Asian shares edged higher after the U.S. House of Representatives voted to raise the debt ceiling and futures markets suggested gains in European shares on Thursday, with the bill expected to go to the Senate for passage.
Hong Kong’s benchmark Hang Seng stock index and Japan’s Topix rose 0.8 percent each, while the CSI 300 gained 0.7 percent.
Stocks in the Asia-Pacific region rose after the House of Representatives voted 314 to 117 to pass a bill raising the US debt ceiling on Wednesday. The vote was seen as the biggest hurdle for the legislation, which still needs to pass the Senate before it can be signed into law by a June 5 deadline.
Futures markets tipped the Euro Stoxx 50 to open 0.7% higher, while the FTSE 100 was expected to gain 0.3%. The S&P 500 is set to open flat later in the day.
“We still need to get it through the Senate, but I’m more inclined to think it’s a rubber stamp,” said Stephen Innes, managing partner at SPI Asset Management.
“The market here is positioned very well for that to happen. If investors doubt any indication that this isn’t going to happen, the share price will drop a few percent.”
Asian shares were also lifted by an unexpected rebound in a key gauge of Chinese factory activity.
The Caixin/S&P Global Manufacturing Purchasing Managers’ Index rose to 50.9 in May, while the official manufacturing PMI, released earlier this week, fell to 48.8. A reading above 50 indicates expansion compared to the previous month, while a reading below 50 indicates contraction.
The Caixin index tracks small and mid-sized manufacturers, while the official PMI tracks the activity of large state-owned enterprises.
“A pick-up in both averages is in line with the easing of downward pressure on factory activity last month,” said Julian Evans-Pritchard, chief China economist at Capital Economics.
Manufacturing growth and recent gains in China’s services sector suggest second-quarter growth “may not be as bad as many feared,” he said.
On the currency front, China’s yuan rose 0.2% to 7.096 per dollar after the PMI data.