Business and City in Brief

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Steel group fails

Saarstahl, the German steel group majority-owned by France's Usinor Sacilor, is to file for bankruptcy. It has been losing about DM30m a month.

US housing starts up

Construction starts on new US homes and apartments bounced back during April to the strongest pace of the year, the Commerce Department said. The annual rate of starts on new homes increased by 6.7 per cent, the biggest monthly gain in eight months.

Fisons sells Fisons has sold its North American horticulture business to a consortium of buyers led by the Canadian Macluan Capital Corporation for dollars 60m, part of the continuing disposal of non-core businesses by the troubled drug company.

Warburg buys

SG Warburg, the investment bank, is buying the Chicago derivatives trader KC-CO for at least dollars 15m, conditional on the Americans' continued service for at least five years.

Harrods battle

The latest round in the legal battle between Lonrho and the Fayed brothers over their pounds 615m takeover of Harrods and the House of Fraser stores group in 1985 began in the Court of Appeal yesterday. The three Fayed brothers, Mohamed, Ali and Salah, are asking three judges to overturn an order obtained by Lonrho last Wednesday for their cross-examination.

Adviser suspended

Fimbra, the financial advisers' regulator, has suspended Philip D Smith of Wigan, Lancashire, from carrying on investment business. The firm is believed to have handled clients' money without authorisation and to have failed to arrange professional indemnity insurance.

Japan surplus rises Japan's customs-cleared trade surplus widened to an unadjusted dollars 10.25bn in April from dollars 7.11bn a year earlier.

Nationwide debt review Moody's Investors Service said it may lower Nationwide Building Society's Aa3 senior debt and A2 subordinated debt, affecting about dollars 1bn of long-term debt. The review will focus on asset quality problems in its mortgage book.

World Markets

New York: Blue chip stocks closed lower on concern over an upturn in interest rates. The Dow Jones Industrial Average lost 5.54 points to close at 3,444.39.

Tokyo: With most investors sidelined ahead of the main company reporting season, the Nikkei average plunged 336.12 to 20,229.39.

Hong Kong: Foreign buying helped the Hang Seng index to add 25.18 to 7,149.3, another record.

Sydney: Prices fell across the board, hit by declining futures and weak metal prices. The All Ordinaries lost nine points to 1,677.9.

Bombay: After early losses shares recovered in the last 15 minutes of trade to end with the index 9.43 points firmer at 2,309.97.

Zurich: Interest focused on the banking and drug sectors as the SPI advanced 11.72 to 1,385.26.

Paris: Reversing recent weakness, the CAC-40 index rose 10.68 points to 1,846.4 in active trading.

Frankfurt: The DAX edged up 0.6 to 1,628.48 in very thin volume.

Milan: On hopes of a cut in key interest rates the MIB came off lows to close 0.92 per cent up at 1,202.