UK markets opened broadly flat on Tuesday after the failure by US politicians to agree on a budget prompted the first partial government shutdown in Washington in 17 years.
The Senate last night voted down a House of Representatives-passed bill that had called for a one-year delay in President Barack Obama's flagship 'Affordable Care Act', something that the Democrats said they would have never agreed to.
As the start of the new fiscal year begins in the States some 800,000 federal employees will be placed on unpaid leave and sent home as the US government is forced to shut down non-essential agencies. The last time there was a government shutdown was back in the mid-90s.
"Clearly both the Democrats and Republicans are more concerned with gaining political points and pointing the finger than actually doing what they're elected to do," said Market Analyst Craig Erlam from Alpari.
Economists are now trying to figure out what effect this will have on the US economic outlook after Obama said a shutdown would throw a "wrench" into the recovery and have a "real impact on real people right away". Moody's believes that a three-to-four-week shutdown could shave as much as 1.4 percentage points off of fourth-quarter gross domestic product growth.
Rumours that Friday's all-important US non-farm payrolls report could be released earlier or later than planned due to the shutdown also prompted investors to scale back risk appetite on equity markets this morning.
According to some observers that is exactly what happened back in 1995, as a budget impasse prompted the government to send out consumer price index data early.
Wolseley gains after "solid progress"
FTSE 100 plumbers merchant Wolseley gained after saying it experienced a year of "solid progress in varied markets" as it saw headline profits more than double in the year to July 31st due to lower impairments and exceptional items. The company also raised its dividend by a tenth and revealed a £300m capital return to shareholders via a special dividend and share consolidation.
Consumer products group Unilever was a heavy faller after markets reacted to a trading update released after the close last night which said that the company witnessed a weakening in the market growth of many emerging countries in the third quarter.
Other consumer staples stocks including SABMiller, Diageo, Reckitt Benckiser and British American Tobacco were also lower this morning,
Property investment and development business St. Modwen Properties rose after saying it has continued to perform strongly since the half year, buoyed by a strengthening housing market, and it remains confident of hitting full-year targets.
FTSE 100 - Risers
Wolseley (WOS) 3,288.00p +2.85%
Experian (EXPN) 1,204.00p +2.29%
Rolls-Royce Holdings (RR.) 1,134.00p +1.98%
Aviva (AV.) 401.90p +1.29%
easyJet (EZJ) 1,294.00p +1.25%
Intertek Group (ITRK) 3,342.00p +1.12%
Barclays (BARC) 268.35p +1.07%
Mondi (MNDI) 1,054.00p +1.05%
BAE Systems (BA.) 458.70p +0.95%
CRH (CRH) 1,492.00p +0.95%
FTSE 100 - Fallers
Unilever (ULVR) 2,347.00p -3.81%
SABMiller (SAB) 3,070.00p -2.34%
Reckitt Benckiser Group (RB.) 4,448.00p -1.59%
Fresnillo (FRES) 961.00p -1.23%
Diageo (DGE) 1,943.00p -1.12%
Imperial Tobacco Group (IMT) 2,268.00p -0.83%
Aggreko (AGK) 1,593.00p -0.69%
Coca-Cola HBC AG (CDI) (CCH) 1,838.00p -0.65%
Tate & Lyle (TATE) 732.00p -0.61%
Royal Dutch Shell 'A' (RDSA) 2,028.50p -0.56%
FTSE 250 - Risers
Enterprise Inns (ETI) 149.00p +3.11%
Regus (RGU) 186.10p +2.25%
St. Modwen Properties (SMP) 310.00p +1.97%
BH Global Ltd. USD Shares (BHGU) 11.85 +1.89%
Diploma (DPLM) 665.00p +1.84%
BH Macro Ltd. EUR Shares (BHME) € 21.50 +1.61%
Pace (PIC) 257.90p +1.58%
Rank Group (RNK) 156.30p +1.49%
ITE Group (ITE) 275.80p +1.47%
Keller Group (KLR) 1,053.00p +1.35%
FTSE 250 - Fallers
Perform Group (PER) 540.00p -3.57%
Evraz (EVR) 124.90p -2.42%
Daejan Holdings (DJAN) 3,840.00p -1.92%
Dechra Pharmaceuticals (DPH) 705.50p -1.74%
Carpetright (CPR) 638.00p -1.62%
Xaar (XAR) 785.50p -1.57%
Thomas Cook Group (TCG) 151.00p -1.56%
Kenmare Resources (KMR) 28.08p -1.47%
Menzies(John) (MNZS) 789.00p -1.44%
Petra Diamonds Ltd.(DI) (PDL) 117.30p -1.43%