Overseas Markets down

Press, 28 January 1988, Page 25

Overseas Markets down

NZPA-Reuter Tokyo Share prices fell in modest trade in Tokyo yesterday, on Wall Street’s overnight decline and due to profit-taking after four consecutive sesssions of gains, brokers said. "People are taking a breather after four days of rises,” a broker said. The Nikkei Average fell 162.85 points, or 0.69 per cent, to 23,335.91. The index gained 180.36 points on Tuesday. Falls led rises five to four, in turnover of 850 million shares against 630 M on Tuesday. Market confidence had been boosted by upward momentum since last Friday, spurred by the Bank of Japan leading short interest rates lower and the cutting of the long-term prime rate to 5.5%, effective January 28, brokers said. Although the focus had been on domestic-demand and other interest rate sensitive shares, much of the buying had been speculative. Investors have no sector to turn to which is considered a safe investment, so they sold, brokers said. In New York on Tuesday (early yesterday N.Z. time),the stockmarket declined,slipping lower in concert with falling bond prices and some profit-taking in the wake of its recent gains. On Friday and Monday, the Dow Jones average of 30 industrial stocks rose by a combined 67.14 points, making a pull-back inevitable, analysts said. But the expected profittaking came sooner rather than later, when bond prices

slumped after a government report. The report showed durable goods orders jumping a higher-than-expected 6.7% in December, compared with a 0.1% hike in November. Recent gains on the bond market had contributed to the stock' market’s two-day rally. As bond prices rose, interest rates fell, making stocks more attractive to investors. When bond prices fell, interest rates rose putting downward pressure on stocks, ■brokers said. Meanwhile, takeoverrelated issues continued to attract attention. Federated Department Stores moved higher after Canadian developer Campeau Corp, bid $4.28 for the company. Eastman Kodak moved lower, amid continuing market disenchantment over its 8950 c share offer for Sterling Drug last week. In London shares were firmer but stood below their best levels of the day in subdued late trading after Wall Street showed an early 10-point fall, dealers said. Stocks had reached their highs around mid-session after the latest Confederation of British Industry (CBI) quarterly survey came out with a less gloomy picture of the U.K. industry than had been feared by many in the market.