Euro-Bourses Firm, London At Record High

The blue chip FTSE 100 index peaked at 3,883.4, 5-1/2 points up on its previous record set on Monday, after British M4, the broad measure of money supply, showed money growth remained subdued through July.

But trading interest was again muted and shares slipped back to 3,881.8 by late morning. Retailers provided the main impetus.

Markets were nervously awaiting the interest rate decisions from a Federal Reserve open market committee meeting later on Tuesday, and the Bundesbank's Council meeting on Thursday.

Given these worries, positive German money supply data failed to inspire the German stock market, which traded mixed after the Bundesbank announced slower growth of key M3 money supply figures and virtually guaranteed a cut in its key money market rate.

 

French stocks opened higher and breezed up 21 points, quickly pushing the index through the 2,000 barrier for the first time since August 8, on strengthened hopes of a new round of rate cuts.

Wall Street, also stilled by the FOMC meeting and general summer torpor, had its slowest full day of trade this year on Monday, which may have influenced Frankfurt's less than euphoric response to the money supply data.

Analysts said the British money supply figures would give further ammunition to Chancellor of the Exchequer Kenneth Clarke if he wants to trim the 5.75 per cent base interest rate again in coming months. It is a good figure...most people hadn't expected the figure to come back into the monitoring range, which is about the first time for six or seven months,