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London open: US uncertainty pulls FTSE 100 back from three-week high

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UK markets opened lower on Wednesday morning, pulling back from a three-week high, as optimism over a deal in Washington to avert a default began to fade.

The FTSE 100 in London was registering small losses early on after hitting 6,549 on Tuesday, its highest level since September 24th.

Stocks on Wall Street slipped yesterday after talks over a House proposal to suspend the borrowing limit and fund the government through to early 2014 fell apart.

Senate Majority Leader Harry Reid and Republican Minority Leader Mitch McConnell resumed discussions last night with both parties saying they were confident that “an agreement is within reach”.

According to Financial Sales Trader Max Cohen from Spreadex, Senate aides have said the two leaders are looking at two possible ways of speeding the legislation through the chamber, “which often can bog down for days with procedural hurdles”.

Fitch was putting further pressure on lawmakers after placing its prized ‘AAA’ credit rating for the US on ‘negative watch’. The ratings agency said that prolonged negotiations risk “undermining confidence in the role of the US dollar as the pre-eminent global reserve currency, by casting doubt over the full faith and credit of the US”.

Unemployment and jobless claims figures from the UK are due out this morning along with consumer-price inflation data from the Eurozone. However with just one day before the US is set to hit its debt ceiling, developments on Capitol Hill are likely to determine the direction of markets during today’s session.

Engineering group IMI’s third-quarter results were in line with expectations with revenue 3% ahead of last year, the company said, giving the stock a boost this morning. In a trading update for the three months to end of September, the company said it will deliver full-year results that meet current market forecasts.

Telecoms giant BT was higher after Goldman Sachs upgraded the stock to ‘conviction buy’. Serco and Kentz Corp also advanced after both stocks were lifted by HSBC to ‘overweight’.

Luxury brand Burberry declined for a second straight day after the surprise exit of long-running chief Angela Ahrendts. Current Chief Creative Officer Christopher Bailey is to be her successor.

Aviation services provider BBA Aviation was in the red today after saying that its Chairman of six years, Michael Harper, is to step down from the board next year. He will be replaced by outgoing Invensys Chairman Sir Nigel Rudd.

Online gaming group 888 rose after saying third-quarter revenue increased 2%, helped by strong progress at its Casino division.

Source: ShareCast