn) from the sale of its US life and annuities business to Bermuda-based Athene Holdings, around $0.8bn more than it had announced last December.
easyJet rose strongly after raising its annual profit guidance on the back of strong demand in the second half. In a trading update ahead of its results for the year to the end of September 2013, the low-cost airline said it expects pre-tax profit of between £470m and £480m compared with the previous guidance of £450m to £480m.
British oil major BP was higher after saying it is "extremely pleased" with the decision by the US appeals court to halt some payments related to claims over the giant oil spill in the Gulf of Mexico back in 2010.
Falling metal prices dampened the share prices
of the miners this morning with Randgold Resources, Fresnillo, Vedanta, Antofagasta and Anglo American registering losses.
Sports Direct International was in the red after its Chief Executive Dave Forsey and Finance Director Bob Mellors each netted £6.4m after selling shares
from a bonus plan.
High Street bookie William Hill fell after third-quarter operating profits missed its own expectations by £20m. "During this quarter results were not as favourable as in the comparable period with outcomes - particularly in football - going the punters' way," Chief Executive Ralph Topping said.
Meanwhile, beverages group SABMiller was lower after Credit Suisse downgraded the stock from 'outperform' to 'neutral'. The bank said the stock trades at a 12% premium to the sector on a price-to-earnings ratio compared with an 8% premium historically.
FTSE 100 - Risers
Aviva (AV.) 417.50p +2.45%
Aberdeen Asset Management (ADN) 379.90p +1.58%
BAE Systems (BA.) 455.40p +1.58%
GlaxoSmithKline (GSK) 1,567.00p +1.33%
Unilever (ULVR) 2,348.00p +1.25%
Croda International (CRDA) 2,701.00p +1.24%
ITV (ITV) 176.80p +1.20%
Shire Plc (SHP) 2,475.00p +1.19%
Sainsbury (J) (SBRY) 389.90p +1.19%
Vodafone Group (VOD) 221.40p +1.12%
FTSE 100 - Fallers
Fresnillo (FRES) 914.50p -2.19%
Sports Direct International (SPD) 695.00p -1.91%
Randgold Resources Ltd. (RRS) 4,313.00p -1.89%
Vedanta Resources (VED) 1,072.00p -1.65%
International Consolidated Airlines Group SA (CDI) (IAG) 341.00p -1.45%
Anglo American (AAL) 1,481.00p -1.43%
SABMiller (SAB) 2,994.50p -1.35%
Antofagasta (ANTO) 813.50p -1.27%
Intertek Group (ITRK) 3,226.00p -1.22%
London Stock Exchange Group (LSE) 1,539.00p -1.16%
FTSE 250 - Risers
Rank Group (RNK) 158.00p +3.61%
Alent (ALNT) 365.90p +3.51%
Supergroup (SGP) 1,177.00p +3.16%
Ladbrokes (LAD) 171.10p +2.21%
Debenhams (DEB) 107.10p +2.19%
Booker Group (BOK) 134.00p +1.98%
Mitchells & Butlers (MAB) 396.90p +1.95%
BH Global Ltd. USD Shares (BHGU) 11.85 +1.94%
Hansteen Holdings (HSTN) 100.00p +1.83%
CSR (CSR) 533.50p +1.81%
FTSE 250 - Fallers
Ophir Energy (OPHR) 306.60p -3.71%
Polymetal International (POLY) 629.00p -2.93%
Imagination Technologies Group (IMG) 317.20p -2.40%
PayPoint (PAY) 1,066.00p -2.20%
Chemring Group (CHG) 289.00p -2.20%
African Barrick Gold (ABG) 155.50p -2.14%
Unite Group (UTG) 380.00p -2.11%
Kazakhmys (KAZ) 256.50p -2.10%
Telecity Group (TCY) 822.50p -1.79%
Lonmin (LMI) 308.40p -1.75%