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Foreign Markets Post Gains

November 27, 1998| From Times Wire Services

Stock markets in Asia and Europe advanced Thursday, as Japanese investors awaited economic-stimulus measures and the European markets percolated with rumors of a big oil merger.

Throughout Latin America, stocks rose on expectations that interest rates in the region will decline, reviving economic growth and boosting company profits.

Brazil's central bank cut rates for the 12th straight working day, although at a slower pace than in previous days, responding to an increase in capital outflows. About $286 million left Brazil on Wednesday, the highest daily outflow since Oct. 16.

Sao Paulo's benchmark Bovespa index was little changed, rising 44 points, or 0.5%, to 8,953.74.

In Peru and Venezuela, shares were boosted by recent central-bank rate cuts, and the Chilean benchmark index advanced 0.6%. In Mexico, the Bolsa index rose 0.44%. But Argentina's benchmark Merval index fell 0.5%.

In Asia, Tokyo's main index, the 225-issue Nikkei stock index, gained 134.30 points, or 0.89%, closing at 15,207.77. The index rebounded from a drop of 91.17 points Wednesday.

Investors have been encouraged by an alliance between Prime Minister Keizo Obuchi's ruling party and the minority Liberal Party, which has called for suspending an unpopular sales tax and trimming the government bureaucracy, traders said.

The stock index has rallied about 800 points this week, closing above 15,000 Tuesday for the first time since Aug. 25.

In Hong Kong, the blue-chip Hang Seng index rose 0.5%. The index has gained 8.4% over the past two weeks.

Most other Asian markets posted slim gains or losses, with the exception of South Korea, where shares fell 3.8%. Analysts said the losses were caused by massive selling by local institutional investors to hedge against the futures market.

In London, the FTSE-100 index rose 72.60 points, or 1.26%, to close at 5,827.9.

Some traders attributed the gains to a Financial Times report that U.S. oil giants Exxon and Mobil are in an advanced stage of merger talks. Several European oil companies saw their shares benefit from the prospect of continued industry consolidation, led by the British-traded shares of Royal Dutch/Shell Group, which rose 4%. British Petroleum, which stunned the industry in August with its huge acquisition of Amoco, also rose.

Most other European markets rose too. Frankfurt's DAX closed 2.3% higher, the Paris CAC-40 rose 1.7% and the main indexes in Milan and Madrid both rose 2.6%.

Volume in most markets was light, as traders took cues from the United States, where markets were closed for Thanksgiving.

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