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. Last Updated: 07/27/2016

Record Highs For German, British Stocks

LONDON -- Leading German and British stocks closed at record highs Monday, boosted by another strong start on Wall Street where investors are confident U.S. inflation is under control.

The German DAX index, underpinned by the firmer dollar, which makes German exports more attractive, ended up 33.91 points at 2,629.87, only slightly below the session high of 2,630.32. Frankfurt floor trade ended about 30 points above its previous intraday peak, set Friday.

London stocks also scored a record close at 3,977.2, up 9.3 points on the day and some 8 points above their Friday intraday high, but off Monday's opening peak of 3,980.8.

Dealers said cautious investors were still sitting back to see if New York could repeat its 1.15 percent rise of Friday, when the Dow closed at a record 5,838.52 as treasuries powered ahead. By the time London closed, the Dow was up 32.55 points to 5,871.07, or more than half a percentage point.

The psychological 4,000 level looked a probability for Britain's FTSE in the near term, London dealers said, though volumes remained thin.

"We saw a squeeze up on the opening after Friday's euphoria, and then it came back. It feels like it will still go to 4,000 this week, but we will have to have Wall Street very strong to get it there," said one trader.

Analysts warned that one element that could take the wind out of London shares is political uncertainty in Britain ahead of the general election, which must be held before May 1997.

In Paris, leading shares, helped by the stronger Wall Street, closed up 5.8 points or a quarter of a percent, extending last week's 3.77 percent advance. Dealers said other positive factors were rising bond prices and a stronger franc.

? Asia stock markets rallied Monday, inspired by record gains on Wall Street, where expectations were high that the latest batch of U.S. economic data would obviate the need for higher interest rates.

Investors swept into the markets following news of weaker-than-expected gains in both the latest U.S. consumer price index and retail sales.

Hong Kong stocks rallied in line with Wall Street, but the key Hang Seng Index ended just short of its 1996 high of 11,600. The index ended up 198.86 points, or 1.75 percent, at 11,567.90.

"The market is actually quite strong all of a sudden. All Asian markets today are a lot better over what is seen as a slightly better interest rate outlook," said James Osborn, sales director at ING Barings.

Tokyo stocks were closed for a public holiday. The key Nikkei 225-share average closed Friday up 398.71 points, or 1.95 percent, at 20,842.64.

Philippine shares shot up nearly 40 points, or 1.25 percent, to end at 3,233.67 points, while stocks in Indonesia rose 5.36 points, or 0.98 percent, to 554.40.

Thai stocks recouped some recent losses and garnered support from purchases of shares by a private fund set up to support the market when prices were depressed. Stocks gained 19.22 points, or 1.85 percent, taking the SET Index to 1,058.87.