Shares soar despite Tokyo fall

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The Independent Online
SHARE prices in London and New York rallied sharply yesterday, shrugging off the latest fall in Japanese stocks to rise for the second day running.

The FT-SE 100 index rose almost 50 points to score its largest daily gain since the post-election surge. By early afternoon, the Dow Jones Industrial average had risen 50 points to 3,384.

The rise on Wall Street was helped by a firm tone in the US bond market and a return to profit by Ford, the US car manufacturer. But in Tokyo yesterday, the Nikkei-225 average closed 330.69 points down, at 15,095.95, driven lower by rumours of more bad property debts. Although futures trading indicated that a modest rally could occur when the Tokyo market opens early today, analysts were divided over whether the Nikkei would fall below 15,000.

A further drop is seen as underlining the apparent inability of Japanese financial institutions, which count stocks as part of their capital, to meet next year's targets for capital adequacy ratios.