Stocks edged higher in Asia and futures markets tipped European shares to rally on Thursday after the US House of Representatives voted to raise the debt ceiling, sending the bill to the Senate where it is expected to be passed.
Hong Kong’s benchmark Hang Seng stock index and Japan’s Topix both rose 0.8 per cent, and the CSI 300 index of Shanghai- and Shenzhen-listed stocks advanced 0.7 per cent.
The gains in Asia-Pacific trading came after the House voted 314-117 on Wednesday in favour of a bill to raise the US debt ceiling. The vote was seen as the biggest hurdle for the legislation, which still has to pass the Senate before it can be signed into law ahead of a June 5 deadline.
Futures markets tip the Euro Stoxx 50 to climb 0.7 per cent at the open, while the FTSE 100 is expected to rise 0.3 per cent. The S&P 500 is set to open flat later in the day.
“We still have to get through the Senate, but I’m more inclined to think that’s a rubber stamp at this point,” said Stephen Innes, managing partner at SPI Asset Management.
“The market here is positioned very much in favour of this going through. Stocks would be percentage points lower if investors suspected there was any hint that this wouldn’t happen.”
Stocks in Asia were also bolstered by an unexpected rebound in a key gauge of Chinese factory activity.
The Caixin/S&P Global manufacturing purchasing managers’ index rose to 50.9 in May, in contrast to the official manufacturing PMI released earlier this week, which declined to 48.8. A reading above 50 indicates expansion compared with the previous month, while one below 50 means a contraction.
The Caixin gauge tracks small and midsized manufacturers, while the official PMI follows activity at larger, state-run companies.
“The average of the two picked up and is consistent with easing downward pressure in factory activity last month,” said Julian Evans-Pritchard, head China economist at Capital Economics.
He said the manufacturing uptick and recent gains for China’s services sector suggested second-quarter growth “may not be as bad as many fear”.
In currencies, China’s renminbi was up 0.2 per cent against the dollar following the PMI reading, at Rmb7.096.
Credit: Source link
