Sunday 20 April 2014

European shares recover on hopes that US will avert ‘fiscal cliff’

EUROPEAN shares recovered to close slightly higher on Wednesday on expectations that U.S. lawmakers would be able to avert the so-called "fiscal cliff" of scheduled tax rises and spending cuts from 2013.

U.S. House Speaker John Boehner voiced optimism that Republicans could broker an agreement with the White House to avoid the fiscal crisis, saying that Republicans were willing to put revenues on the table if Democrats agreed to spending cuts.

His comments came a day after U.S. Senate Majority Leader Harry Reid said he was disappointed there had been "little progress" among Democrat and Republican lawmakers on the issue.

"Just 24 hours ago there was a feeling that Democrats and Republicans were a lot further apart. Now it seems they are really willing to cut a deal on (the fiscal cliff) and get it right for the United States," Angus Campbell, head of market analysis at Capital Spreads, said.

"There is a degree of optimism that a deal will be reached before the year end."

The FTSEurofirst 300 index of top European shares provisionally closed 0.2pc higher at 1,109.33 points after falling to a low of 1,100.79 earlier in the session.


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