Market update: Silvio Berlusconi pledges support for Italian prime minister in surprise U-turn – 03.10.2013

Source: Henderson Global Investors

US stocks closed with moderate losses on Tuesday (S&P 500 -0.1%, Dow Jones -0.4%), as investors’ risk appetite was curbed by the second day of the US government partial shutdown. The latest update on the jobs front from the ADP Research Institute revealed an increase of 166,000 more workers in September. However, this figure missed consensus estimates for a rise of 180,000.

In Asia, the Chinese official services purchasing managers' index (PMI) for September rose to 55.4, up from August’s reading of 53.9. A reading of more than 50 signals sector expansion.

This morning the FTSE Eurofirst 300 and FTSE 100 are up 0.1% and 0.3% respectively. Yesterday European Central Bank (ECB) President Mario Draghi said the eurozone’s recovery continues to be "weak, fragile, uneven”. The ECB left its benchmark interest rate at 0.5% and said this was likely to remain for an extended period. Meanwhile, Italian Prime Minister Enrico Letta received a boost yesterday after Silvio Berlusconi, leader of the People of Freedom party (PdL) made a last minute U-turn by supporting Mr Letta in a confidence vote. In stock news, BP’s shares are rising this morning following a legal reprieve; the oil giant could save on billions of extra costs relating to the Gulf of Mexico oil spill in 2010.