The FTSE 100’s charge slowed on Thursday as talks to fix the looming US tax crisis appear to have hit a stumbling block.
The market had been boosted by optimism that President Obama and House Speaker John Boehner can come to an agreement over how to avoid the so-called ‘fiscal cliff’ – a series of tax hikes and spending cuts that some analysts have say will push the American economy into recession.
But now Obama has said he will not accept Boehner’s ‘Plan B’, which involves a short-term solution, as he wants a long-term fix.
The UK’s top share index still edged up 4 points or 0.05% to 5,966 on the back of a couple of days of strong gains.
Mike van Dulken from Accendo Market said: “The FTSE100 may have made a higher high on fiscal cliff optimism yesterday, meaning higher highs since early November; however, this has been negated overnight by renewed uncertainty as Obama threatens to veto Boehner’s plan ‘B’ to avoid tax hikes should a deal not emerge.”
Topping the FTSE 100 gainers was Scottish engineer Weir Group (LON:WEIR), which has agreed to take over Mathena, a US company that provides equipment and services used in fracking – the hydraulic fracturing method used to extract shale gas.
The £238mln deal, which led shares up almost 4%, sees Weir strengthen its foothold in the American shale gas sector.
The FTSE 250, the UK’s mid cap index, continued to rewrite the record books, hitting all-time highs for the third day in a row as it edged up further.
HMV (LON:HMV), however, fell 14% as it emerged that Christmas trading has got off to a slow start, heaping more pressure on the troubled CD and DVD retailer.
On London’s junior market, Amur Minerals (LON:AMC) shares shot up 28% on hopes that its application for the Kun-Manie licence in Russia will kick on.
The group said that there have been changes recently in legislation which should have a positive impact on the process of the issuance of the licence.
Amur had been waiting on the Ministry of Economic Development (MED) to determine the value of the nickel and copper concentrates to be produced at Kun-Manie.
This value is required for the purpose of calculating a one-off sum, payable upon conversion of a portion of the exploration licence area to that of the mining licence.
Tracking it north was Gasol (LON:GAS), which climbed 10% after it slotted in another piece of its plan to supply gas to West Africa.
The company has signed a strategic alliance with the Azerbaijan state oil company SOCAR.
The international marketing and development arm of SOCAR will supply all the liquefied natural gas (LNG) required for the project.
Gasol’s plan is to supply LNG to power and industrial customers in Benin, Togo and Ghana from ships converted to store and supply gas.
Other big risers on AIM included Beacon Hill Resources (LON:BHR), up 10%, Shaft Sinkers (LON:SHFT), 7% higher, Sound Oil (LON:SOU), which gained 6%, while Oxus Gold (LON:OXS) and Gemfields (LON:GEM) both lifted 5%.
Top tumblers were Triple Plate Junction (LON:TPJ) and IPSA Group (LON:IPSA), while SolGold (LON:SOLG) lost 11% despite encouraging results from its Cascabel gold-copper project in Ecuador.