The FTSE 100 slipped back after a strong start this morning as markets await testimony this afternoon from incoming US treasury secretary Janet Yellen.
After a quiet day yesterday which saw the index shed 0.2 per cent, London’s leading market rose 0.6 per cent at the opening bell to 6,762 points.
But after a couple of hours of trading it pared early gains to rise 0.3 per cent instead.
Engine maker Rolls-Royce led the way, with shares up 4.0 per cent. HSBC was also among the biggest risers, up 2.5 per cent.
The FTSE 250 of midcap companies also rose 0.1 per cent to stand at 20,663 points.
Across Europe, the German DAX was up 0.5 per cent and France’s CAC was up 0.4 per cent.
After several dull sessions, the morning’s jump raised hopes that the FTSE could recover some of the enthusiasm with which it started the year.
This afternoon Yellen, a one-time Federal Reserve chair, will sit down with lawmakers to lay out the Biden administration’s plans for the struggling US economy.
CMC Markets’ Michael Hewson said: “Yellen will also need to convince the more sceptical cohort of US lawmakers that the new Biden fiscal plan, where there is agreement on another $1,400 stimulus cheque, but where the increases in the minimum wage and other safety net programs, are slightly more problematic, won’t cause an unsustainable rise in the US national debt.
“This is the main concern of the more fiscally conservative US lawmakers, and something that Janet Yellen will have to use all of her political skills to convince is necessary in the short term at least.”
Overnight, shares in Asia rose on the expectation of a new administration, with Biden’s swearing-in just a day away.
The Nikkei gained 1.3 per cent after two sessions of losses, while markets also gained in Hong Kong and Seoul.