(Alliance News) - Stocks in London are set to open higher on Thursday, as talks over the US debt ceiling continue.
IG says futures indicate the FTSE 100 index of large-caps to open up 17.5 points, 0.2%, at 7,644.6 on Thursday. The index slumped 135.85 points, 1.8%, to 7,627.10 on Wednesday.
In the US on Wednesday, Wall Street ended lower, with the Dow Jones Industrial Average ending down 0.8%, the S&P 500 down 0.7%, and the Nasdaq Composite down 0.6%.
US President Joe Biden offered to freeze government spending at current levels during crunch debt talks with Republicans. This would reduce the deficit by USD1 trillion, US Treasury Secretary Janet Yellen said.
The savings proposed by Biden narrow the difference between Republican and Democratic spending plans as the two sides seek an agreement to raise US borrowing limits and avert a potentially catastrophic debt default.
Speaker of the House Kevin McCarthy said he is sending Republican negotiators to the White House to "try to finish out the negotiations" on the debt ceiling but warned there were a "number of places" where the two sides were "still far apart".
McCarthy spoke to reporters on Capitol Hill with just over one week to go until the crucial June 1 deadline.
Minutes from the most recent Federal Open Market Committee meeting showed Fed officials were "less certain" further increases to interest rates were required as economic risks had increased.
The FOMC voted unanimously to lift interest rates by 25 basis points in May, its 10th consecutive rate rise in just over a year, but the minutes to that meeting suggest there was a split over the future path of monetary policy.
"The bigger question...is whether these minutes are an accurate reflection of how [FOMC members] feel now, given the strength of recent data," commented Michael Hewson, chief market analyst at CMC Markets UK.
"The raising of the debt ceiling is always likely to be a key consideration but given recent commentary from some Fed policymakers there is a cohort who are leaning towards a June hike already."
Sterling was quoted at USD1.2342 early Thursday, lower than USD1.2367 at the London equities close on Wednesday.
The euro traded at USD1.0736 early Thursday, lower than USD1.0762 late Wednesday. Against the yen, the dollar was quoted at JPY139.65, up versus JPY139.12.
In Asia on Thursday, the Nikkei 225 index in Tokyo was up 0.3%. In China, the Shanghai Composite was down 0.8%, while the Hang Seng index in Hong Kong was down 2.4%. The S&P/ASX 200 in Sydney closed down 1.1%.
Gold was quoted at USD1,956.34 an ounce early Thursday, lower than USD1,969.75 on Wednesday. Brent oil was trading at USD78.00 a barrel early Thursday, lower than USD78.07 late Wednesday.
Thursday's economic calendar has a gross domestic product reading from Germany at 0700 BST and the US at 1330 BST.
The London corporate calendar has a trading statement from mixers maker Fevertree Drinks and annual results from speciality chemicals Johnson Matthey and pub company Young & Co's Brewery.
By Sophie Rose, Alliance News reporter
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