London stocks opened higher on Monday as relief spread through global markets after Washington reached a deal to end the US government shutdown.
The FTSE 100 climbed 0.7% to 9,747.50, the FTSE 250 rose 0.8% to 21,954.67, and the AIM All-Share gained 1.2% to 758.50.
Optimism returned to trading floors after the US Senate approved a funding deal late Sunday, clearing the way for federal agencies to reopen following a month-long closure. The compromise, backed by a minority of Democrats, followed a tense weekend of negotiations in Washington.
European markets mirrored the upbeat tone, with the CAC 40 in Paris up 1% and Frankfurt’s DAX 40 advancing 1.4%.
Diageo led the FTSE 100, surging 7.3% after naming former Tesco boss Dave Lewis as its next chief executive. Lewis, currently chair of Haleon, will take over on 1 January 2026 from interim CEO Nik Jhangiani, who returns to his role as finance chief. Chair John Manzoni said Lewis brings “proven leadership skills in building and marketing world-leading brands,” as the drinks group seeks to reverse a two-year slide that’s wiped 40% off its share price.
Shares in Haleon, which appointed Vindi Banga as its new chair following Lewis’s departure, slipped 0.5%.
Airline stocks also rallied after last week’s sell-off. International Consolidated Airlines Group jumped 4.3% as brokers Bernstein and Citigroup lifted their price targets, saying the stock remains attractively valued after a steep drop on Friday. The end of the US shutdown further lifted sentiment, with hopes that flight disruptions caused by unpaid air traffic controllers would now ease.
National Grid fell 1.9% after a survey from the Chartered Institute of Personnel & Development warned that more than a quarter of large UK firms expect to cut jobs due to artificial intelligence. The report urged the government to avoid labour market reforms that could “undermine hiring further” ahead of this month’s Autumn Budget.
In the FTSE 250, JTC dropped 4.7% after agreeing to a £2.7 billion cash takeover by private equity group Permira, valuing the fund administrator’s shares at 1,340p – a 49% premium to their August close. The deal ends rival interest from Warburg Pincus.
RHI Magnesita jumped 17% to the top of the mid-cap index after reporting “improved” trading between July and October, with adjusted EBITDA of €136 million and a 13% margin. The refractory group said global steel demand remains “subdued but stable,” with strength in India and the Middle East supporting performance.
Among small caps, Eagle Eye Solutions rose 9.8% after signing a five-year contract with a major North American food retailer operating 450 stores across Texas and Mexico. Its AIR promotions platform will roll out in early 2026.
In Asia, the Nikkei 225 rose 1.4%, the Shanghai Composite gained 0.5%, and Hong Kong’s Hang Seng added 1.6%, while Sydney’s ASX 200 closed up 0.8%. On Wall Street on Friday, the Dow added 0.2%, the S&P 500 edged up 0.1%, and the Nasdaq slipped 0.2%.