Relief in stock markets after deal to raise US debt ceiling | Money

Democratic President Joe Biden and Republican House Speaker Kevin McCarthy have reached a tentative deal to raise the debt ceiling. The US Congress is likely to vote on the debt deal on Wednesday. Without a rise in the debt ceiling, the US will soon run out of money and unable to meet its debt obligations.

Tokyo’s Nikkei rose 1 percent to its highest level since July 1990. SoftBank was one of the strongest risers with a gain of more than 6 percent. Large Japanese technology investors benefited from strong price gains in the US chip and technology sector on continued optimism about the applications of artificial intelligence (AI). As a result, the tech benchmark Nasdaq closed up more than 2 percent on Friday. Another strong riser on the Tokyo Stock Exchange was chip tester Advantest, which rose more than 2 percent.

Geopolitical tensions surrounding North Korea had little impact on stock market trading. Japan’s defense minister has ordered his military to destroy any North Korean missile that enters or approaches Japanese territory. He was responding to Pyongyang’s announcement that North Korea would launch a “satellite” in the next two weeks. Japanese Prime Minister Fumio Kishida said any missile launch by North Korea would violate UN Security Council resolutions.

Chinese stock markets showed a mixed picture. Shanghai’s benchmark index meanwhile rose 0.2 percent and Hong Kong’s Hang Seng index fell 0.6 percent as earlier gains evaporated. Chinese Internet and games company Tencent lost 1.4 percent.

All Ordinaries in Sydney rose 1 per cent. Investors in South Korea are given a holiday.

European stock markets were already up an average of 1.6 percent on Friday. A deal on the US debt ceiling is clearly in the pipeline. Today, therefore, there probably won’t be that much progress. Futures on the Euro Stoxx 50 — a stock index based on the 50 companies with the most market capitalization in the eurozone — are already 0.1 percent in the green.

The Dutch AEX index (25 major stocks) was up 0.1 percent at 768.27 points in morning trade. Midcap rose 0.1 percent to 928.73 points. Stock markets in Frankfurt and Paris rose up to 0.5 percent.

The Istanbul stock market rose 2.9 percent. The rise in prices followed the re-election of Recep Tayyip Erdogan, who won the second round of Sunday’s presidential election. The Turkish lira fell to new lows against the US dollar on fears that Erdogan will pursue an unconventional policy of keeping interest rates low in the country despite high inflation.

It was not clear until Tuesday how US stock markets would react to the US debt deal. On Monday, stock markets on Wall Street will be closed for ‘Memorial Day’. Stock markets in London are also closed for the holiday.