European markets have rallied strongly on Monday as hopes were raised that the US fiscal cliff package of automatic tax increases and spending cuts can be avoided.
At 14.25, the FTSE 100 was up more than 1.5 per cent to stand at 5691.12, while in Europe, the French Cac 40 and the German Dax both rose 1.9 per cent. The FTSEurofirst also rose 1.5 per cent.
Asian shares also rose earlier today on the back of renewed hopes. The Nikkei 225 in Japan was up 1.4 per cent at close, while the Hong Kong Hang Seng was up 0.5 per cent.
Hopes were raised after congressional talks in which Republicans and Democrats both appeared willing to compromise over budgets to tackle the US fiscal cliff.
According to the FT, John Boehner, the Republican speaker of the House of Representatives, and Mitch McConnell, the top Senate Republican, both said they had put extra revenues on the table adding the tone was markedly different to previous meetings.
Barclays has made the biggest gain in the FTSE 100 having seen its shares rise by 5.2 per cent. Eurasian Natural Resources and Rangold Resources have also seen shares rise by 4.3 and 3.7 per cent, respectively.
The FTSE 100 fell 2.8 per cent last week as concerns were raised about the US fiscal cliff as well as continued eurozone unrest. The blue-chip index closed at its lowest level in four months on Friday.