European shares rise as investors grow optimistic about US debt

European equities rose on Thursday as concerns over a possible US government default and the health of regional banks added to an overnight rally on Wall Street.

Europe’s region-wide Stoxx 600 was up 0.4 percent, recovering two days of losses, while France’s Cac 40 rose 0.6 and Germany’s Dax 1 percent. London’s FTSE 100 rose 0.5 per cent.

Wall Street’s benchmark S&P 500 rose 1.2 percent in previous sessions, and the Nasdaq Composite closed 1.3 percent higher, after US President Joe Biden said he was working to reach a budget deal with Congress to avoid defaulting on the US debt. were “convinced”.

“The market has mostly priced in a successful date-ceiling deal,” said Mike Zigmont, head of research and trading at Harvest Volatility, noting that “when the deal is announced, the market moves much higher from these levels.” There will be no upheaval. Officer”.

Meanwhile, the KBW regional banking index rose 7.3 per cent on Wednesday as lender Western Alliance reported earlier this week that it had increased its deposits by $2 billion in the second quarter, after investors showed interest in the sector. Gained confidence in health.

The yield on interest rate-sensitive two-year Treasury notes was up 0.01 percentage point to 4.16 percent. The yield on the benchmark 10-year note was flat at 3.58 per cent. Bond yields rise when prices fall.

The dollar index, which tracks the currency against a basket of six peers, rose 0.1 percent.

“The dollar’s strength (. . . . ) signals how the FX market is lagging behind the cautious optimism shown in other asset classes such as equities,” said Francesco Pesole, currency strategist at ING.

International oil benchmark Brent crude fell 0.4 per cent to $76.7 a barrel, while US counterpart West Texas Intermediate fell 0.4 per cent to $72.5 a barrel.

US futures were flat ahead of the New York open as traders awaited US data on early jobless claims and existing home sales, which could show how consumers are coping under the weight of rising prices and higher borrowing costs.

Asian shares were also higher, driven by Wall Street’s momentum. Hong Kong’s Hang Seng index rose 0.6 per cent and Japan’s Topix rose 1.1 per cent.

China’s CSI 300 was the most isolated, falling 0.1 percent, extending its losses from earlier in the week when official data pointed to a slowdown in the country’s post-Covid recovery.