Investing.com - U.K. stock markets climbed higher Thursday, boosted by increased optimism over the U.S. debt ceiling bill as well as positive Chinese manufacturing activity data as well as falling U.K. business confidence.
FTSE 100 starting benchmark - June 1
At 04:00 ET (08:00 GMT), the benchmark FTSE 100 index traded 0.5% higher, the mid-cap FTSE 250 climbed 0.3%, and the combined FTSE 350 rose 0.5%.
Global sentiment was boosted by the news that the Republican-controlled U.S. House of Representatives comfortably passed a bill to suspend the country’s $31.4 trillion debt ceiling late Wednesday, overcoming opposition led by hardline conservatives.
The deal now heads to the Senate for approval, with leaders of both parties hoping to enact the legislation before the weekend.
This would ensure that the U.S. federal government doesn’t run out of money, avoiding a debt default that would have disastrous economic consequences around the globe.
Private Chinese survey boosts confidence
Also helping the overall mood was the news that a private survey indicated Chinese manufacturing activity grew more than expected in May, offering hope of a recovery in this growth engine in the second largest economy in the world, which also acts as a major export market for many of the U.K.’s largest companies.
The Caixin Manufacturing Purchasing Managers’ index came in at 50.9 in May, more than the forecast 50.3 as well as the prior month’s 49.5, and contrasted with the weak official government data released earlier this week.
U.K. housing prices fall in May
Back in the U.K., data from the Nationwide Building Society (LON:NBS) showed prices fell 0.1% in May after a revised 0.4% gain the month before.
Although this drop was less than the 0.5% fall expected, the housing sector is likely to face more difficulties with mortgage costs set to rise further as the Bank of England continues raising interest rates to tackle highly elevated inflation.
“Headwinds to the housing market look set to strengthen in the near term,” Robert Gardner, chief economist at Nationwide, said in a statement Thursday. “Rates are also projected to remain higher for longer. If maintained, this is likely to exert renewed upward pressure on mortgage rates, which had been trending down.
British Land to leave FTSE 100 index
Property owner British Land (LON:BLND) is set to be kicked out of the benchmark FTSE 100 index, ending a stay that started in 2001 after its shares lost a third of their value over the last year.
Its place in the top flight is set to be taken by engineering company IMI (LON:IMI) when the reshuffle takes place on June 19, FTSE Russell, which maintains indices for the London Stock Exchange, announced late Wednesday.
Outsourcing firm Capita (LON:CPI) and building products provider Tyman (LON:TYMN) are set to join the junior FTSE 250 index, with fast fashion retailer ASOS (LON:ASOS) and Tullow Oil (LON:TLW) relegated.
In earnings news, Auto Trader (LON:AUTOA) stock fell 2% after the online car marketplace warned about slowing business ahead even after posting a 16% jump in sales in the year to the end of March.