UK stocks : FTSE 100 index closes flat
The UK market reopened after the Christmas holiday hoping for progress in the U.S. budget negotiations now President Obama has returned from vacation early to try and get a deal done.
Major tax hikes and spending cuts known as the "fiscal cliff" will come into force in the United States on Jan. 1 unless the White House and Democrat-controlled Senate and the Republican-run House of Representatives reach a budget deal to avoid an abrupt economic slowdown.
However, the FTSE 100 lost 0.3 percent in the 15 minutes after Senate Majority leader Harry Reid said that it looked as if the U.S. was set to head over the fiscal cliff.
"Pretty much everyone we speak to now are pretty much unanimous that we're going to go over the cliff. We may not go over it for very long, but we're going to go over it," Will Hedden, trader at IG Index, said.
The FTSE 100 closed slightly up at 5,954.30, a gain of 0.12 points. Volumes were just 47.2 percent of the 90-day average.
The market had been up as high as 0.7 percent in midday trade, testing but failing to break through resistance around the 6,000 level.
"At 5,997 it had a go, and got really close, but there were always going to be people with sell orders waiting at around 6,000,
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