World markets up

Press, 26 November 1987, Page 32

World markets up

. Overseas sharemarkets continued to recover lost ground, with the Australian and Japanese stock exchanges following earlier leads by Wail Street and London. In New York, stock prices surged higher on news of interest rate cuts in West Germany, France, and the Netherlands and healthy U.S. economic growth. The Dow Jones average of 30 industrials rose 40.45 points to close at 1963.53. The European interest rate cuts should give the United States Federal Reserve room to cut its own interest rates, or at least not raise them, analysts believe. In addition, it could stimulate European economies to consume more imports from the United States. In London, shares were higher in modest afternoon trading here, extending their morning gains after news of the European interest rate cuts in West Germany, France and the Netherlands. Dealers said the rise in the U.S. dollar, which came after the interest rate news, boosted the leading U.K. exporters. Today’s early gains

on Wall Street similarly gave the wider market a lift. The market was encouraged by the interest rate cute, which some dealers suggested were co-ordinated and could mean any forthcoming Group of Seven Industrialised Nations meeting might agree on interest rate and currency stabilisation.

In Tokyo, shares rallied broadly in thin trade after interest rate cute by three European nations and rises in Wall Street and London stock prices on Tuesday, In Hong Kong, share prices were higher at. midday as improved sentiment overseas helped support the local market, brokers said.