Stocks called flat amid crunch US debt talks

(Alliance News) - Stocks in London are set to make little progress on Tuesday, as investors keep a close eye on US debt ceiling talks.

IG says futures indicate the FTSE 100 index of large-caps to open down 1.69 points at 7,769.30 on Tuesday. On Monday, the FTSE 100 index closed up 14.12 points, 0.2%, at 7,770.99.

In the US on Monday, Wall Street ended mixed, with the Dow Jones Industrial Average ending down 0.4%, the S&P 500 flat and the Nasdaq Composite up 0.5%.

A top US Republican on Monday said his first one-on-one talks in months with President Joe Biden to avert a calamitous debt default were "productive" but that there was still no deal.

The White House meeting came after Biden returned from a trip to Asia early to hammer out a deal ahead of the US Treasury's June 1 cut off date for Congress to authorize more borrowing.

"I felt we had a productive discussion. We don't have an agreement yet, but I did feel the discussion was productive in areas (where) we have differences of opinion," House Speaker Kevin McCarthy said after the talks.

In Asia on Tuesday, the Nikkei 225 index was down 0.6%. In China, the Shanghai Composite was down 1.0%, while the Hang Seng index in Hong Kong was down 0.7%. The S&P/ASX 200 in Sydney was up 0.1%.

Japan's private sector saw its strongest month of growth since October 2013 in May, according to preliminary survey data.

The au Jibun Bank flash composite purchasing managers' index rose to 54.9 points in May from 52.9 in April. Rising further above the 50-point mark that separates expansion from contraction, it shows growth has strengthened.

The flash services PMI rose to 56.3 from 55.4, while the flash manufacturing PMI rose to 50.8 from 49.5 - showing manufacturing is no longer in contraction.

Sterling was quoted at USD1.2422 early Tuesday, slightly lower than USD1.2424 at the London equities close on Monday.

The euro traded at USD1.0801 early Tuesday, flat from USD1.0802 late Monday. Against the yen, the dollar was quoted at JPY138.58, up versus JPY138.52.

Gold was quoted at USD1,960.51 an ounce early Tuesday, lower than USD1,972.21 on Monday.

Brent oil was trading at USD76.01 a barrel, higher than USD75.94.

Tuesday's UK corporate diary has annual results from industrial and electronics products distributor RS Group, and half-year numbers from Upper Crust owner SSP Group and tile seller Topps Tiles.

Meanwhile, the economic calendar has a slew of flash purchasing managers' index readings, including the eurozone at 0900 BST, the UK at 0930 BST and the US at 1445 BST.

Eyes this week will be on a UK inflation reading due on Wednesday. The data will put the Bank of England under the spotlight, with its "credibility" at stake if the annual inflation rate does not slow as expected. According to FXStreet cited consensus, the yearly inflation rate is expected to have ebbed to 8.2% in April, from 10.1% in March.

By Sophie Rose, Alliance News reporter

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