Sawt Falasteen - Dollar jumps, stocks scatter as US debt talks plod on

All eyes remain on Washington, where lawmakers remain deadlocked in negotiations to lift the country's borrowing limit to pay its debts and avert a market-rattling default.

The euro slid to $1.0810, the lowest level since early April, in a broad dollar rally as the greenback benefitted from its status as a safe bet in times of economic turmoil.

"The greenback is finding support as lawmakers in Washington seem unable to reach an agreement over the lifting of the debt ceiling," said ActivTrades analyst Ricardo Evangelista.

"The standoff between Democrats and Republicans is likely to continue and, if unresolved, could have serious consequences for the US and global economy."

US President Joe Biden met Republican House Speaker Kevin McCarthy and other congressional leaders at the White House on Tuesday after saying staff-level talks had produced no shift.

McCarthy told reporters there was still "a lot of work to do" before the country runs out of cash, which the Treasury has warned will happen around June 1.

There was a sliver of light, as he said he ultimately expected a deal.

Biden reiterated Wednesday his confidence a deal will be reached.

"The leaders have all agreed we will not default," Biden said in brief remarks at the White House, shortly before departing for the G7 meeting of world leaders in Japan.

Biden has scrapped subsequent stops planned in Papua New Guinea and Australia, and will instead return to Washington on Sunday as time to reach a deal runs low.

Despite the lack of concrete progress in the talks, equity investors seemed mollified by the statements and Wall Street's main stock indices rose at the open.

Despite the lack of a debt deal, "the spin coming out of that meeting is that it was a positive meeting, that a bipartisan deal can still get done to prevent a default", said Briefing.com analyst Patrick O'Hare.

O'Hare said it was a "guarded trade", however, as any deal would have to then be followed by a vote in Congress.

Traders were also looking at company news.

Big-box retailer Target reported a dip in quarterly earnings, but said it had made progress in cutting excess inventory that has weighed on earnings in a slowing consumer economy.

Regional bank Western Alliance reported a big boost in deposits, reassuring investors worried about stress in the banking system after four banks have crashed due to the sharp rise in interest rates.

European stocks ended mixed, with London and Paris dipping, while Frankfurt edged higher.

- Japan growth boosts Nikkei -

Asia indices enjoyed mixed fortunes but star performer Tokyo jumped after figures showed Japan's economy grew more than expected in January-March thanks to a surge in tourism after pandemic border restrictions were lifted.

The figures helped push the Nikkei 225 to a 20-month high and it has now piled on more than 15 percent since the turn of the year.

Analysts said the strong market performance has been helped by corporate reforms and Bank of Japan's ultra-loose monetary policies.

Oil prices jumped.

"Crude oil prices have rebounded from their lows of the week, with the downside limited by this week’s announcement that the US will be a buyer on any dip between now and August as they look to refill the" Strategic Petroleum Reserve, said CMC Markets analyst Michael Hewson.

- Key figures around 1530 GMT -

New York - Dow: UP 0.4 percent at 33,148.07 points

London - FTSE 100: DOWN 0.4 percent at 7,723.23 (close)

Frankfurt - DAX: UP 0.3 percent at 15,951.30 (close)

Paris - CAC 40: DOWN less than 0.1 percent at 7,399.44 (close)

EURO STOXX 50: UP 0.2 percent at 4,323.23

Tokyo - Nikkei 225: UP 0.8 percent at 30,093.59 (close)

Hong Kong - Hang Seng Index: DOWN 2.1 percent at 19,560.57 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,284.23 (close)

Euro/dollar: DOWN at $1.0827 from $1.0862 on Tuesday

Pound/dollar: DOWN at $1.2479 from $1.2488

Dollar/yen: UP at 137.50 yen from 136.39 yen

Euro/pound: DOWN at 86.78 pence from 86.98 pence

Brent North Sea crude: UP 1.5 percent at $76.02 per barrel

West Texas Intermediate: UP 1.6 percent at $72.01 per barrel

burs-rl/giv

C.Hamad--SF-PST