Around the World's Markets

LONDON

WORRIES that interest rates will be forced even higher weighed on shares. An early gain was wiped out after heady retail sales figures for May underlined the dangers of the Monetary Policy Committee opting for yet dearer money.

Footsie, off 63.7 points at one time, ended 20.6 lower at 5,812.1. Take- over talk, this time embracing Zeneca, was in the air, pushing its shares 77p higher to 2,625p. Best-performing blue-chip was mobile phone group Orange, which lifted 29p to 510p.

Derek Pain, page 23

NEW YORK

US STOCKS declined as scepticism that Asia is on a quick road to recovery offset gains by McDonald's and Philip Morris.

Stocks surged on Wednesday after the US sold dollars for yen and Japan pledged to resolve the massive bad bank loan problem. The confidence this generated went into reverse yesterday. The Dow Jones Industrial Average fell 16.94 to 8,812.52 in early afternoon trading. The Standard & Poor's 500 Index fell 1.66 to 1105.34. The Nasdaq Composite Index fell 3.91 to 1772.37.

TOKYO

ASIAN STOCKS and currencies soared as joint US and Japanese support for the yen eased local interest rates and calmed fears over currency devaluations.

In Japan, the Nikkei 225 Index, Asia's biggest index by value, climbed more than 4 per cent, led by Sony and Nomura Securities, and the yen rose as high as 136.15 to the US dollar today. The yen's plunge to 146.14 earlier this week threatened to accelerate Hong Kong's slide into recession, and raised the spectre of a devaluation of China's currency, the yuan.

GERMANY

INTEREST-RATE jitters sent European bourses down yesterday, reversing an early boost from Asian equities soaring on the stronger yen.

The German Dax ended down 52.94 points at 5,689.89 after the Bundesbank's June monthly report hinted at a slight interest-rate increase in the near future. Meanwhile, speculation that Volkswagen is about to buy the Italian car maker Bugatti appeared to have little effect on the stock, with the shares retreating to DM1,748 ($978).

INDIAN SHARES failed to join the party of other Asian markets yesterday, with the top-30 share Bombay index ending 3.19 per cent or 108.62 points lower at 3,292.33.

Dealers said strong rumours of some brokers having obtained a stay on the market regulator's temporary ban on short sales triggered fresh selling. These measures which had been imposed to halt a persistent slide in share values had seen speculators scurrying to cover positions on Wednesday. Yesterday the Bombay exchange issued a denial.