Chip rally drives Asian shares up, but US debt talks caution stays

Asian stocks rose on a rally in regional chip shares on Monday after China banned some purchases from Micron Technology (MU.O), while Wall Street futures struggled as U.S. debt ceiling negotiations approached crunch time after stalling last week.

Europe is set to extend the caution, with pan-regional Euro Stoxx 50 futures pointing to a flat open. S&P 500 futures were also little changed while Nasdaq futures were up 0.1%.

U.S. President Joe Biden and House Republican Speaker Kevin McCarthy will meet to discuss the debt ceiling on Monday, less than two weeks before the June 1 deadline after which Treasury expects the federal government will struggle to pay its debts.

A failure to lift the debt ceiling would trigger a default, likely sparking chaos in financial markets and a spike in interest rates.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was last up 0.5%. Japan’s Nikkei (.N225) rose 0.8% to fresh 33-year highs, South Korea’s KOSPI (.KS11) gained 0.7% and Hang Kong’s Hang Seng index (.HSI) surged 1.3%.

This report’s information was first seen on REUTERS; to read more, click this link.