European stock markets are expected to open higher on Friday, buoyed by optimism that a U.S. debt default will be avoided and strong corporate earnings. Wall Street closed at its highest levels since August 2022, while Japan’s Nikkei 225 surged to its highest level since 1990. Top U.S. congressional Republican Kevin McCarthy indicated confidence that an agreement to lift the U.S. debt ceiling can be achieved in the near future. In Europe, two-thirds of the STOXX 600 companies have reported first-quarter results so far and exceeded estimates. Friday is set to be relatively quiet in terms of corporate results, with a trading update from U.K. engineering company Smiths Group the highlight. However, cash-strapped consumers are likely to rein in their spending and the first quarter’s relatively robust corporate margins may come under pressure. The European Central Bank raised interest rates earlier this month and further hikes look likely.
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