European stocks rally as US shutdown concerns ease

​​​FTSE 100 and European indices climb on risk appetite

​European equity markets staged a broad-based rally as the US Senate made progress towards ending the government shutdown. The FTSE 100 advanced approximately 0.7%, while the broader STOXX Europe 600 index climbed around 1.1%.

​The positive sentiment stemmed from the Senate's 60-40 vote to advance legislation that would reopen the government and fund agencies through late January. This development eased one of the key concerns weighing on global markets in recent sessions.

​Cyclical sectors led the advance across European bourses. Travel and leisure stocks, miners, banks, energy companies and construction firms all posted strong gains, reflecting renewed investor confidence in economic growth prospects.

​Defensive sectors lagged the broader market rally. Telecoms and utilities underperformed as traders rotated out of safe-haven positions and into more economically sensitive areas of the market.

​Diageo shares jump on new CEO appointment

​Diageo shares surged as much as 7.9% after the drinks giant announced Dave Lewis would take over as chief executive from 1 January. Lewis previously led Tesco through a successful turnaround as its CEO.

​The market responded positively to the appointment, viewing Lewis's proven track record in the consumer sector as a significant positive for Diageo. His experience navigating complex retail challenges could prove valuable for the spirits maker.

​Lewis takes the helm at a time when premium drinks brands face mixed trading conditions. While demand for high-end spirits remains relatively robust, some markets have shown signs of softening consumer spending.

​The share price reaction suggests investors believe Lewis can drive operational improvements and strategic initiatives to enhance shareholder value. His appointment marks a new chapter for one of the UK's largest consumer goods companies.

​Bonds retreat as risk-on sentiment returns

​Government bonds sold off across major markets as the risk-on tone prompted investors to reduce exposure to safe-haven assets. UK gilts and US Treasuries both experienced selling pressure during the session.

​British debt underperformed compared to core European bonds, with gilt yields rising more sharply than German bunds. This relative weakness reflected specific UK factors alongside the broader risk appetite shift.

​The bond market moves reinforced the equity rally narrative, with capital flowing out of defensive fixed income and into riskier assets. Yield curves steepened modestly as longer-dated bonds sold off more than short-term paper.

​Trading volumes picked up as the session progressed, indicating genuine conviction behind the moves rather than thin liquidity driving prices. The coordinated sell-off across government bond markets suggested a broad reassessment of risk.

​Gold and silver rebound on Fed rate cut hopes

​Precious metals staged a recovery as traders increased bets on a potential Federal Reserve (Fed) rate cut next month. Gold and silver both firmed during the session.

​Market pricing now implies approximately a 58% probability of a Fed rate cut at the December meeting. Lower interest rates typically support precious metals, as they reduce the opportunity cost of holding non-yielding assets.

​The rebound in gold and silver came despite the stronger risk appetite in equity markets. This suggests some traders view the metals as insurance against potential inflation or currency volatility rather than pure safe-haven plays.

​M&A activity and corporate updates

​Private equity firm Permira agreed to acquire JTC for approximately £2.7 billion, marking another significant deal in the financial services sector. The transaction highlights continued appetite for well-positioned businesses despite broader economic uncertainties.

Big Yellow Group extended the deadline for its takeover offer from Blackstone to 8 December, giving both parties more time to finalise terms. The storage company has attracted attention from the US investment giant as demand for flexible space solutions remains solid.

SSE explored various options to raise capital for increased grid and renewable energy spending, including a potential multibillion-British pound share sale. The utility's funding requirements reflect the substantial investment needed for UK energy infrastructure upgrades.

​Chemring announced plans to discontinue its Alloy Surfaces operation after weak demand in the US market. The defence company's decision underscores challenges facing some industrial sectors amid uneven global demand patterns.