STOCKS : Tokyo Prices Fall in Wake of Election

Stock prices fell Monday in thin trading on the Tokyo Stock Exchange amid concerns of a possible increase in the official interest rate by the Bank of Japan.

The blue chip Nikkei index of 225 selected issues, which lost 11.67 points Friday, fell 237.72 points to 37,222.60.

The broader-based Tokyo Stock Exchange index of all listed major shares dropped 27.49 points to 2,718.56.

An estimated 330 million shares changed hands, compared to 520 million shares Friday.

One broker said investors retreated to the sidelines in the afternoon session because of concerns about an expected hike in Japan’s interest rate following the victory of the ruling Liberal Democratic Party in Sunday’s general election.

The sharp drop also reflected bearish movement of the Japanese yen against the dollar on the Tokyo Foreign Exchange market.

Meanwhile, stock prices fell sharply in a lackluster session on London’s Stock Exchange.

Dealers said they witnessed little outright selling and said the decline came as market makers cut prices to try to entice some buying.

With Wall Street shut for the Presidents’ Day holiday, they found few takers for stocks even at the cheaper levels, dealers said.

“There’s a dire lack of interest,” said a director at a large U.S. brokerage firm. “Fund managers are using the day as an excuse to do absolutely nothing.”

At the close, the Financial Times-Stock Exchange 100-stock index was down 28.8 points, or 1.2%, at 2,297.1. Volume amounted to a very light 308.3 million shares, compared to 438.8 million shares Friday.

CURRENCY Dollar Declines in Light Trading The dollar fell against other major currencies in light European trading Monday as the West German mark gained ground.

Gold prices were little changed.

The holiday in the United States reduced volume on European exchanges considerably, dealers said.

Dealers said the dollar fell against the mark on technical factors. They also said continued speculation about an interest rate hike by the West German central bank was generating interest in the mark.

The U.S. currency, however, gained modestly against the yen on some short-covering. Short-covering is the buying of dollars to fulfill earlier agreements to sell them.

The dollar gained because the election victory of the ruling Liberal Democratic Party did not generate more buying in the yen, which had advanced ahead of the election, dealers said.

In London, the British pound rose to $1.7030 from $1.6953 late Friday.

Other late dollar rates in Europe, compared to late Friday’s rates, included: 1.6765 West German marks, down from 1.6794; 1.4885 Swiss francs, down from 1.4930; 5.6955 French francs, down from 5.7045; 1.8870 Dutch guilders, down from 1.8915; 1,243.00 Italian lire, down from 1,246.00, and 1.1993 Canadian dollars, down from 1.1997.

In Tokyo, where the dollar begins its day, the U.S. currency slipped 0.03 yen to a closing 144.52 yen. Later, in London, it was quoted at 144.60 yen.

Gold fell in London to a late bid price of $416.50 an ounce from $416.65 bid late Friday.

NO TRADING

All U.S. markets were closed Monday in observance of the Presidents’ Day holiday.