Around the world's markets
Tuesday 25 August 1998
Blue chips rallied after Friday's ragged retreat. Footsie ended 76.7 points higher at 5,553.7 helped by American influences which offset worries about the Far East, Russia and Latin America. Hopes of takeover action also offered a little inspiration. Second and third-line shares failed to join the rally.
HSBC reflected the strength of the Hong Kong market where heavy government buying produced a 4.2 per cent advance. The shares gained 83p to 1,374p.
Derek Pain, page 17
BLUE CHIPS ended firmer after Goldman Sachs repeated its bullish view of the US market, saying that stocks were 5 to 8 per cent undervalued and repeating its 9,300 year-end target for the Dow. The index ended up 32.96 at 8,566.61 as investors took their chance to take profits.
Technology issues did not benefit: the tech-laden Nasdaq composite ended down 6.79 at 1,790.82, while the S&P500 was up 6.90 at 1,088.14.
STOCKS tumbled amid concern about delays in government efforts to clean up Japan's bad debt-ridden banking system. The dollar jumped against the yen.
The Nikkei 225 dropped below the psychologically-significant 15,000- point level for the first time in a week, falling 309.84 points, or 2.03 per cent, to close at 14,988.36. Political uncertainty surrounds the government's plans to clean up the banking system while opposition parties have vowed to fight what they call a waste of public money.
THE Hong Kong government intervened in the stock markets for the sixth consecutive session.
Traders said government buying of blue chips and futures contracts sent the market soaring, offsetting bearish factors ranging from the weaker Japanese yen and Russian turmoil to grim domestic economic data expected this week. The Hang Seng Index gained 317.87 points, or 4.2 per cent, to finish at 7,845.48.
MALAYSIA'S Kuala Lumpur Stock Exchange Composite Index lost 2.1 per cent, or 6.86 points, to 317.20, after falling to a 10-year low of 309.63.
Dealers said 300 was a strong psychological support level, and local funds caused the partial rebound in the afternoon, picking up cheap blue- chip issues. The gloom deepened on comments by Deputy Prime Minister Anwar Ibrahim that hopes for a rapid regional economic recovery had faded.
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