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. Last Updated: 07/27/2016

Dollar Rises, Germany Hits Record Close

LONDON -- German shares powered to a record close Monday, building on last week's rally with help from the strong dollar -- trading close to a six-week high against the Deutsche mark.


Europe's other major bourses were weak. London was undercut by worries over interest rates and the strength of sterling, and Paris saw a mid-session recovery evaporate as Wall Street opened weak.


The Dow Jones Industrial Average was off around 40 points after the first 30 minutes of trading.


The dollar rose against the mark after France and Germany reiterated their commitment to a stable franc-mark rate. It was also trading at a near two-year high against the Swiss franc and lifted off its lows versus the yen in the European afternoon.


Traders also attributed a softer mark to renewed speculation about a possible cut in German interest rates.


"The repo rate may possibly be cut, but I don't think Germany will cut official interest rates," said the Swiss-bank trader.


German government bonds, or bunds, succumbed to modest early profit-taking and were trading steady at lower levels in the afternoon. British bonds, or gilt, futures outperformed other major markets during the morning, but failed to push through to new contract highs.


The London copper market began trading nervously. Although copper prices eased a little, traders said there was still a possibility of turmoil Wednesday if December options expire near $2,600 a ton.


If all investors with open call options to buy chose to take delivery of the metal, their demands could exceed the amount of copper held in the warehouses of the London Metal Exchange.


?Fading interest in blue chips sent Tokyo's stock market tumbling through the 21,000 level Monday, but in Taipei late buying pushed the index up more than two percent to a 22-month high.


In Hong Kong, the Hang Seng index finished up almost 1 percent. Bombay's bourse was the biggest Asian loser outside Tokyo, falling 1.34 percent.


Brokers said Tokyo's key Nikkei 225 average fell 1.64 percent after a recent boom in blue-chip issues waned, triggering a wave of selling at the end of an otherwise dull session. The Nikkei ended at 20,674.69, down 345.67 points.