Business and City Summary

Italy trims

interest rates The Bank of Italy unexpectedly cut its discount and Lombard interest rates by half a percentage point yesterday to 13.25 and 14.75 per cent respectively, because 'the pressure on our currency has eased'.

The cut follows an agreement last week to abandon the scala mobile system that links most pay increases in Italy to the rate of inflation. This had triggered a rise in Italian government bond prices.

Tunnel vision

Eurotunnel is to rent some of its telecommunications capacity to British Rail Telecommunications and the French railway, SNCF, to generate additional revenue from the Channel tunnel.

BET doubts

BET's pounds 200m rights issue closes today amid fears that shareholders will shun the shares on offer at 110p, just 0.5p below yesterday's closing price.

'Bad' time to buy

A survey by Proshare and Mori shows 52 per cent of small shareholders believe it is a bad time to invest in the stock market, against 43 per cent a month ago.

New at Imro

Paul Myners, chairman of Gartmore Investment Management, is to join the board of the Investment Management Regulatory Organisation.

Greenall sells

Regional pub operator Greenall has sold four outlets in the North-west and North Wales to Paramount for pounds 331,000.

GPA cash

GPA, the Irish aircraft leasing group, is making a second cash infusion into America West Airlines in order to keep the troubled carrier in the air. GPA is one of the contributors of a minimum of dollars 45m worth of debtor in possession (DIP) financing for the airline.

Less spice

Reckitt & Colman has agreed to sell its US spice and seasoning business, which makes French's mustard among other products, to Burns Philp & Co for dollars 75.1m ( pounds 39m).

BT 'wrong'

Mercury Communications refuted BT's claim that it is winning back substantial numbers of business customers from Mercury. Mercury's deputy chief executive, Peter Howell- Davies, said: 'In the last financial year our order book has increased by over pounds 300m.'

Output falls

Industrial production in western Germany fell 2.1 per cent in June from the previous month after 0.1 per cent fall in May.

World Markets

New York: Holding its ground after last week's gains, the Dow Jones average was 1.62 points higher at 3,395.40 at the close.

Tokyo: Wafer-thin trade following the two-day rally sent the Nikkei average 200.83 points lower to 15,709.45.

Hong Kong: Buying of blue chips in expectation of positive company results pushed the Hang Seng up 29.6 to 5,910.73.

Sydney: Prices barely moved, with the All Ordinaries index half a point easier at 1,617.3.

Bombay: Late institutional support restricted the index loss to 4.41, closing at 2,722.65.

Johannesburg: Gold and industrial shares both lost ground. The overall index ended 21 points weaker at 3,409.

Frankfurt: The DAX index slid to a seven-month low of 1,594.71, down 20.71 points, on nervousness ahead of the Bundesbank council meeting.

Paris: The CAC-40 index jumped 29.77 points to 1,784.44 on forecasts of a 'yes' vote to the Maastricht treaty.

London: Report, page 19.

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