Around the World's Markets
Saturday 16 January 1999
THE BRAZILIAN currency float helped blue chips stage a strong recovery. Footsie, down 83.4 points at one time, ended 120.8 up at 5,941 in heavy trading as share turnover again topped 1.1 billion. But supporting shares remained in negative territory.
Following its upbeat trading statement, Great Universal Stores attracted analytical support, gaining 77p to 684p. Telewest Communications was also helped by forecasts, improving 22.5p 240.5p. Tesco rose 8.75p to 195.5p.
Derek Pain, page 20
THE Hang Seng index closed 35.73 points lower at 10,147.40 as interest rates rose slightly in response to Wall Street's heavy fall on Thursday.
With Tokyo closed for a holiday in Japan and New York set to be shut on Monday for Martin Luther King day, traders said sentiment was cautious. A 5 per cent rise in the China-affiliated "red-chip index" was attributed to bottom fishing after losses earlier this week. But a 2.5 per cent fall in banking giant HSBC, one of the few Hong Kong stocks with Brazil exposure, was responsible for 65 points of the fall.
SHARES IN Frankfurt, like other major European bourses, ended higher yesterday, spurred on by gains in the US and Brazilian markets.
The electronic DAX Xetra closed up 1.45 per cent at 4,973.78, while the floor DAX ended 0.97 per cent higher at 4,960.22. Banks, which bore the brunt of Brazil-related losses earlier in the week, generally ended higher. Deutsche Bank closed up 3.35 per cent, while shares in rival Commerzbank gained 1.7 per cent.
SHARES STAGED a spectacular recovery following confirmation that the Brazilian Central Bank would let its currency float freely. By the early afternoon, the Bovespa index was more than 25 per cent higher at 6,364.11.
Analysts said a freely floating real would remove the need for higher interest rates and could help avert a protracted recession.
The Brazilian real stabilised at 1.50 to the dollar, having plunged more than 10 per cent after the central bank said it would not intervene in the currency markets.
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