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Around the World's Markets

Friday 16 October 1998 19:02 EDT
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LONDON

THE SURPRISE US interest rate cut had shares in positive territory from the start of trading. But best levels were not held.

At the close of trading Footsie was up 76.8 points at 5,133.1. Earlier it scored a 151 point gain. Supporting shares were also firm.

Shares that were devastated during the bear run led the recovery with fund manager Amvescap, hit by hedge fund rumours, up 39.75p to 394p. Barclays, another casualty of the slide, put on 60p to 1,30p.

TOKYO

THE OVERNIGHT cut in US interest rates had relatively little effect, and the Nikkei 225 share index closed 285.17 points higher at 13,280.54 in subdued trading.

Bank shares firmed ahead of the announcement of new credit facilities, with Tokyo-Mitsubishi Bank up 40 yen at 1,000 yen, Sumitomo up 27 at 1.028 yen and Sanwa closing 35 higher at 817 yen. Long-Term Credit Bank closed down 4 at 4 yen. Blue chips such as Sony and Matsushita Electric, and IT stocks also gained ground.

HONG KONG

THE HANG SENG index leaped sharply in response to the US move to lower interest rates and closed almost 9 per cent higher on the day, up 806.59 at 9,777.01, ahead of moves to cut local base rates.

HSBC rose 13 to HK$175.50, and Dao heng Bank was up 3.30 at HK$17.10. Property stocks also rallied on hopes that property values have bottomed out, while China Telecom rose 0.95 to HK$14.90 and Hong Kong Telecom rose 0.95 to HK$16.50.

FRANKFURT

SHARE PRICES rose by an average of 4 per cent in early trading, but the Dax index closed only 90 higher at 4,489.1 after analysts decided the sudden rate cut in the US could signify an element of panic at the Fed. They also feared it could lead to a fall in the dollar against the mark, making German exports more expensive at a time when the Bundesbank is unlikely to allow a compensating cut in German interest rates. BASF fell 1.28 to Dm60.42 and Schering was down 3.5 to Dm175.40.

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