Monday, January 18, 1999 Published at 09:54 GMT
Business: The Economy
Mergers boost markets
Markets soared as merger fever took hold
A fresh round of mega-mergers has boosted share markets in Europe and the Far East. London's stock exchange was the top performer, because of the involvement of many UK companies in merger deals.
Dealers said the market had been boosted by receding worries about economic collapse in Latin America and the good performance of global equity markets.
Mergers were the other big market movers. The big deal between mobile phone operators Vodafone and Airtouch was sealed and pushed up Vodafone shares which were among the top performers in the City.
Leading defence groups BAe and GEC confirmed that they were in merger talks involving GEC's Marconi subsidiary, creating new interest in the defence industry.
In Germany, the DAX index rose sharply at the opening and stayed at solid levels. Frankfurt's top index ended the day up 90 points or 2.1% at 5,050. Banking shares did well after Friday's $30bn merger of Banco Santander and Banco Central Hispano.
Ralf Zienert, a trader at Credit Suisse in Frankfurt, said: "German banks don't have a big exposure to Brazil, but they were hit hard last week and are now rebounding."
Telecom shares were big movers too, boosted by rumours about possible deals between German phone companies.
Stock markets in the Far East also started the week higher, with Tokyo shares closing up 0.5%. Hong Kong shares advanced more than 2%, following Wall Street's gains at the close of last week.
Wall Street is closed on Monday for a public holiday to celebrate Martin Luther King's birthday.
Brazil's decision to stop defending its currency with US dollar reserves and allow the real to float prompted a sharp rebound in the world's share markets on Friday as Wall Street jumped 2.4%.
Wall Street surprised many on Friday, soaring during the whole trading session. New York Stock Exchange's main index, the Dow Jones, closed up 219 points or 2.41% at 9,340 reclaiming most of the losses suffered on Thursday.
Technology shares continued their seemingly unstoppable rise. The Nasdaq index, home to many computer and Internet companies, was up more than 71 points, or 3.14%, at 2,348. Top performer was a company that made its stock market appearance: Marketwatch.com gained more than 475% on its first day of trading.
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