Stocks called up as US averts debt default

(Alliance News) - Stocks in London were set to open higher on Friday, after the Senate passed legislation allowing the US to avoid an unprecedented debt default, prompting strong market gains in Asia.

IG says futures indicate the FTSE 100 index of large-caps to open up 13.7 points, 0.2%, at 7,503.97 on Friday. The FTSE 100 index closed up 44.13 points, or 0.6% at 7,490.27 on Thursday.

In Tokyo on Friday, the Nikkei 225 index was up 1.1%. The Shanghai Composite was up 0.8%, while the Hang Seng index in Hong Kong was up 3.7%. The S&P/ASX 200 in Sydney closed up 0.5%.

US senators voted to suspend the federal debt limit Thursday, capping weeks of fraught negotiations to eliminate the threat of a disastrous credit default just four days ahead of the deadline set by the Treasury.

Economists had warned the US government could run out of money to pay its bills by Monday. This left almost no room for delays in enacting the Fiscal Responsibility Act, which extends the government's borrowing authority through 2024 while trimming federal spending.

Hammered out between Democratic President Joe Biden and the Republicans, the measure passed the Senate with a comfortable majority of 63 votes to 36 a day after it had sailed through the House of Representatives.

"No one gets everything they want in a negotiation, but make no mistake: this bipartisan agreement is a big win for our economy and the American people," Biden said in a statement posted to social media.

Ahead of the Senate vote, stocks in New York closed higher on Thursday, with the Dow Jones Industrial Average up 0.5%, the S&P 500 up 1.0%, and the Nasdaq Composite up 1.3%.

The dollar was mostly lower early Friday in Europe.

The pound was quoted at USD1.2536, higher than USD1.2523 at the London equities close on Thursday. The euro traded at USD1.0770 early Friday, higher than USD1.0737 late Thursday.

However, against the yen, the dollar was quoted at JPY138.92, up versus JPY138.88.

Gold was quoted at USD1,980.12 an ounce early Friday, higher than USD1,978.50 on Thursday. Brent oil was trading at USD74.77 a barrel , higher than USD74.35.

In Friday's UK corporate calendar, there are full-year results from Nostrum Oil and Gas.

The global economic calendar has the key US nonfarm payrolls report for May at 1330 BST.

By Sophie Rose, Alliance News reporter

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