British Shares Reach 3rd Record Close in Week : Trading: Buying spree is prompted by hope of lower interest rates. Paris Bourse also sets record.
British shares hit their third record close in a week Friday as a buying spree prompted by hopes of lower interest rates and higher corporate earnings continued.
The Paris Bourse, trading long after other European markets had taken a break for the Christmas holiday, ended at its second successive record close after a recovery from an early fall. The Hong Kong and Mexico City markets also hit record highs, but Japanese stocks closed lower.
London markets closed early ahead of the Christmas holiday. Many other exchanges in Europe had limited trading while all stock, bond and commodity markets in the United States were closed Friday. The New York stock exchange ended trading Thursday with the Dow Jones industrial average at 3,757.72, off 4.47.
U.S. markets and some European centers will resume trading on Monday, but London is closed until Wednesday.
Here are highlights from various world markets:
* In London, business was slow ahead of the Christmas holiday but London share traders said the market tone remained firm and they expected the rally to continue next week and into the new year.
“I think we’ll keep on going up next week. People might try and mark prices down, but no one’ll have that,” one London trader said.
The Financial Times 100-share index rose decisively through the 3,400 mark, ending 15.8 points higher at a record close of 3,412.3.
Stocks have been boosted in the past week by an influx of investment funds from Britain and overseas, attracted by better prospects for the U.K. market compared with the United States and elsewhere in Europe.
“The U.K. is going to be the market for the first quarter (of 1994),” said Nick Knight, equity strategist at Nomura Research Institute Europe Ltd. “If you’re not in it you’re going to get murdered.”
* In Paris, the CAC-40 share index gained 8.46 to a record finish of 2,251.48. French shares set the new closing high on the last day of the December trading account and dealers said the market should start the January account on Monday with the same positive tone, with interest rates set to fall soon.
Euro Disney SCA closed down 0.4 franc at 33.2. The stock continues to suffer after a statement by its auditors that unless creditor banks come up with a restructuring plan soon, the Paris theme-park operator could face bankruptcy.
* In Frankfurt, the German share market was closed for Christmas Eve. Trading will resume on Monday. On Thursday the benchmark DAX 30-share index closed at a record 2,222.84, up 71.82 points from last Friday.
* In Tokyo, stocks closed lower in thin trading as investors worried about the government’s slow response to calls for substantial economic steps. The Nikkei average closed down 304.63 points at 17,141.11, losing 910.80 points since last Friday.
Many investors expected Prime Minister Morihiro Hosokawa to talk about economic stimulus at a news conference Friday afternoon. They unloaded stocks as it became clear the conference wouldn’t take place during trading hours.
At the conference, Hosokawa promised action early next year on plans to deregulate Japan’s economy and boost economic recovery. The prime minister failed, however, to announce the specifics of plans for a long-discussed income tax cut and other fiscal measures designed to pull Japan out of its lingering economic downturn.
* In Hong Kong, share prices closed sharply higher with the main index finishing above the 11,000 level for the first time. The Hang Seng Index ended the half-day session up 158.64 points at a record 11,039.84, gaining 470.98 on last week. The index has gained 102% this year.
Overseas demand for blue chip property stocks spearheaded the advance, brokers said, but turnover was thin. The government announced new zoning regulations Thursday to encourage developers to replace many of the decaying buildings of Kowloon, one of the world’s most densely populated areas.
* In Mexico City, shares gained for the third day in a row as investors bought stocks hoping companies earnings will rise in 1994, analysts said. The Bolsa index, which has gained 45.9% so far this year, gained 5.23 points, or 0.2%, Friday to finish at another record high of 2,567.07.
* Currency trading was quiet, ending early for the holiday. The dollar was quoted in London at 1.6948 marks, barely changed from 1.6935 late Thursday, and rose a little against the yen to 110.74 from 110.55.
* Gold was fixed at $386.60 an ounce in London, compared with Thursday afternoon’s $384.95 fix and close of $384.85 as dealers completed book squaring before London’s four-day holiday weekend.
* Oil prices were barely changed in limited London trade. February futures for the world benchmark Brent blend of crude oil settled at $13.64 per barrel, up just 2 cents from Thursday and not much changed from $13.56 a week ago.
Traders said forecasts of colder weather in the northeast United States had supported prices in the approach to the Christmas and New Year holidays.
Selected Interest Rates
Averages of daily rates ended Thursday, in percent Corporate AAA bonds: 6.99% 90-day CDs: 3.19% 3-month Treasury bills: 3.06% Bank prime rate: 6.00% Federal funds rate: 2.99% Municipal bonds: 5.36% Discount rate: 3.00% Source: Federal Reserve Board
