London, Sep 6: European share prices posted modest gains in the light of renewed strength of the leading international markets amid predictions that US interest rates will not be raised in the short-term. In London, the FT-SE 100 index of leading shares rose by 0.69 per cent, or 44.3 points, in early trading to 6,376.4 points. In Frankfurt, the X-DAX index opened 0.14 per cent higher at 5,343.70 points and in Paris, the CAC 40 index was trading 0.72 per cent higher in mid-morning at 4,705.91 points.The gains followed a surge on Wall Street last Friday, when the US market rose by 2.2 per cent after a weaker-than-expected August employment report eased concerns that the Federal Reserve would raise interest rates later this year.
The financials sector gained from the confirmation of a link-up of 2 leading British financial institutions. NatWest bank said that it would pay 10.75 billion (16.2 billion euros, $ 17.3 billion) for Legal & General Insurance Company. NatWest fell by five pence to 1,138 pence onthe news, while Legal & General fell by 0.5 pence to 204.75 pence.
Among the other financial issues, HSBC rose by four pence to 767 pence and Lloyds TSB rose by 11.5 pence to 852.5 pence. Dealers said that this sector in particular hung on the next interest rate decision from the Bank of England, due on Wednesday. While most economists predicted that there would be no change in British borrowing costs, some predicted that the central bank might implement a pre-emptive rate rise soon.
Meanwhile, share prices in Tokyo rose by 1 per cent in the early morning as investors took heart from a Wall Street rally, brokers said. The key Nikkei average of 225 selected issues gained 172.44 points to end the morning session at 17,802.43.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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