Daily market update: US government shutdown, FTSE 100, JTC

Glimmers of hope that an end might be in sight to the longest running US government shutdown in history put markets in a positive mood.

A vote in the Senate is an important first step but any agreement still needs to clear a vote in the House of Representatives along with several other hurdles. A key impact on the markets of the impasse, beyond the hit to the wider economy, has been the lack of data as key releases on areas like the jobs market have been delayed.

This has created a considerable dose of the uncertainty which markets famously hate and it is also hampering the ability of the Federal Reserve to make informed decisions on interest rates.

In this context, it’s not a surprise to see investors react positively to signs of progress, with Asian shares higher, indices on the front foot in Europe and US futures pointing towards gains when Wall Street opens later.

Selling in some traditional defensive names, which have a material weighting in the index, meant the FTSE 100 slipped a bit behind its European counterparts on Monday.

JTC

A trend that has boosted UK stocks in recent months reared its head again as private equity agreed a £2.7 billion deal for JTC, which provides administrative services to investment funds.

In common with a number of deals, the price is pitched at a material premium to the undisturbed share price before news of a potential offer emerged in mid-August.

As such it might be cause for celebration for shareholders in the short term. However, longer term it will further thin the ranks of the UK stock market.

It is also the case that a company which is still growing at a decent lick might have been able to organically increase its valuation beyond the takeout price given more time.