London (AFP): Europe’s stock markets struggled Friday with investors nervous as a deadline to avert a calamitous US default draws closer. After an initial rebound, London and Paris stocks ran out of steam as the session progressed, while Frankfurt slipped into the red.
“With the clock ticking on those debt ceiling negotiations and Congress having closed up for a long weekend break, there’s, without doubt, a degree of caution building over what happens next,” noted Scope Markets analyst Joshua Mahony. Asian equities mostly rose, however, on hopes that lawmakers are edging closer to a deal to hike the US debt ceiling.
Markets have taken a hit in recent days on worries about the slow pace of negotiations in Washington, even after President Joe Biden and House Speaker Kevin McCarthy expressed optimism earlier in the week. On Thursday, Biden reiterated his pledge that “there will be no default” despite the wrangling, adding that talks with McCarthy, who leads the Republican negotiators, had been “productive”.
The speaker also expressed his determination to get an agreement to raise the borrowing limit by June 1, when the Treasury has warned the government is expected to run out of cash to service its debts.
“We know where our differences lie,” he said. “We do not have an agreement yet. We knew this would not be easy. It’s hard, but we’re working. And we’re gonna continue to work till we get this done.” Reports said the two camps were edging towards a deal that would lift the debt ceiling and cap spending for two years. Pressure for a deal was ramped up after Fitch placed the country’s AAA-ranked credit on “rating watch negative” owing to the standoff.
There is still plenty of rancor on Capitol Hill, with some Republicans questioning whether the United States is even likely to default at all, despite warnings about the potential economic chaos it would cause.
Democratic minority leader Hakeem Jeffries said Republicans had abandoned their jobs in Washington to go on holiday.
“And these Republicans, they’re going to say that Joe Biden refused to sit down with them,” he added.
- Key figures around 1040 GMT –
London – FTSE 100: FLAT at 7,573.05 points
Paris – CAC 40: FLAT at 7,227.75
Frankfurt – DAX: DOWN 0.2 percent at 15,766.48
EURO STOXX 50: FLAT at 4,271.32
Tokyo – Nikkei 225: UP 0.4 percent at 30,916.31 (close)
Hong Kong – Hang Seng Index: Closed for a holiday
Shanghai – Composite: UP 0.4 percent at 3,212.50 (close)
New York – Dow: DOWN 0.1 percent at 32,764.65 (close)
Euro/dollar: UP at $1.0729 from $1.0725 on Thursday
Pound/dollar: UP at $1.2351 from $1.2321
Dollar/yen: DOWN at 139.79 yen from 140.06 yen
Euro/pound: DOWN at 86.86 pence from 87.04 pence
West Texas Intermediate: UP 0.8 percent at $72.42 per barrel
Brent North Sea crude: UP 0.6 percent at $76.75 per barrel
