LONDON (AFP) – London shares closed higher at the end of trade on Monday after Larry Summers withdrew from the race to lead the US Federal Reserve, raising traders' hopes that a US stimulus wind-down will not be rushed.
The FTSE 100 rose 0.59 percent to 6,622.86 points
"News that Larry Summers has ruled himself out of the race to succeed Ben Bernanke as chairman of the Fed has been interpreted as a positive, with the market seemingly showing a preference for the continuity offered by current vice chair Janet Yellen," said Matt Basi, head of UK sales trading at CMC Markets.
Markets were taken somewhat by surprise after Summers decided to withdraw from the race to become the next Fed chairman.
The two other top contenders for the post -- Yellen and former vice chair Donald Kohn -- were architects of the Fed's bond-buying and supporters of the approach laid out by current chief Ben Bernanke.
Summers was considered more hawkish towards the so-called quantitative easing scheme.
Traders also welcomed news of a deal aimed at averting a US-led military attack on Syria.
Damascus said at the weekend that it would commit to a plan to eradicate its chemical weapons after a deal brokered by Russia and the United States that may avert a threatened attack by US forces.
US Secretary of State John Kerry and his Russian counterpart Sergei Lavrov announced the deal Saturday that provides for Syria's toxic arsenal to be destroyed by mid-2014.
Global markets were sent into a tailspin last month on expectations of a US-led strike against Syria, fanning fears of a wider conflict in the Middle East.
"Given the (Syria) deal's potential to negate the need for significant military intervention it's no surprise the market has reacted positively, with memories of the lengthy operation in Iraqi still fresh in the mind," said Basi.
Back in London, Lloyds Banking Group remained the most traded blue-chip by volume with 127.51 million units switching owners, followed by Vodafone which saw 70.67 million units change hands.
The day's best performer was Antofagasta, which rose 3.94 percent to 883 on strong copper prices. It was followed by Standard Life climbing 3.33 percent to 354.10.
Fresnillo was the biggest loser, falling 12.77 percent to 1045.00 over tax rises in Mexico. Peer Eurasian was next descending 2.05 percent to 215.50 after recent falls in gold prices.
On the currency markets, sterling slipped to $1.5931 at 5:02pm from $1.5876 at the same time last Friday, and also lost 1.1929 euros from 1.1940 over the same period.