Ftse on the rise in the wake of us reforms

UK shares rose on Wednesday as a speech by US president Barack Obama and an upbeat report on the US housing market lifted Wall Street and investors awaited an interest rate decision from the Federal Reserve.

The FTSE 100 index of blue-chip shares gained 52 points to 5,969 – after briefly testing the 6,000 mark – and the Mid-250 index advanced 111 points to 11,612.

Official data showed earlier that new sales of single-family US homes in December jumped to their highest level in eight months. Nonetheless, Teunis Brosens, economist at banking group ING, said the ‘underlying picture’ for the troubled US housing market remains unchanged. ‘The housing market is still burdened with substantial excess supply, the legacy of the past building spree. It may take several years to clear this excess,’ Brosens said.

The data came a day after Obama asked US lawmakers to work with him to cut the corporate tax rate and simplify the tax code.