Around the World's Markets

LONDON

WORRIES THAT interest rates will be forced higher unsettled the stock market, and Footsie lost an early gain to end 64 points down at 5,748.1. Second and third-line shares were also in the doldrums.

Superstores were boosted by evidence of strong food sales in the weekly John Lewis Partnership survey, while drug stocks strengthened on the deal between Sweden's Astra and Merck of the US. BT was at one time up 25.5p in response to the rumoured link with America's AT&T; the shares ended 5.5p higher at 700p, a closing peak.

NEW YORK

BLUE CHIPS turned mildly negative in choppy early trading, weighed down by weakness in Walt Disney Co shares after Goldman Sachs cut its 1998 earnings estimates for the media and entertainment giant. Technology issues were modestly firmer. Traders said the market was volatile due to the quarterly expiry of futures and options - the so-called "triple witch" - rather than events. "Triple witch is dominating most of the action," said Peter Coolidge, senior equity trader at Brean Murray & Co.

TOKYO

REPORTS OF a possible merger between two ailing banks, Long-Term Credit Bank of Japan and Nippon Credit Bank, panicked the markets, but were denied by the banks and finance ministry. The Nikkei 225 index fell 93.56 points, or 0.61 per cent, to 15,267.98, after rising 4.39 per cent on Thursday.

Damon Carter, a director at DE Shaw Securities Japan, said: "The market rallied because the government promised to let poorer institutions fail. If they let the banks merge, it's a contradiction in policy.''

US support for yen, page 21

SOUTH AFRICA

SOUTH AFRICAN markets were sent reeling yesterday after an emergency rise in interest rates battered market confidence but failed to aid the rand. The Johannesburg All Share index ended off 123.4 points, or 1.75 per cent, at 6,919.9. Yesterday's fall followed a two-day rally that lifted the benchmark index from a four-month low. The rand weakened to a record low of 5.53 to the US dollar from 5.4025 late on Thursday, amid fears of further fallout from Asia's economic crisis.

GERMANY

SHARES WERE sharply lower in late trading, with sentiment depressed by early losses on Wall Street and the weaker dollar. Traders said the market had been supported earlier in the day by the expiries of the DAX future and stock options.

The DAX closed yesterday down 15.45 at 5,702.61. VW was the weakest share after strong gains earlier in the week: VW closed down DM37.95 at DM1,659.05 (pounds 553), while Daimler-Benz fell DM0.8 to DM165.5 and BMW was down DM4.5 at DM1,750.5.