LONDON (AP) — Hopes that U.S. politicians will be able to reach a deal on raising the government’s debt limit, avoiding the risk of a disastrous default, supported global markets on Monday, when Wall Street will remain closed for a holiday.
Congress must agree by the end of February to increase the limit on how much the U.S. can borrow so the government can service its debt. If it doesn’t, the country could default, which would deal a heavy blow to global financial markets and undermine confidence in the world’s largest economy.
The Republicans appear ready to raise the debt ceiling temporarily and have also backed away from their insistence on deep spending concessions in exchange for a deal.
“Although this again could be seen as another round of political battle, any progress to avoid immediate dangers will likely be seen as positive by the market,” said Gary Yau, analyst at Credit Agricole CIB, in a report to investors.
Britain’s FTSE 100 was up 0.2 percent to 6,165.52, while Germany’s DAX advanced 0.4 percent to 7,730.73. France’s CAC-40 gained 0.3 percent to 3,750.76.
U.S. stock and bond markets are closed for Martin Luther King, Jr. Day.
Dickie Wong, executive director of research at Kingston Securities in Hong Kong, said he was optimistic that an agreement on the U.S. debt ceiling would be reached because of the high price tag attached to failing to do so.
“Both parties will find some kind of solution because they all know that the debt ceiling will have to be increased,” Wong said. “At the very last minute they will sort it out.”