Around the World's Markets
Wednesday 23 September 1998
BLUE CHIPS staged a comeback. Footsie reclaimed its position above the crucial 5,000 points level with a 113-point gain to 5,103.3. Trading was busy with share turnover nudging one billion. Supporting shares had a quiet session.
Takeover stories swirled with Reed International, the media group, and GRE, the insurer, seen as likely targets. Reed, up 31.25p to 534.25p, was said to be in the sights of a US group and GRE, up 9p at 258p, was regarded as a candidate for Allied Dunbar.
Derek Pain, page 23
WALL STREET stocks ended mixed as blue chips stumbled and technology stocks rose. Investors were looked ahead to testimony by US Federal Reserve chairman Alan Greenspan to Congress today for hints on interest rates.
The Dow closed down 36.05 points at 7,897.20. The tech-heavy Nasdaq composite ended at 1,697.78, up 17.35 points. Advancing issues lead decliners nearly two-to-one on the New York exchange, but volume was light with 691 million shares changing hands in the day.
STOCKS REBOUNDED from a 12-year low on expectations that Prime Minister Keizo Obuchi will be pressured to promise more measures to lift the economy.
Drug makers and railways led the rally, as investors favoured "safe haven" industries. The Nikkei 225 index rose 1.42 per cent to 13,789.81.
Nomura Securities, Japan's largest brokerage, fell on reports that it will have to inject $380m into a US affiliate. Three of Japan's big five chip makers - Toshiba, Hitachi and NEC - have cut their earnings forecasts in the past month.
THE HANG Seng index posted a 2.8 per cent gain to close up 203.3 at 7,373.5, with traders saying most of the gains were prompted by short covering after Monday night's rally on Wall Street caught investors by surprise.
HSBC, HongKong Telecom and Hutchison Whampoa, which together make up almost half the index, led the gains. Meanwhile, Hong Kong's Monetary Authority said it spent $8.9bn of its foreign currency reserves to buy stocks and futures last month, less than many analysts had estimated.
THE XETRA DAX rallied 110.1 points to close at 4,549.23, although traders warned that the gains were largely due to short covering by investors who had expected a worse response to the broadcast of President Clinton's video testimony on Monday. "There are so many things which are still potential dangers," one dealer said. "I think we could still see 4,000 points."
Banks recovered some of the value they shed this month, while car makers BMW and Volkswagen benefited from a firmer dollar.
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