Equities up as US nears debt limit deal

Markets have rallied this afternoon as reports emerge from the US that its Senate is close to agreeing a deal to raise the US debt ‘ceiling’ and reopen government services.

The FTSE 100 index - which had been trading lower for most of the day - is now up 0.42 per cent, while the S&P 500 and Nasdaq indices in the US have opened higher.

According to the Financial Times a deal is being discussed by Democrats and Republicans in the US Senate as the October 17 deadline for raising the debt limit looms. After this date the country will not be able to borrow more money if a deal is not agreed.

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Republicans had been stalling any proposals in a bid to force president Barack Obama to cut back on his healthcare reforms, but the Financial Times reports that the programme - dubbed “Obamacare” - is unlikely to be significantly affected by the latest discussions.