Debt ceiling drags on equities

Equity markets are offside as traders display concern over US debt ceiling talks.

,As the deadlock between Democrats and Republicans over budget talks continues, investors are worried that a similar situation will occur when it comes to the debt ceiling discussions. Economists estimate that if an agreement is not reached by the self-imposed deadline of 17 October, the US government could run out of money between 22 and 31 October, and this is weighing on investor sentiment.

In London the mining sector is down 1.2%, as mineral extractors lost the most ground on the FTSE today after the HSBC China composite purchasing managers' index (PMI) slipped from 51.8 in August to 51.2 in September.

Direct Line has sold its life assurance business to Chesnara for $62 million. The insurer stated it will return the proceeds of the sale to its shareholders in the form of a special dividend. The stock is now trading at 208p, up 0.6% on the day.

In the US the Dow is down ten points at 14,925, as dealers display nerves concerning the political situation in Washington. After the close Alcoa will reveal its results, and if the report is stronger-than-estimated US index futures could rally.

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