Stock Markets
Asian stocks surge as debt bill clears Congress, Chinese shares rebound
Most Asian stock markets rose on Friday amid optimism over the approval of a deal to raise the U.S. debt ceiling and avert a default, with Chinese markets rebounding from six-month lows on renewed hopes of an economic recovery in the country.
The U.S. Senate voted in favor of a bipartisan bill to raise the debt ceiling late-Thursday, just days before a June 5 deadline for a default. The bill is now set to be signed into law by President Joe Biden, and marks the lifting of a key source of anxiety for financial markets over the past month.
Optimism over the bill triggered gains across most asset classes on Friday.
Hong Kong’s Hang Seng index was the best performer for the day, rallying 3.5% and out of bear market territory on strength in heavyweight technology stocks. Stocks including Tencent Holdings Ltd (HK:0700) and Alibaba Group Holding Ltd (HK:9988) (NYSE:BABA) surged between 4% and 6% as reports said Nvidia Corporation (NASDAQ:NVDA) head Jensen Huang was planning to meet top executives from major Chinese technology firms.
The Hang Seng was set for its best day in three months, also supported by locally-listed Chinese stocks.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose 1.3% and 0.8%, respectively, rebounding from six-month lows as a private survey released on Thursday showed some resilience in local manufacturing activity.
The reading spurred some optimism over an economic recovery in the country this year, and saw traders pile into heavily-discounted Chinese markets.
Japan’s Nikkei 225 index raced back towards 33-year highs with a 1% bounce on Friday, while the broader TOPIX added 1%. Bank of Japan Governor Kazuo Ueda said the bank planned to maintain its ultra-loose policy for the time being, heralding accommodative conditions for local stocks.
Tech investor SoftBank Group Corp. (TYO:9984) jumped 5.4% and was the best performer on the Nikkei, buoyed chiefly by a frenzy for chipmaking and artificial intelligence stocks, as the firm prepares to spin off its chip designing unit Arm.
South Korea’s KOSPI added 1% as data showed the country’s economy grew slightly more than expected in the first quarter, while inflation remained steady in May.
Optimism over China helped Australia’s ASX 200 index add 0.4%, although financial stocks were held back by data showing an unexpected decline in home loans through May, as local interest rates rose.
But despite Friday’s gains, most Asian markets were still trading in a flat-to-low range for the week, amid caution ahead of key U.S. nonfarm payrolls data later in the day.
The reading is largely expected to factor into the Federal Reserve’s stance on future rate hikes.
Constellation Energy (NASDAQ:) Corp. is on the verge of acquiring Calpine Corp., a move that could mark one of the most significant transactions in the power generation industry, Bloomberg reported on Wednesday.
Baltimore-based Constellation is negotiating with Calpine’s private equity owners to finalize the terms of a deal that could place the value of Calpine at approximately $30 billion, including the assumption of debt, the report said, citing people familiar with the matter.
The potential acquisition, which could be announced within the next few weeks, is still subject to ongoing deliberations, report added.
Constellation’s interest in Calpine underscores the strategic moves within the power sector as companies seek to consolidate and expand their market presence.
While the exact terms of the deal are still being discussed, the acquisition’s completion would likely have considerable implications for both Constellation and the wider power generation sector.
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By John Irish and Alexander Ratz
PARIS/BERLIN (Reuters) -European Union sanctions in Syria that obstruct the delivery of humanitarian aid and hinder the country’s recovery could be lifted swiftly, France’s foreign minister said Wednesday.
The United States on Monday issued a sanctions exemption for transactions with governing institutions in Syria for six months after the end of Bashar al-Assad’s rule to try to ease the flow of humanitarian assistance.
Speaking to France Inter radio, Foreign Minister Jean-Noel Barrot said the EU could take a similar decision soon without giving precise timing, while adding that lifting more political sanctions would depend on how Syria’s new leadership handled the transition.
“There are other (sanctions), which today hinder access to humanitarian aid, which hinder the recovery of the country. These could be lifted quickly,” said Barrot, who met Syria’s de facto leader Ahmed al-Sharaa on Friday with Germany’s foreign minister.
“Finally, there are other sanctions, which we are discussing with our European partners, which could be lifted, but obviously depending on the pace at which our expectations for Syria regarding women and security are taken into account.”
Three European diplomats speaking on condition of anonymity said the EU would seek to agree to lift some sanctions by the time the bloc’s 27 foreign ministers meet in Brussels on Jan. 27.
Two of the diplomats said one aim was to facilitate financial transactions to allow funds to return to the country, ease air transport and lessen sanctions targeting the energy sector to improve power supplies. A third said Germany had put forward a position paper on the potential sanctions to be lifted.
“Due to the new situation, existing sanctions are under scrutiny. Germany has already pitched ideas on this issue,” German foreign ministry spokesperson Christian Wagner said on Wednesday.
“The focus lies on economic questions and return of funds of the Syrian diaspora,” he said.
Syria suffers from severe power shortages, with state-supplied electricity available two or three hours per day in most areas. The caretaker government says it aims to provide electricity for up to eight hours per day within two months.
The U.S. waivers allow some energy transactions and personal remittances to Syria until July 7, but do not remove any sanctions.
WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen said on Wednesday that Nippon Steel’s blocked acquisition of U.S. Steel received a “thorough analysis” by an interagency national security review body that was sent to President Joe Biden.
Yellen, in a live interview on CNBC, said she could not discuss specifics of the review of the merger blocked by Biden last week that is now the subject of a lawsuit that alleges that the review by the Committee on Foreign Investment in the United States (CFIUS) was not conducted in good faith and was prejudiced by Biden.
“I think, as you know, there is ongoing litigation over this case, and as head of CFIUS, I regret there is very little substantive that I can say to you about this,” Yellen said. “Other than that, CFIUS did analyze the specifics, as it always does of this situation, and prepared a thorough analysis to go to the president.”
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