US Markets - Wall Street posted modest gains this week as worries over the economy, inflation, interest rate policy and earnings sparked choppy trading.

One sector continued to flash a warning: financials.

Energy, pharmaceutical and railroad sectors may have enjoyed a good week but financials were still stuck in the tank.

Within the S&P 500 index, the sector remains 2.9% lower so far this year. The financials are the one negative signal for the stock market and this could be flagging a credit contraction-led downturn.

Many investors fear problems in the US mortgage market are a harbinger of further consumer debt-laden pain and some of the weakest stocks in the Dow Jones Industrial Average this year include Citigroup and American Express.

Subprime and continued slowness in housing are both drags on the financial sector. Uncertainty over the economy and the subprime fall-out will probably prevail for several months.

For its part, Citigroup tried to boost its stock price through cost-cutting and said it planned to axe 17,000 jobs. The stock rose 0.1% to $51.60 this week and is down 7.4% for the year.

Subprime exposure was blamed in clipping results at General Electric. The conglomerate rose 1% for the week to $35.38 as first-quarter profit rose 2% from a year earlier and matched estimates.

American Home Mortgage plunged 16.3% to $21.63 after the home lender lowered its profit forecast for this year.

The S&P homebuilders index continued to slide this week and is now down 21% this year after the National Association of Realtors forecast existing home sales would fall 2.2% in 2007, down from a previous estimate of a 0.9% slide.

Late in New York on Friday, the S&P closed up 0.35% at 1,452.84, for a 0.6% rise this week. The Nasdaq Composite rose 0.5% to 2,491.94 on Friday, for a gain of 0.8% this week. The Dow rallied 0.5% to 12,612.13 for a gain of 0.4% since Monday.

A boost for blue chips on Friday was Merck after the pharmaceutical raised its first-quarter and annual profit forecasts – a move that offset an unfavourable ruling for one its pain reliever drugs. The stock hit a three-year high of $50.80 and at the closing bell on Friday was up 10.25% at $50.21 for the week.

Missing the numbers hurt Research in Motion. Its fourth-quarter earnings were not good enough for investors, who sold the stock down 8.9% to $132.74. Ahead of its results on Wednesday, the maker of the Blackberry set a 52-week high at $148.95.

In deal news, the Nasdaq Stock Market made headlines, up 5.25% at $31.23, after it revealed it was holding talks about purchasing the Philadelphia Stock Exchange, which specialises in options trading.

MedImmune jumped 21.5% to $44.19 as the drug company said it would consider being sold. Manor Care said it had retained JPMorgan to advise the manager of nursing homes and it rose 13.9% to $63.48.

Shares in SLM, the provider of student loans in the US, surged 12.8% to $46.76 on Friday on a report that Blackstone was looking at a $20bn buy-out of the company. That came after SLM reached a $2m settlement with the New York attorney-general over school loan practices.

Railroad stocks rallied when Warren Buffett’s Berkshire Hathaway disclosed a 10.9% stake in Burlington Northern Santa Fe.

The stock surged 9.6% to $90.69 and the S&P rail index rose 6.7% this week as Berkshire built stakes in two other rail companies.

Another old industrial sector, steel, rallied and the S&P steel index return in 2007 is now up at 28.65%. Ipsco jumped 12% to $148.50 after the maker of steel pipes said there could be a sale of the company.

Shares in Dow Chemical swung sharply this week. The stock hit a 52-week high of $47.60 on Monday amid speculation of a buy-out valued around $50bn. Dow refuted such talk and then fired two executives for “unauthorised” discussions about a purchase of the company. For the week, Dow rose 3.2% to $45.88.

European Markets - Takeover activity continued to dominate European equities this week amid a series of deals that included the creation of Europe’s biggest property company.

The FTSE Eurofirst 300 rose 0.9% to 1,553.56 over the week.

So let's start with Germany where shares closed higher today as indices tracked a higher opening on Wall Street with shares in SAP and BASF leading the DAX higher on M&A rumours.

The DAX closed 69.12 points or 0.97% higher at 7,212.07 after trading between 7,150.70 and 7,213.20 throughout the day.

Meanwhile, the MDAX added 70.99 points or 0.67% to 10,596.43 as the TecDAX gained 8.36 points or 0.96% to 876.93.

DAX futures were 33.00 points or 0.46% higher to 7,260.50 as bund futures lost 0.32 points or 0.28% to 113.50.

BASF was rumoured to be the target of a takeover bid by US chemicals giant DuPont.

The shares gained 2.78 Eur or 3.22% to 89.22 as it was speculated that DuPont was to bid 93 Eur a share for the German rival.

Traders did not have much faith in the rumour, stating it was one amongst many on a Friday afternoon.

SAP gained 1.20 Eur or 3.49% at 35.58, as the vanguard of bluechip gainers after Merrill Lynch reiterated its 'buy' rating with its price target maintained at 57.50 Eur, saying after a shaky first quarter, the coming quarter looks more positive for the software maker.

SAP shares were also lifted by a Euro am Sonntag magazine report that said the software giant sees its orders from mid-sized businesses climbing to 40-45% from 30% by 2010.

Hypo Real Estate was up 1.25 Eur or 2.58% to 49.64, buoyed by rumours of a possible takeover from Commerzbank and Deutsche Bank and due to technical trading grounds as the shares had not advanced as quickly as the index over the last weeks, traders said.

Lufthansa gained 0.49 Eur or 2.27% to 22.12, as investors speculated on its profits growing faster than anticipated, dealers said.

This came after Euro Finanzen reported that Lufthansa chief financial officer Stephan Gemkov said the airline may exceed 1  billion Eur in operating profit in 2007, earlier than it had originally planned.

On the other side of the DAX, Infineon lost 0.18 Eur or 1.53% to 11.60, driven lower on the back of Korean rival Samsung Corp's release of poor first-quarter results due to weak DRAM prices and weaker-than-expected DRAM demand, dealers said.

DaimlerChrysler shares were down 0.47 Eur or 0.77% to 60.80, followed by Commerzbank which lost 0.06 Eur or 0.18% to 34.19.

On the MDAX, K & S added 5.00 Eur or 5.75% to 91.90, followed by Kloeckner, which rose 1.30 Eur or 2.88% to 46.50.

Wacker Chemie gained 1.64 Eur or 1.22% to 135.79, after Morgan Stanley raised its target price to 161 Eur per share from 140 and reiterated its 'overweight' rating.

Across to France now where Share prices ended higher at a fresh six-and-a-half-year high closing level despite mixed early trade on Wall Street as investors focused on broadly reassuring US inflation data and as heavyweights Sanofi-Aventis and Total put in strong gains.

The CAC-40 index closed up 40.40 points or 0.70% at 5,789.34, its highest closing level since Nov 2000.

31 CAC-40 stocks closed up and nine down. Volume for the day was 4.6  billion Eur. On the Matif, April CAC-40 futures were trading up 14.5 at 5,771.

Peugeot led gains on the CAC-40, ending up 2.35 or 4.38% at 55.96 after fresh rumours that the group may sell its car-parts subsidiary Faurecia.

The rumours had caused Faurecia to spike just before the close yesterday, lifting the shares 4.76%.

European new car data today showed that while March new car registrations in France overall fell 3.8%, sales at the PSA Group -- comprising Peugeot SA and Citroen -- rose 0.3%.

Sanofi Aventis was another sharp gainer, adding 1.83 or 2.79% at 67.44, in line with European peers after Merck raised its first-quarter earnings guidance last night, reporting growth across its product lines.

Oil stocks were in favour, with Total up 0.74 or 1.40% at 53.68 on the back of rising crude prices.

Vallourec rose 2.80 or 1.43% at 198.00.

CM-CIC said Canadian steelmaker IPSCO's announcemant last night that it is in negotiations with an unnamed company gave Vallourec's shares a speculative shine.

BNP Paribas rose 0.74 or 0.92% at 81.04 after being upgraded to 'outperform' from 'neutral' by Credit Suisse. The broker highlighted that the coming few weeks could provide a catalyst for the shares since the first quarter may provide a positive earnings revision.

Heavyweight L'Oreal added 1.10 or 1.30% at 85.60 ahead of its first quarter sales report due next week.

Essilor, which also reports sales nest week, was up 1.09 or 1.26% at 87.71.

On the downside, Eiffage dropped 3.87 or 3.34 at 111.83 as the stock remained volatile amid ongoing speculation about a battle for control between shareholders ahead of the April 18 AGM.

Into Belgium now where Shares also closed higher, in line with other European markets, with steel cord and wire manufacturer Bekaert and brewer InBev leading the blue-chips.

At the close, the Bel 20 was up 13.02 points or 0.29% at 4,581.26.

Bekaert was up 1.38 Eur or 1.34% at 104.66 Eur.

InBev rose 0.70 Eur or 1.25% to 56.68 Eur. The brewer declined to comment on a report that its former chief executive John Brock is taking legal advice over 30  million Eur he believes he is owed under a golden handshake package following his departure in 2005.

Utility Suez was up 0.37 Eur or 0.91% at 40.88 Eur. Sociedad General de Aguas de Barcelona's board said in a statement it will delay issuing a recommendation to shareholders on La Caixa and Suez's 27.0 Eur per share offer until it has received regulatory approval.

Suez and La Caixa unveiled the bid last week, to be made through their joint investment vehicle Hisusa which currently holds 47.87% of Agbar.

Financial services group Dexia was up 0.10 Eur or 0.44% at 22.87 Eur. The group sees its recently acquired Turkish unit Denizbank contributing 300  million Eur or 11.0% to the group's net profit by 2009, chief executive Axel Miller told daily Boersen-Zeitung.

Peer Fortis was flat at 34.80 Eur. KBC Group was down 0.53 Eur or 0.56% at 94.35 Eur.

For the fallers, telecoms group Belgacom was down 0.33 Eur or 0.98% at 33.38 Eur as analysts downplayed the significance of its ICT unit, Telindus', buy of privately-owned Dutch ICT storage specialist ISIT.

Supermarket group Delhaize was down 0.08 Eur or 0.11% at 71.30 Eur.

Outside the Bel 20, Kinepolis was up 0.98 Eur or 1.77% at 56.48 Eur. The cinema operator said after the market closed that its first quarter visitor numbers fell 6.0% year-on-year to 5.7  million, from 6.1  million recorded in 2006.

In The Netherlands Shares closed higher in Amsterdam, on continued M&A speculation, while climbing oil prices buoyed oil stocks.

The AEX closed up 4.77 points or 0.92% at 523.68, after opening at 519.80 and trading in a range of 519.72-524.21.

ING bucked the downward trend most of the financials followed throughout the day, ending at 32.83 Eur, up 2.15% and leading the AEX at close.

ABN Amro recovered late in the day, moving up 0.09% to 333.65 as M&A talk regarding the Dutch bank refused to subside. Conflicting reports suggested Barclays was poised to walk away from its mooted merger with ABN Amro or would simply be delayed in making its final offer by due diligence, that will extend beyond the exclusivity deadline for the merger talks.

Aegon also made an afternoon comeback, closing at 15.57 Eur, but Fortis failed to join the rally, closing down 0.11% at 34.80.

Royal Dutch Shell closed up 20.15% at 32.83 Eur after leading blue-chip gainers throughout the day thanks to oil prices being boosted by refinery trouble in the US and an International Energy Agency report pointing to a 1  million bpd increase in demand later this year.

Meanwhile, SBM Offshore gained 1.51% at 27.49, with the effect of oil's rise comPounded by rumours the company is in a strong position to win the contract to deliver the Floating Production Storage and Offloading (FPSO) facility for Chevron's Nsiko project in Nigeria. SNS Securities said Chevron is targeting first oil in 2012 so no details on the contract or sale are expected this year. 'Nevertheless, the market is buoyant,' SNS Securities said, rating SBM Offshore at 'buy' with a price target of 32.50 Eur.

Fellow oil-related stock Fugro put on 0.49% at 38.74.

Ahold rose 2.03 to 9.06 while Unilever closed up 1.79% at 22.19.

Staffing stocks were also up. Randstad put on 1.76% at 60.26 while Vedior added 0.58% to 17.22 and USG People saw a 0.92% incline at 31.67.

TomTom rose 1.73% to 29.48, while sometime supplier Tele Atlas ascended 0.12% to 16.24. Rabo Securities initiated coverage of Tele Atlas with a 'hold' rating and a target price of 19 Eur, saying the Dutch digital mapping company has clear growth prospects and its high operational leverage will ensure strong earnings growth in the years ahead.

Philips rose 0.24% 29.35 on news it will acquire privately-held US company Digital Lifestyle Outfitters (DLO) for an undisclosed sum.

In Switzerland Share prices closed markedly higher across the board, rebounding from two consecutive days of losses and tracking gains on the DJIA, with drugmaker Novartis the top gainer.

At the close, the Swiss Market Index was 67.42 points higher at 9,177.48, and the Swiss Performance Index up 56.68 points at 7,365.76.

The Euro was slightly higher against the Swiss franc at 1.6425 SFr, while the Dollar was little changed, at 1.2161.

Swiss shares closed slightly off intra-day highs after US consumer confidence data fell short of expectations, leaving investors to ponder conflicting trade balance and PPI data earlier.

Top performer was Novartis, up 1.2 SFr or 1.8% at 68.30 SFr, with investors continuing to welcome the pharma group's 5.5  billion sale of its Gerber baby food business to Nestle.

The stock was further boosted by clinical study results showing that Glivec reduces the risk of cancer recurring after surgery for gastrointestinal stomach tumours.

Peer Roche added 2.50 SFr or 1.1% at 223.50, ahead of first-quarter sales results Wednesday and after its Genentech affiliate posted better-than-expected first-quarter results yesterday.

The stock was also helped by the publication of positive clinical data from tests with anaemia drug candidate Mircera in patients with chronic kidney disease.

Other top gainers included Synthes, trading 2.50 SFr or 1.6% higher at 155.50 ahead of first-quarter results on Thursday, Syngenta, up 3.7 SFr or 1.5% at 245.1 SFr, and SGS, up 19 SFr or 1.3% at 1,535 SFr.

Banks were also higher: Credit Suisse gained 0.35 SFr at 89 SFr, while UBS ended 0.6 SFr higher at 74.6 SFr.

Bringing up the rear was Clariant, off 0.1 SFr at 20.7 SFr, on profit-taking.

Insurers were mixed. Swiss Life ended 1.50 SFr lower at 312.25 SFr, while Zurich Financial shed 1.0 SFr at 349 SFr on profit-taking. Peer Swiss Re added 0.2 SFr at 115.8, reversing earlier losses.

Nestle added 0.50 SFr at 438.75 SFr, with analysts generally welcoming the Gerber acquisition as a strategically strong move, but there were some critical voices regarding the higher-than-expected price.

Outside the SMI, Converium gained 0.3 SFr or 1.4% at 22.4 SFr, as today's publication of its board report does not contain any major surprises and will have no material impact on shareholders' decisions, most analysts agreed.

Into the Nordic arena now and starting with Sweden where Stockholm shares closed slightly higher on bargain hunting, supported by easing concerns about economic growth.

The OMX Stockholm index closed up 0.69% at 411.37, while the OMX Stockholm 30 index rose 0.82% to close at 1,263.53. Turnover amounted to 21.46  billion SKr.

The main sector movers were telecommunication services, which closed up 0.72%; healthcare, up 1.33%; and retailing, 1.22% higher.

The major movers within these sectors included TeliaSonera, up 1.17% at 65 SKr bid; AstraZeneca, 2.54% higher at 383.50; and Lindex, up 1.74% at 87.50.

OMX closed down 4 SKr or 2.28% at 171.50, with the share trading ex-div 6.50 SKr. The shares jumped 10% yesterday after Dagens Industri reported the Nasdaq made a 23  billion SKr bid for the company. Analysts said the report was obviously incorrect, with one saying that OMX now looks expensive relative to its peers.

SSAB closed up 1.12% at 225, after Deutsche Bank raised its target price to 250 SKr from 240 SKr.

Neighbours Denmark saw Danish shares closed higher, led up by Royal Unibrew after the brewery secured a license agreement with Heineken, while GN Store Nord underperformed in the wake of yesterday's blocked sale of hearing aid business ReSound to Phonak.

The OMCX20 index was up 2.50 points at 472.98 and the OMXCB Benchmark index gained 2.67 points to 452.63.

The OMXC All Share index was up 2.41 points at 452.47 on turnover of 4.48  billion DKr.

Royal Unibrew was up 31.00 DKr at 736.00 after it secured a licensing agreement with Heineken under which it will brew and sell its beer in Denmark, and on speculation that Heineken might place a bid for the Danish brewer.

Carlsberg closed flat at 596.00 DKr.

GN Store Nord fell 3.75 DKr to 64.00, extending Thursday's downturn following the decision by German competition authorities to block the group's sale of hearing aid business ReSound to Switzerland's Phonak, dealers said.

Jyske Bank downgraded GN Store Nord to 'accumulate' from 'buy', saying it sees limited downside risk even if GN loses its appeal case against the German authorities, and thus keeps a positive recommendation.

Danske Equities downgraded GN Store Nord to 'sell' from 'hold', RB Boersen said.

DS Torm added 3.50 DKr to 386.00. The group will announce on its annual general meeting next Tuesday how it is to use the 4  billion DKr proceeds from the recent sale of its stake in DS Norden, Danish daily Boersen reported.

Novo Nordisk gained 5.00 DKr to 521.00. The group focuses on growth in China, and will reinforce its sales staff in the country during 2007, Boersen said.

AP Moller Maersk was up 700 DKr at 61,400. According to Berlingske Business, the group will introduce an HR focused educational programme for its employees.

William Demant closed flat at 516.00. Sydbank reiterated its 'neutral' rating for the group, saying that its new hearing aid Oticon Epoque strengthens its product portfolio but that earnings from the device are already included in the group's previous forecast for 2007.

Among other shares, NKT Holding gained 9.00 DKr to 450.50, East Asiatic Co added 5.00 DKr to 276.00, Novozymes shed 7.00 DKr to 510.00 and Vestas Wind Systems was down 2.00 DKr at 324.50.

In Norway Share prices closed up, boosted by the higher oil price and led by oil services company Odfjell Invest on a major contract award, and by oil and producer Statoil, on hopes of equity participation in the massive Russian Shktoman gas field.

The OSEBX Benchmark index closed up 3.41 points at 466.63 and the OSEAX All Share index rose 4.32 points to 527.4

Total turnover amounted to 13.7  billion NKr.

Adding to the upbeat conditions, Norway's Finance Minister predicted that the state's 300  billion usd offshore pension fund which invests the country's North Sea oil revenues, would see its value soar to more than 800  billion usd within a decade due to continuing strong crude oil prices.

The minister also said the fund was increasing its equity exposure from the current 40% level to 60% and intended to diversify into smaller cap stocks and other asset classes - selling down government bonds.

Beyond the general bullish trend, individual stock stories also played their part in lifting sentiment.

Statoil closed 1.8% up at 168 NKr, outperforming the Olso energy index which was up 1.2%, spurred by oil but also helped by renewed expectations it could by awared an equity stake by the Russians in the massive Shtokman gas field in the Barents Sea.

A senior Russian official in the Murmansk region told Thomson Financial that talks on Statoil getting a stake were going well and that the Norwegian group was in a good position to have its ambitions realised.

Last year the Russian authorities shocked Statoil and other oil majors by announcing that international equity participation in the field was not needed.

Shares of Norsk Hydro closed up 1.1% to 205.25 NKr.

Among oil service companies, Petroleum Geo-Services was up just under 1% to 160.50, SeaBird Exploration moved up 2.5% to 32.50 while TGS-NOPEC rose 2.3% to 143 NKr.

Statoil also helped lift up one of the oil services sector, awarding Odfjell Invest a 735  million usd contract for its semi-submersible drilling rig Deepsea Atlantic, currently under construction in South Korea.

Odfjell Invest ended as one of the top individual gainers, closing up 7.1% to 15 NKr.

Engineering group Aker Kvaerner said it has won, together with ERSAI, a 157  million usd contract for the first phase of the offshore Kashagan oil field development in the Kazakhstan sector of the Caspian Sea.

The Kashagan field, located 80 kilometers south-east of the city of Atyrau, is the first large-scale offshore petroleum development in Kazakhstan.

Aker Kvaerner shares closed up 1.1% to 139.50 NKr.

There was action in the financial sector also where Norwegian bank Sparebanken Nord-Norge strengthened after two major transactions took place, amounting to over 20% of the bank's outstanding share certificates.

Rounding out Scandinavia this week is Finland where Helsinki shares closed slightly lower with gains in some key stocks such as Nokia, which moved higher on a better-than-expected first-quarter report from Samsung, offset by losses in some selected bluechips like Outokumpu and Kone.

The OMX Helsinki 25 ended 0.20% lower at 3,143.05, while the OMX Helsinki was up 0.32% at 10,521.52 on 989  million Eur turnover.

Nokia closed 1.39% higher at 17.55 Eur after mobile phone number three Samsung this morning reported a better-than-expected first-quarter performance by its handset unit, suggesting the sector is in good shape.

In other news, Nokia said it rejects Qualcomm claims -- purportedly made in public statements -- that it does not use Nokia public patents, noting that the US chipmaker is currently using over 100 of its GSM/WCDMA and CDMA2000 patents in its chipsets.

In energy stocks, Neste Oil ended 1.63% firmer at 26.18 amid recovering oil prices, traders said.

Fortum closed 0.22% higher at 22.45 Eur.

Among industrials, Kone ended 0.23% weaker at 44.10 Eur after it said it has won a major order to deliver 30 lifts and six escalators to Capital Plaza, a five-tower multi-purpose residential, office centre in Abu Dhabi, United Arab Emirates, but gave no financial details.

Also in industrials, Outokumpu ended 2.17% lower at 24.82 Eur.

Wartsila B was down 0.23% at 47.63 Eur and Metso ended the session 0.18% firmer at 39.80 Eur.

Paper issues closed mixed, with UPM-Kymmene shedding 0.63% at 18.82 Eur, Stora Enso R was down 0.08% at 12.99 Eur, while M-real B added 0.35% at 5.66 Eur.

Sampo A closed down 4.10% to 23.38 and Huhtamaki was down 3.42% to 12.69, as both stocks went ex-dividend.

Elsewhere, Kemira GrowHow added 0.35% to 8.69 Eur after its plans to sell part of its Danish chemicals unit to Gropa A/S and relocate another part of its business in Denmark once the deal is wrapped up.

Heading into the Mediterranean now where in Spain Madrid's market closed higher in thin trade after a mixed response on Wall Street to inflation and confidence data, with Sacyr leading gains and REE down.

The IBEX-35 index closed up 82.3 points at 14,965.3 after trading in a range of 14,894-14,984 on turnover of 4.9  billion Eur.

The April future on the IBEX-35 closed at 14,969.0, up from 14,876.0 yesterday, on turnover of around 18,627 contracts.

Equities opened higher and held onto gains throughout the morning as European bourses recovered, buoyed by strength among constructors and continued M&A talk.

The IBEX-35 index rose higher still after flat producer price index in the US indicated inflation is not spreading through the broader economy, though the rally lost momentum after a mixed start on Wall Street amid a fall in US consumer confidence figures.

Sacyr led gains, adding 2.19 Eur or 4.93% to 46.60 after an upgrade to 'hold' from 'sell' from ING.

Construction peers were also higher, with FCC adding 0.75 to 77.00, Grupo Ferrovial up 0.60 to 77.00, ACS adding 0.29 to 48.00 and Acciona up 0.30 at 168.95.

OHL gained 1.40 or 3.97% to 36.65, extending yesterday's gains after an upbeat concessions presentation and after BPI raised its recommendation to 'accumulate' from 'hold'.

REE fell 0.49 to 34.58, leading the sessions losers, while Enagas rose 0.29 to 19.40.

Other utilities were mixed, with Iberdrola adding 0.10 to 36.14 after reporting a 7% rise in net energy production in the first quarter to March, Union Fenosa rising 0.20 to 42.30, while Gas Natural slipped 0.04 to 36.73.

Earlier, Spanish media reported core shareholder La Caixa has ruled out merging the gas group with Repsol YPF in the short term.

Repsol YPF rose 0.33 to 26.29 and Endesa rose 0.13 to 40.58.

Other leading bluechips were higher, with Telefonica adding 0.12 to 16.97, BBVA rising 0.04 to 18.34 and SCH gaining 0.03 to 13.80.

Penultimately in Europe we have Italy where Share prices closed higher, supported by the US macroeconomic data this afternoon, and led by Fondiaria-SAI on a broker comment, by Saipem on the higher oil price and by Fiat on strong European car registrations.

The Mibtel index finished up 0.62% at 33,480 and the S&P/Mib gained 0.61% to 43,016. Volume was an estimated 7.341  billion Eur.

Fondiaria-SAI rose 4.38% to 37.65 after CA Cheuvreux put the stock on its 'selected list', upping its price target to 50.0 Eur from 48.7, after yesterday's analyst meeting broadly confirmed its business plans.

Generali fell 0.60% to 33.15.

Mediolanum was up 1.63% to 6.38. Brokers pointed to the continued buying of shares by CEO Ennio Doris, adding that they do not rule out merger and acquisition activity by the fund manager.

Intesa Sanpaolo rose 0.51% to 5.885 ahead of tomorrow's business plan announcement, which is also expected to include a hefty dividend payment.

In the oil sector, Saipem rose 3.57% to 23.20. Brokers said the sector continues to benefit from strong capital spending by oil companies. There was a report it will build an LNG terminal in Italy.

Eni rose 0.90% to 24.69.

Fiat added 2.21% to 19.50 after confirming European market share gains in latest March car registration data this morning. UBS upped its Fiat price target to 24 Eur, from 20 on higher earnings estimates.

Telecom Italia rose 2.02% to 2.3975, putting on a spurt in late trading ahead of Monday's shareholder meeting and a decision on a revamped board, including a new chairman.

On the negative side, STMicro fell 0.83% to 15.02 after yesterday's gains on unconfirmed reports of a flash memory alliance with Intel.

Cements were mixed. Brokers said the sector has outperformed and is down on investors to other sectors, which have lagged the overall market.

Italcementi lost 0.60% to 23.21. Buzzi Unicem was up 0.94% to 23.72, well off its earlier lows.

Rounding off Europe this week we have last but by no means least Greece where Athens shares closed higher, led up by the solid performance and heavy trade in the National Bank of Greece and Hellenic Telecoms.

The ASE general index closed 1% higher at 4,808.4 with all major indices posting gains.

The blue chip index also climbed 1% higher to 2,573.4 while both mid-caps and small caps gained 0.5% to 6,063.1 and 923.9, respectively.

Advancers outnumbered decliners 150 to 100 while 66 remained unchanged in solid trading volume of roughly 408  million Eur.

Shares in the National Bank of Greece jumped 2.1% to 42.6 Eur in heavy trade after Credit Suisse named the stock as its top European bank pick.

Telecom incumbent OTE closed 2% higher at 21.66 Eur, also in very heavy trade, boosted by the positive market sentiment.

Betting technology Intralot led blue chip gainers, rising 4.3% to 24 Eur after broker Deutsche Bank reiterated its 'buy' rating and said that the risk to its Turkish business has been 'overplayed'.

Shares in Emporiki Bank dropped 2.1% to 21.06 after its price target price was cut to 22.4 Eur from 25 Eur at HSBC.

Luxury goods retailer Folli Follie led blue chip decliners for most of the session and closed 2.3% lower to 29 Eur, on profit taking.

Construction and wind energy player Terna closed 2% higher to 13.42 Eur after its coverage was initiated at Euroxx Securities with an 'overweight rating, given its solid track record and expansion plans.

UK Market - Leading shares ended firmer, at their highest close since September 2000, as strength in heavyweight pharmas and oil stocks added to M&A-inspired gains in confectionary giant Cadbury Schweppes.

By the close, the FTSE 100 index was up 46.0 points at 6,462, further lifted by a solid showing on Wall Street, and mirroring the positive wider market sentiment.

Final volume was fair, with 2.9  billion shares changing hands in 472,150 deals.

In London, shares in pharmaceuticals helped to underpin blue chip gains after US peer Merck & Co raised its full-year guidance last night by as much as 7%.

In response, SEB Enskilda said it views this as an indication that the pricing environment in key drug markets is better than originally assumed in company guidance.

AstraZeneca was the top riser, 69 pence higher at 2,820 and GlaxoSmithKline rose 34 at 1,467 in response.

Oil stocks also lent support as crude prices moved higher supported by refinery problems and falling gasoline inventories in the US ahead of the US driving season.

BP took on 13 at 576, Royal Dutch Shell rallied 39 at 1,737 and BG Group added 11 at 737-1/2.

On the M&A front, Cadbury Schweppes jumped 11 to 678, on news shares in Canadian drinks company Cott Corp have been suspended in the US and Toronto.

This morning the Wall Street Journal reported that Cott is talking with private-equity firms about joining its operations with Cadbury's beverage arm.

Cadbury's drinks business is expected to be valued at as much as 8  billion stg, when it is separated from Cadbury's candy bRands this summer.

J Sainsbury was also in demand, 11-1/2 ahead at 534 after property tycoon Robert Tchenguiz confirmed in an interview with The Daily Telegraph he wants the group's board to realise value from its portfolio of 750 supermarkets.

Tchenguiz was also critical of Sainsbury's board for not putting the CVC offer to shareholders and denied he had been supportive of the Sainsbury family's opposition to the bid.

Still on the high street, Alliance Boots added 9 at 1,059 on a report in Retail Week that Guy Hand's Terra Firma and Wellcome Trust are keen to team up with KKR and Pessina to bid for beauty and drugs retailer.

In financials, Barclays gained 5-1/2 at 743-1/2 on talk the UK bank is to scrap merger talks with Dutch rival ABN Amro, and will itself shortly receive an 850 pence per share takeover offer from JP Morgan of the US.

But, banking industry sources played down the prospect of a JP Morgan bid, saying: 'This deal would seem unlikely bearing in mind the strength of JP Morgan's debt business.'

Barclays has long been mooted as a takeover target for Bank of America.

And being a quiet Friday, market rumours returned that Diageo is mulling a bid for Scottish & Newcastle, although traders were sceptical and said it is more likely investors are trying to cover their losses.

S&N shares added 2 at 588, while Diageo slipped 8-1/2 at 1,034-1/2.

Still on the downside, Imperial Tobacco fell 29 to 2,262 after the Financial Times reported that buyout group CVC is now in advanced stages of forming a powerful financial consortium to trump the UK tobacco group's 12.3  billion stg bid for Altadis.

Peer British American Tobacco slipped in sympathy, down 2 at 1,592.

Elsewhere, miners fell into the red, as the recent rally in commodity prices appeared to run out of steam somewhat.

Xstrata was down 29 at 2,766, BHP eased 7 at 1,152, Anglo American lost 1 at 2,740, Rio Tinto eased 14 at 3,115 and Vedanta Resources was down 4 at 1,397.

US exposed stocks were also under pressure on the back of further weakness in the Dollar, with Rolls Royce off 7-1/4 at 490-3/4, Experian down 7 at 589 and ICAP off 4 at 521-3/4.

On the second tier, apart from mid-cap oil companies' gains, buyers came for retailer Woolworths, 1 firmer at 31-1/4, as takeover speculation citing Icelandic retail investor Baugur again did the rounds.

On the downside, Bunzl was 8 lower at 727-1/2 on the back of a Credit Suisse downgrade to 'neutral' from 'outperform'.

However, the broker increased the price target to 710 pence from 700 following the stock's strong rebound after a reassuring set of full-year 2006 results.

Japan & Asia Pacific - Shares across the Asia-Pacific region closed lower with markets waiting for corporate earnings releases and leads from the G7 finance ministers meeting this weekend, dealers said.

Tokyo shares closed lower after cautious trading during which investors refrained from buying as they awaited the earnings reports of leading companies here and in the US and the meeting at the weekend of the G7 finance ministers and central bankers.

A firmer Yen also dampened investors' buying appetite.

The Nikkei 225 Stock Average finished 176.47 points or 1.01% lower at 17,363.95, off the day's low of 17,327.37. Over the week, the index lost 0.69%.

The TOPIX index of all first-section issues declined 20.68 points or 1.2% to 1,705.50, off a low of 1,701.98. Over the week, the index fell 0.67%.

Hiroichi Nishi, equity chief at Nikko Cordial Securities, said: 'Although it is said that there is little chance that the Yen will be in focus at the G7 meeting, the Yen actually firmed today. So investors leaned toward to adopting a wait-and-see position.'

Investors are waiting for the corporate earnings reporting season here and in the US to get into full swing before they build up their positions, he said. The reporting of first-quarter earnings in the US will begin in earnest next week and the reporting of full-year earnings here begins the week after.

As major US high-tech companies will release their earnings reports next week, how shares in the US high-tech sector react to those earnings will give a lead to Japanese high-tech shares. Share prices in Japan are also likely to be influenced by US economic indicators due out next week.

Hong Kong shares were weaker in afternoon trade as property stocks succumbed to interest rate worries and investors awaited key inflation data in the US and the G7 meeting this weekend, dealers said.

At 3.20 pm the Hang Seng Index had lost 26.75 points or 0.13% at 20,353.46.

To Mainland China now where A-shares in Shanghai and Shenzhen closed lower on profit-taking after recent strong gains, with financial stocks and steelmakers losing ground.

The benchmark Shanghai Composite Index, which covers both A- and B-shares listed on the Shanghai Stock Exchange, closed down 12.76 points, or 0.36%, at 3,518.27, after moving between 3,504.16 and 3,563.86 points.

The key index rose 5.86% for the week. Turnover rose to 166.49  billion yuan, a new record, from 148.37  billion in the previous session.

The strong performance is likely to continue over the next week, as more companies issue their annual and quarterly results, most of which are believed to be stronger-than-market expectations.

The Shanghai A-share Index ended down 13.77 points or 0.37% at 3,698.45 on turnover of 165.57  billion yuan while the Shenzhen A-share Index finished down 0.32 points or 0.03% at 992.94 on turnover of 90.32  billion yuan.

The FTSE/Xinhua China A 50 Index was down 31.40 points at 12,465.17. The FTSE/Xinhua China A 200 Index was down 24.98 points at 9,057.82 and the FTSE/Xinhua China A 600 Index was down 24.54 points at 8,022.79.

Seoul shares closed lower but well off their lows as foreign investors continued to build positions in Samsung Electronics, which reported weaker-than-expected results for the first quarter.

Philippine shares dropped Friday as investors locked in profits ahead of May congressional polls and an initial public offering of reinsurer National Reinsurance.

The benchmark 30-company Philippine Stock Exchange Index shed 6.15 points, or 0.2%, at 3,216.07, adding to Thursday's 2.2% loss. The market had gained 4.8% in five sessions up to Wednesday.

Investors are just being selective ahead of the elections. Funds aren't moving out (of the market), just being shifted around.

The Peso rose to a new six-year high against the Dollar due to the general weakness of the greenback. The Dollar closed at 47.905, down from 47.95 on Thursday.

In India, the BSE Sensex closed at 13,113.81, down 69.43 points while broad-based Nifty settled at 3,829.85, a loss of 32.8 points.

The equity benchmark index opened weak at 13,127.86 backed by sustained selling pressure witnessed in frontline stocks across board. Later the index was range-bound and traded in a subdued manner in the mid intraday trades. Finally, the index after touching a low of 13,030.87 ended on a weak note. Banking stocks witnessed the brunt of selling pressure while cement, auto and pharma traded mixed.

The market breadth was negative. Out of the total 2,630 shares traded at the BSE, 1,090 advanced, 1,466 declined while 74 remained unchanged.

Among the sectoral indices, BSE Bankex declined 1.26%, BSE Auto declined 0.42% , BSE IT rose 1.49% and BSE Metal declined 2.24%.

Leaders on the index include; Bajaj Auto, which rose 3.03% to close at Rs 2,349.35, Infosys rose 2.57% to Rs 2,043.65 and Grasim rose 1.70% to finish at Rs 2,258.65. NTPC, Satyam and HLL are included in the gainers list.

The KOSPI index closed down 4.83 points or 0.32% at 1,520.78, off a low of 1,512.36 and a high of 1,526.09. The main board index gained 36.63 points for the week.

Indonesia shares edged up 0.6% to hit a new high of 1,941.52 points, led by gains in Bank Mandiri.

Malaysian shares climbed as property shares received a boost from relaxed industry regulations. The Kuala Lumpur Composite Index of 100 blue chips inched up 0.1% to 1,308.2 points.

Singapore shares closed flat amid improving sentiment among investors and prospects of good earnings reports by companies over the next few weeks. The Straits Times index inched up 0.9 point, or 0.03%, to 3,373.59.

Taiwan shares dropped, a day after investigators announced a probe into alleged insider trading activities by a leading high tech company. The Weighted Price Index of the Taiwan Stock Exchange fell 72.94 points, or 0.9%, to close at 8,002.26 in average volume.

In Thailand Thai markets were closed for the traditional calendar New Year holiday.

After soaring to record highs this week, the Australian stock market closed lower Friday weighed down by weaker Asian markets, falling commodity prices and a stronger Australian Dollar.

At the 1615 AEST close, the benchmark S&P/ASX200 index was down 22.5 points to 6135.7 while the all ordinaries lost 19 points to 6123.8.

On the Sydney Futures Exchange at 1622 AEST, the June share price index contract was down 40 points to 6167 on a volume of 18,387 contracts.

BHP Billiton relinquished 38 cents to $29.85 while Rio Tinto gave up $1.57 to $82.20.

Zinifex reversed 16 cents to $15.61, while oil and gas producer Woodside picked up 65 cents to $39.80 as the price of crude oil rose.

The star of the resources sector was market debutant and uranium explorer Crossland Uranium Mines, which gained 144% or 36 cents to 61 cents.

Crossland has teamed up with Canadian outfit Centram Exploration to explore for uranium in South Australia and the Northern Territory.

The retail sector was mixed with takeover target Coles easing one cent to $17.47, Harvey Norman shedding six cents to $4.96 and David Jones gave back six cents to $4.60.

But supermarket giant Woolworths improved 32 cents to $28.26.

New Zealand's sharemarket was virtually flat Friday, dragged lower by continued uncertainty about Telecom's regulatory outlook.

The NZSX-50 index closed down just 3.8 points or 0.09% to 4164.30. Total turnover was a moderate $121 million.

Telecom fell 13c to 474, after a near 4% surge yesterday on news the Government would reauction certain broadcast spectrum.

Elsewhere, Fletcher Building climbed 24c to 1148 on moderate volume after indicating it was looking at buying a business for between $700-$800 million within the next year.

Contact gained 5c to 905, Auckland Airport nosed up 3c to 243, and the Warehouse gained 2c to 717.

The Fisher & Paykel twins, Healthcare and Appliances, were up 2c to 368 and down 3c to 362 respectively, while Sky City inched up 2c to 470.

Commodities - Brent crude came close to touching the $70 a barrel mark on Friday on concerns this week about falling oil inventories in developed countries.

The International Energy Agency warned this week oil inventories may have fallen by 1m barrels in the first quarter for developed countries, the largest decline of its kind since 1996.

ICE Brent crude futures for May delivery gained 53 cents to $69.25 a barrel in late afternoon trade yesterday compared with its peak of $69.59. Brent prices rose more than 1% on the week.

The May contract expired at the close of trade on Friday night. The Brent June contract added 34 cents to $69.25.

May West Texas Intermediate added 8 cents to $63.93 a barrel in late morning trade on the New York Mercantile Exchange. WTI was relatively flat on the week. The gap between the Brent and WTI benchmark prices has grown to its widest ever, with Brent at one point this week trading at a premium of more than $6 a barrel.

The reason for the price difference lies with the local dynamics in the US crude market. The WTI contract is for crude that can be physically delivered at Cushing, a pipeline and storage hub in Oklahoma. Storage tanks in Cushing were full and dragged the WTI price lower.

Base metals had a strong week. The three-month copper price was quoted at $7,745 a tonne, down $55 on the day, but more than five% higher on the week. Copper touched a seven- month high of $7,955 during the week.

The three-month nickel price hit the $50,000-a-tonne level for the first time ever as stockpiles of the metal remain at less than a day’s worth of consumption.

The price gained $1,000 to $47,350 a tonne yesterday.

Lead also reached a record high of $2,035 a tonne during the week.

On Friday lead prices were up $12.5 at $1,992.5 but only $2 higher on the week. Declining stockpiles are also underpinning the lead price.

Since the start of the year all metal prices have been on the increase, including gold and platinum. Gold rose $4 to $679.30/$679.80 a troy ounce.

Wheat prices neared its maximum allowable rise of 30 cents yesterday after an official from the Canadian Wheat Board told Reuters in an interview that the country’s wheat exports in 2007-08 are likely to fall to around 16m tonnes from 19m in the current season as the country is expecting a lower crop.

Wheat futures for May delivery hit an intra-day high of $4.85 a bushel on Friday before easing to $4.76 on the Chicago Board of Trade, a gain of 18 cents on the day.

Currencies - The Euro rallied strongly this week as the Dollar was battered from all sides and expectations about global interest rates shifted.

Expectations of further monetary tightening supported the Euro and Sterling while the Dollar was stung by the growing perception that the next move in US interest rates will be lower.

US producer prices data on Friday added to this sentiment – core output prices were flat in March.

Wednesday’s minutes from the Federal Reserve’s last open market committee meeting contrasted with the hawkish language used this week by Jean-Claude Trichet, president of the European Central Bank.

The mixed tone of the Fed’s statement led economists to conclude that US interest rates will either be cut later in the year or stay on hold at 5.25% for the foreseeable future.

In a press conference after Thursday’s ECB policy meeting, at which Eurozone rates were left at 3.75%, Mr Trichet said the bank would monitor inflation risks and act in a “firm and timely manner”.

Although the central bank omitted the term “strong vigilance”, which indicates a rate increase at the next policy meeting, the language was hawkish enough to indicate a June rise at least.

The Fed is clearly on hold and could be lowering rates this year, while growth outside the US, particularly in Europe and the UK, gives a differing direction in monetary policy.

Tensions between the US and China also weighed on the Dollar this week after the US trade department complained to the World Trade Organisation over what was described as Beijing’s failure to protect intellectual property rights.

A “strongly displeased” Beijing subsequently declined Germany’s invitation to attend this weekend’s G7 meeting in Washington.

Selling pressure on the US currency sent the Euro to a two-year high of $1.3554 on Friday.

A late Dollar rally pushed the Euro back to $1.3509 but the single currency remained 1% higher on the week.

Sterling was also up on expectations of near-term rate rises as house price inflation picked up unexpectedly while robust consumer spending and strong wage growth lent support.

The Pound was up 0.8% over the week to $1.9818 against the Dollar. Against the Euro, Sterling fell 0.1% to £0.6812.

It was a week of contrasting fortunes for the Yen. The Japanese currency hit a succession of record lows against the Euro as speculators continued to trade on interest rate differentials.

“The carry trade is alive and well,” was the echo around dealing rooms and the Euro was further boosted on Friday after talk at the G7 meeting suggested there would be no new comments on foreign exchange rates.

Earlier in the week, the Japanese currency’s decline was temporarily stalled after both Mr Trichet and Rodrigo Rato, head of the International Monetary Fund, warned that the Yen was not a one-way bet.

Both said Japan’s economy was recovering and that the carry trade remained a risky strategy.

Over the week, however, the Euro rose 1.1% against the Yen, hitting a record Y161.45 on Friday.

With the Bank of Japan leaving interest rates on hold, the Yen is likely to continue sliding, led by domestic investors searching for yield.

But the Yen remained steady against the Dollar as yield-seeking traders shied away from US assets because of the uncertain economic picture.

Expect Dollar selling to continue into next week as interest rate and growth differentials continue to weigh on the greenback.

The Dollar fell 0.1% over the week to Y119.10 against the Yen.

South Africa's Rand slipped on Friday, knocked by concerns the buyout of fashion retailer Edcon may unravel and by Thursday's no-change decision on interest rates, but losses were capped by firm metal prices.

The Rand was trading at 7.2095 to the Dollar at 1520 GMT, 0.7% weaker than its previous New York close. It was also softer against the Euro at around 9.72 from 9.6027 late on Thursday.

The Australian Dollar surged ahead to close above the US83c level for the first time in almost 17 years as traders await new from this weekend's Group of Seven (G7) meeting. Friday, the domestic unit was trading at US83.23c, up sharply from Thursday's close of US82.57c.

New Zealand's Dollar has shot to an intra-day high of US73.58c Friday, sending shudders through Canterbury's already "lean" manufacturing base.

The Kiwi closed yesterday at US73.45c (from Thursday's 72.65), spiking on stronger than expected retail sales data, which bolstered the chances of another interest rate hike.

Weaker-than-expected Canadian trade surplus data on Friday put the only blemish on an otherwise stellar week for the Canadian Dollar, which closed lower on the day but just shy of a 4-1/2 month high versus the US currency.

The Canadian Dollar closed at C$1.1370 to the US Dollar, or 87.95 US cents, down from C$1.1345 to the US Dollar, or 88.14 US cents, at Thursday's close.

The Hong Kong Dollar strengthened on the day yesterday, likely fueled by Dollar declines ahead of the weekend.  Notably, the underlying currency retraced from previous profit taking in the New York afternoon yesterday, trading at 7.8134 currently.

The Singapore Dollar also gained some steam ahead of the weekend close as retail sales growth accelerated to a 3 year high. The domestic currency was boosted, as a result, helping the SGD to test higher at the 1.5140 figure before paring back on short term profit taking.

And as always, closing currencies this week with the RMB where it finished at 7.7217 to the Dollar on the over-the-counter (OTC) market Friday, compared with a close of 7.7260 Thursday.

China - China's foreign reserves, already the world's largest, have risen past $1.2 trillion, a state news agency said Thursday, amid surging trade and plans to create a multibillion-Dollar company to invest some of the stockpile.

The figure, as of the end of March, represented a 37.4% rise over the same period last year, the Xinhua News Agency said, citing the central bank.

China's reserves have risen rapidly as huge trade surpluses and foreign investment force Beijing to drain billions of Dollars from the economy every month through bond sales to hold down pressure for prices to rise. The money is stockpiled in US Treasury bonds and other foreign assets.

The government announced last month it will create a multibillion-Dollar company to invest a portion of the reserves in hopes of making more profitable use of the money.

No details of the company's size, when it will be launched or how it will make investments have been released. But economists say Beijing might allocate as much as $200 billion to $400 billion to the venture.

Figures released this week showed China's trade surplus for the first three months of the year doubled from the same period of 2006, reaching $46 billion.

China received $15.9 billion in foreign investment in that January-to-March quarter, an 11.6% increase over the same period in 2006, according to the government.

Economists say the rising reserves are a sign not of financial strength but of China's failure to balance flows of money into and out of the economy.

While investment and export revenues are pouring in, Beijing tightly controls the outflow of money, restricting outward investment by Chinese companies. Most companies and individuals need official permission to buy more than a small amount of foreign currency.

The government has been easing restrictions for approval of foreign investments and allowing banks and insurance companies to buy more foreign stocks and bonds.

Beijing also is trying to encourage its consumers to spend more, which would raise imports, narrowing the trade surplus.

Japan has the world's second-largest reserves, which stood at $909 billion as of the end of March.

The composition of China's foreign currency reserves is a secret. But as much as 75% is believed to be in US Dollar-denominated instruments, mostly Treasuries, with the rest in Euros and a small amount in Yen.

Finance Minister Jin Renqing said last month that Beijing would try to learn from the experience of other governments in creating its investment company.

Jin cited the example of Singapore's government-owned Temasek Holdings, which has $89 billion in investments in banks, real estate, shipping, energy and other industries in Singapore, India, China, South Korea and elsewhere.

China's current foreign holdings are believed to be earning a profit of about 3% a year, while Temasek says it averages an 18% annual return.