European markets up on US fiscal cliff deal

<p>European share markets have gained following news of the US fiscal cliff deal.</p>

Markets in Europe have jumped on news US policymakers have come to an agreement that will avoid the so-called fiscal cliff of spending cuts and tax increases.

In early trading today (January 2nd), UK shares had risen by 1.9 per cent, while other indexes had advanced by a similar amount.

The positive data follows concerns the fiscal cliff would have overturned modest recovery in the US, with the possibility of the country falling back into recession.

However, the deal – formed by president Barack Obama and the House of Representatives – saw German stocks advance by two per cent, while France's Cac 40 was also two per cent higher and Madrid's markets rose by 2.6 per cent.

Addressing the media in a White House press conference today, Mr Obama said: "I will sign a law that raises taxes on the wealthiest two per cent  of Americans … while preventing a middle-class tax hike."

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