Investors reacted positively to Obama’s counter-offer for Republicans yesterday, which included a major change in position on tax hikes for the wealthy.
Cruise operator Carnival, security group G4S and steelmaker Evraz all buoyed the FTSE 100 in early trading.
On the FTSE All-Share, oil shares were doing well, with development firm Ruspetro adding 4.66 per cent. Fortune Oil rose 4.65 per cent, following its announcement yesterday that China Gas had snapped up its gas business.
Central Europe-focused New World Resources rose 4.32 per cent, and Hardy Oil was up 2.1 per cent.
Elsewhere, Imagination Technologies rose almost three per cent and software firm Fidessa was up more than 3.5 per cent.
Continuing its losses yesterday, temporary power solutions firm Aggreko sank 1.56 per cent in early trading, making it the biggest blue chip faller. Other blue chip losers included miners Randgold Resources and Polymetal.
Engineers led the FTSE All-Share down in early deals. Industrial chain supplier Renold fell 2.5 per cent, while specialist fabric manufacturer Fiberweb sank 1.45 per cent.
Insurers also had a poor showing, with Chesnara falling two per cent and Catlin down 1.25 per cent.
UK banking shares were in positive territory this morning. HSBC was up 0.14 per cent, RBS rose 1.39 per cent, Barclays added 1.65 per cent and Lloyds Banking Group increased 0.66 per cent.
In Asia, the Nikkei closed 0.96 per cent up while in the US the Dow Jones closed 0.76 per cent up.