Sharp fall in stock markets around the world due to concerns about the United States debt

Chart of the German DAX index on the stock exchange in Frankfurt, Germany, May 23, 2023. (REUTERS) (STAFF/)

The world stock exchanges and the futures of Wall Street they fell sharply on Wednesday as the US government neared a possible debt default.

half day, London and Paris registered a decrease of 1.8%. Shanghai, Tokyo and Hong Kong also fell.

Yesterday, the Wall Street benchmark, the S&P 500fell 1.1% on Tuesday after the speaker of the House of Representatives, kevin mccarthy, said: “We have not reached an agreement yet.” This came after a meeting on Monday with the President Joe Biden which ended without agreement.

“McCarthy’s comments have thrown cold water” on the deal, he said. vishnu varathan of Mizuho Bank in a report. He said falling prices are “paying for premature optimism around a debt deal.”

He FTSE 100 of London it sinks 1.8%. He ACC 40 of Paris fell 1.85% and the DAX from Frankfurt falls 1.7%.

In Wall Streetthe futures of S&P 500 and of the Dow Jones they lost 0.3%.

On Tuesday, the Dow was down 0.7% and the Nasdaq Composite lost 1.3%.

In Asiathe composite index of shanghai lost 1.3% and the nikkei 225 Tokyo fell 0.9%. He hang seng Hong Kong lost 1.6% to 19,115.93 points.

He kospi Seoul ended unchanged at 2,567.45 points, and Sydney’s S&P-ASX 200 lost 0.6% to 7,213.80 points.

A man walks past an electric monitor showing the Nikkei stock average and the exchange rate of the Japanese yen against the US dollar (REUTERS/Issei Kato/File Photo)
A man walks past an electric monitor that shows the Nikkei share average and the Japanese yen exchange rate against the US dollar (REUTERS / Issei Kato / File photo) (ISSEI KATO /)

He Sensex Indian fell 0.2% to 61,844.60 points. New Zealand and Bangkok were up, while Singapore and Jakarta were down.

Negotiation against the clock

Washington Republicans are pushing for aid to the poor is cut and other expenses in exchange for the government agreeing to increase the amount you can borrow. Biden has proposed a combination of cuts and tax increases to the richest Americans, which McCarthy has rejected.

Without an agreement, the Treasury Secretary Janet Yellen says the government will run out of cash to pay bills around June 1. This could shock the global financial system.

Market prices for Treasury debt that must be repaid around the date of a possible default have fallen due to uncertainty about payment.

Biden with McCarthy (REUTERS / Leah Millis)
Biden with McCarthy (REUTERS/Leah Millis) (LEAH MILLIS/)

The performance of the 10 year treasury debtor the difference between the market price and the payment at maturity, dropped to 3.70% from 3.72% on Monday.

The two-year Treasury yield rose to 4.34% from 4.32%.

Investors were already worried about the slowdown in global economic growth after the increases in interest rates in the United States, Europe and Asia to curb rising inflation. Three high-profile bank failures in the United States and one in Switzerland have also kept them on their toes.

He Manufacturing sector and other sectors of the US economy are feeling the brunt of the rate hike.

In the energy marketshe US crude benchmark rose 97 cents to $73.88 per barrel, in the electronic operations of the New York Mercantile Exchange. The contract rose 86 cents on Tuesday to $72.91. He Brent crudethe basis of international oil prices, rose 88 cents to $77.72 per barrel in London. In the previous session he added 85 cents to $76.84.

The dollar rose to 138.63 yen, from 138.48 yen on Tuesday. The euro rose to $1.0786 from $1.0776 on Tuesday.

(With information from AP)

Keep reading:

Negotiations between Republicans and Democrats advance against time to avoid default in the United States

Ron DeSantis will announce his presidential candidacy in a live Twitter conversation with Elon Musk