UK investors get in better mood after progress on US debt ceiling deal

London shares continued to fall yesterday as weak Chinese economic data weighed on commodity stocks. China’s manufacturing PMI remained in contraction territory at 48.8 in May, while 49.5 was expected. Construction and services PMI fell for the second consecutive month.

Adding to the gloomy atmosphere, a rise in US job openings fuelled fears that further Fed rate hikes were on the way. The FTSE 100 fell 1%.

Today, things are looking better. This is because the debt ceiling issue is well on the way to being solved. Yesterday, the US House of Representatives approved a bill suspending the debt ceiling until January 1, 2025. But as we've known all along, the Senate is where things can get tricky. But the guarantees obtained by Joe Biden and Kevin McCarthy seem solid enough for the text to be adopted by Monday.

In other news, Nationwide says UK house prices fell at the fastest annual pace in about 14 years last month. Prices fell by 3.4% in the 12 months to May compared to the year-ago period.

Among stocks, AstraZeneca added 0.8% after the drug maker said a combination of its cancer drug got the green light from US authorities for the treatment of a type of prostate cancer.

Pennon Group slid 2% after reporting a large drop in annual earnings.

 

Things to read today:

Game, set and almost match to Biden on the debt ceiling (Financial Times)

Electric car drivers 'should pay 6p-per-mile road tax' (Daily Telegraph)