London-listed shares achieved moderate gains on Tuesday, amid hopes that the United States' Democrats and Republicans are edging closer to sealing a deal to prevent the much-debated 'fiscal cliff' of austerity measures at the end of 2012.
The FTSE 100 index closed up 24 points or 0.4% to 5,936, while the FTSE 250 index added 75 points or 0.6% to settle at 12,293.
Reports emerged Tuesday afternoon that House Republicans are preparing a bill that involves increasing taxes on incomes of $1 million and higher, as well as other tax issues. They could propose the bill later this week, news that buoyed the markets amid the hope that a deal is forthcoming.
Closer to home, UK shares were in a largely positive mood, with almost two-thirds of the FTSE 100 constituents making headway in Tuesday trading.
The top performers list featured several natural resource stocks, which together helped the blue-chip index edge closer to the psychologically-significant 6,000-point mark. The FTSE 100 index has not managed to surpass this level since April 2011.
Rio Tinto (RIO), Vedanta Resources (VED) and Anglo American (AAL) each rallied in excess of 2.0%, with RIO putting in the best performance, up 2.8% on the day.
Miners aside, financial services stocks were also in demand as investor appetite for 'riskier' assets continued to direct trade. Resolution (RSL) took on 2.0%, while Aviva (AV.) and Barclays (BARC) rose 1.7% apiece.
Among the casualties, Vodafone (VOD) was the worst off, sliding 1.2%. The mobile phone giant today announced it has bought 9 million shares to hold in treasury at a little over 157p each. Meanwhile, according to data released Tuesday by the Cellular Operators Association of India, Vodafone India lost 2.38 million users in November. Competitor Bharti Airtel lost 2.8 million, according to the report.