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Share prices soar in Far Eastern markets

Peter Torday
Tuesday 28 December 1993 19:02 EST
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LONDON shares are set to open on an optimistic note today after share prices soared in the Far East.

Hong Kong stocks yesterday bounced 4.8 per cent higher - the largest daily gain on record - after a flood of foreign buying drove up the Hang Seng index by 530.38 points to finish at a new peak of 11,570.22. Hopes are high that the index will soon break through 12,000 after a buying spree was prompted by new records on the Singapore, Malaysia and Philippines markets.

Analysts said overseas funds were anxious to buy before the New Year holiday in the expectation of another rally in January. Buying was also triggered by higher futures prices.

The Bank of China forecast yesterday that the Hong Kong economy would expand by 5.5 per cent next year - a slightly quicker growth rate than 1993 - boosted by deepening free-market reforms in China, including increased foreign investment opportunities.

Tokyo stocks rallied late in the day after sentiment was lifted by speculation that the government was considering a large reduction in income taxes. There was also optimism that the Bank of Japan would support banks with problem loans. By the close the Nikkei was 311.33 points higher at 17,131.21.

But recent confidence in Frankfurt and Paris over lower rates and an improving economy yesterday gave way to a more sober assessment of the outlook. The DAX index of 30 leading German shares closed at 2,242.82, down 0.50 per cent from the previous close. In Paris, the CAC-40 index ended 11.91 points lower at 2,264.64.

Both markets had set new records on Monday following the London market close on Christmas Eve, when the FT-SE 100 index easily broke through the 3,400 barrier to finish at 3,412.3.

Analysts said that confidence over lower interest rates and economic recovery was rising on the Continent.

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