London’s leading share index hit a record high on Monday, with the FTSE 100 closing at 9,787.15 points - up 104.58 points.
The blue-chip index briefly passed the 9,800 mark for the first time in its history, reaching 9,800.35 before easing slightly by the end of trading.
Investor confidence was lifted by progress in Washington, where the US Senate moved closer to resolving the long-running federal funding deadlock.
A procedural vote in the Republican-controlled chamber, backed by several Democratic senators, paved the way for talks on legislation to end the United States’ longest-ever government shutdown.
This political progress sparked renewed investor confidence across global markets.
Marc Chandler of Bannockburn Capital Markets observed that "the prospect that the longest US government shutdown in history may end in the next few days has bolstered risk appetites".
Morgan Stanley analysts suggested the closure could conclude within the week, with significant economic data releases expected to follow.
The US government shutdown happens when Congress fails to agree on a budget or pass the bills needed to fund federal agencies. Without that approval, parts of the government literally run out of money -forcing departments to close, staff to be furloughed, and services like national parks or some benefits to pause.
The current situation in Washington centres on a stalemate between Republicans and Democrats over federal spending priorities. The Republican-controlled Senate has now taken a step forward by approving a procedural vote that allows formal debate on a new funding bill. This doesn’t end the shutdown yet, but it means negotiations can properly begin on legislation to reopen the government.
If both chambers — the Senate and the House of Representatives — eventually approve the funding measure and it’s signed by the President, the shutdown would officially end.
FTSE 100 smashes record high amid hopes of US shutdown deal | GETTY/GOOGLE
Markets are reacting positively because this move reduces uncertainty and signals progress toward resolving the longest government closure in US history, which has been weighing on confidence, economic activity, and investor sentiment worldwide.
The investment bank anticipates September's employment figures will emerge first, whilst inflation and expenditure statistics may require an additional fortnight to materialise.
"We think the data in-hand by the time of the December Fed meeting will be enough for them to cut," Morgan Stanley stated.
Kathleen Brooks from XTB highlighted the fortuitous timing, noting this development "comes at the right time" before America's Thanksgiving holiday.
She remarked that resolution would enable nationwide travel for families and ensure supply chains operate effectively during the year's busiest shopping period.
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Spirits giant Diageo experienced a 5.2 per cent share price surge after revealing that former Tesco chief executive Dave Lewis would assume leadership responsibilities from early 2026.
The appointment of Mr Lewis, who steered Britain's largest supermarket chain between 2014 and 2020, ends speculation surrounding succession planning at the beverages company behind Guinness and Johnnie Walker.
Before his tenure at Tesco, Lewis accumulated nearly thirty years of experience at consumer goods company Unilever, where colleagues dubbed him "drastic Dave" for his reputation as an efficiency expert and corporate revival specialist.
Jefferies analyst Edward Mundy welcomed the appointment, stating it "ends the uncertainty over leadership transition and brings a heavyweight leader with extensive CEO experience on both brand building and transformation".
Mr Mundy emphasised Mr Lewis's proven track record in cultural transformation and brand rehabilitation during his successful overhaul of Tesco.
Precious metals miners benefited substantially from gold's appreciation to $4,091.42 per ounce, up from $4,012.24 on Friday.
Fresnillo advanced 5.4 per cent whilst Endeavour Mining climbed 4.5 per cent, with mid-cap constituent Hochschild Mining soaring 8.0 per cent.
Vienna-headquartered RHI Magnesita jumped 17 per cent after reporting enhanced second-half performance despite challenging demand conditions. The refractory products manufacturer disclosed adjusted earnings before interest, tax and amortisation of €136million for the four months ending October, substantially exceeding first-half run rates.
Conversely, JTC declined 4.3 per cent following its £2.7billion cash acquisition agreement with Permira Advisers at 1,340 pence per share.
RBC Capital Markets noted shareholder expectations had centred around 1,450 pence, suggesting "there will be a degree of disappointment", whilst questioning whether the transaction would reach completion.
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