Around the World's Markets

LONDON

THE FTSE-100 yesterday recorded its second-largest points rise, boosted by hints that the US Federal Reserve may lower rates and by large overnight bounces in Tokyo and Hong Kong.

The benchmark index closed up 180 points, or 3.4 per cent, to 5,347.0 - within a whisker of its 181-point record rise achieved in August. The smaller indices were also higher, with the FTSE-250 jumping 83.8 to 4747.1 and the small cap rising 15.7 to 2084.9.

Market Report, page 17

FRANKFURT

AN OVERNIGHT rally in Asian stocks and hints that US rates could soon fall helped German shares to end around 23 per cent higher, with the DAX closing up 103 points at 4,923.4, and the electronic Xetra ending up 80.8 points at 4,945.7.

Banks were marked higher, despite their exposure to Russia, after hints from Alan Greenspan, Federal Reserve chairman, that US rates could be cut sooner than expected. Dresdner Bank leapt 4 per cent.

TOKYO

THE BENCHMARK Nikkei 225 index posted its second-largest points rise this year, jumping 5.32 per cent to 14,790.06.

Public and corporate pension funds poured money into the futures market to cover short positions ahead of Friday's expiry of index options and futures. The dollar fell on sales by US hedge funds and a late surge in Tokyo stocks: the dollar at one point fell by more than three yen before turning back up to 131.08, off an early high of 134.67.

HONG KONG

THE HANG SENG index rose almost 8 per cent - its biggest rally in three weeks - after government moves on Saturday to strengthen the currency and dampen swings in interest rates. The steps were aimed at ensuring Hong Kong banks have enough cash when they need it.

The Hang Seng rose 588.29 to 8076.76, its first close above 8,000 since 24 July. At almost HK$10bn, trading was the busiest since the government ended a US$12.5bn buying spree.

KUALA LUMPUR

MALAYSIAN SHARES resumed their upward surge as the prime minister, Mahathir Mohamad, took on the mantle of finance minister. Aggressive buying by local institutions and speculative retail players pushed the Composite index of 100 blue-chip stocks up 23 per cent to close at 445.06.

Last week, the Kuala Lumpur Stock Exchange imposed restrictions which in effect banned trading in its shares outside the country. "They're closing the door," one trader said.