US Markets - Wall Street ended an extraordinary and record-setting week Friday by surging higher again, sending the Standard & Poor's 500 index past a trading high set in March 2000 and thrusting the Dow Jones industrial past 13,900 for the first time.

Both the S&P and the Dow logged record closes for the second straight day and the Dow's gains put the blue chip index within about 70 points of 14,000. But the technology-laden Nasdaq composite index lagged both in Friday's session and in the broader recovery from the dot-com collapse at the start of the decade.

In a week that saw the Dow swing more than 450 points and rise 283 points in Thursday's session alone, investors grappled with unease over soured subprime loans and the broader economy before casting off such concerns and pushing higher amid signs the consumer might yet again pull through and give Wall Street reason to climb higher.

The Dow rose 44.30, or 0.32%, to 13,906.03 after reaching a new trading high of 13,932.29.

Broader stock indicators also advanced. The Standard & Poor's 500 index rose 4.64, or 0.30%, to 1,552.34. The index late in Friday's session set a fresh trading high of 1,555.10, topping a previous record of 1,553.11 set in March 2000.

The Nasdaq composite index gained 5.27, or 0.20%, to 2,707.00 after spending much of the session moderately lower. Though the Nasdaq was trading at levels not seen since early 2001, the index remains well short of its closing record of 5,048.62, set in March 2000 when it was bloated by the late 1990s tech boom.

In spite of weaker than forecast national retail sales for June on Friday, much better-than-expected same store sales at major retailers on Thursday lifted some of the gloom that has pervaded the sector.

While the Nasdaq lagged, Google and Apple both set new all-time highs on Friday. Google had risen 1.1% to $551.11 at mid-afternoon, down from a peak of $552.67, while Apple was up 1.1% at $135.53, after making a new high of $135.84.

Setting the pace this week was the Dow with a gain of 2.1%. At mid-afternoon, the Dow was 0.3% higher at 13,899.69, after setting a fresh record high of 13,910.26.

With the pace of the second-quarter earnings season set to pick up sharply next week, two bluechips, Alcoa and General Electric, have already delivered results in line with estimates.

Along with Exxon Mobil, boosted by higher oil prices at 11-month highs, these three Dow stocks set new 52-week highs on Friday. Exxon rose 4.9% to $90.70 this week and set a high of $90.80, as the world’s most valuable publicly traded company’s market capitalisation exceeded $500bn.

At mid-afternoon, Alcoa was 13.2% higher at $47.15 for the week.

Alcoa withdrew its bid for Alcan late on Thursday and announced the resumption of a stock buy-back program that had been halted when the bid for Alcan was made on May 7. Analysts also believe that BHP Billiton may soon launch a bid for Alcoa now that Rio Tinto has made an agreed $44bn bid for Alcan. Alcan rallied 12.8% to $97.59 this week and has more than doubled in value this year.  In other deal news, Gerdau Ameristeel said it was buying Chaparral Steel for $4.22bn. Chaparral rose 10.7% to $83.83.

Huntsman, the chemicals maker, agreed to be bought for $6.5bn by Apollo Management’s Hexion Specialty Chemicals. That trumped a $5.6bn bid by Basell.

Huntsman fell 5.2% to $26.54. On Friday, Energizer agreed to buy Playtex, the maker of feminine care and infant products, for about $1.2bn. Energizer was up 7.7% at $107.86, while Playtex surged 20.9% to $17.98 this week.

In contrast, GE and Abbott Laboratories announced that they were unable to agree on “final terms and conditions” of GE’s proposed $8.13bn deal to buy Abbott’s primary in-vitro and point-of-care diagnostics units. Abbott fell 1.1% to $53.43.

There was also uncertainty over the planned $25bn buy-out of Sallie Mae. Shares in the student lender plunged nearly 10% on Wednesday, when some of the Wall Street firms involved in the deal said they might back out due to proposed legislation regulating student loans. Sallie was down 7.4% for the week at $53.63.

Profit warnings from retailers such as Home Depot and Sears, down 10.1% to $156.40, sparked worries that the US consumer was starting to slow.

Go figure that one out - slow or what?

European Markets - European stock markets hit a new six-and-a-half year high on Friday following the record close on Wall Street.

A 2.1% gain for the Dow Jones Industrial Average drove the FTSE Eurofirst 300 to 1,635.58, its highest level since November 2000, while Germany's Dax Index set a new high of 8,151.57.

So let's go straight to Frankfurt where Germany ’s DAX index on Friday added to the steady gains it has been making over the year to touch a record high in early trading. But Germamy's streak as Europe's leading major stock market so far in 2007 could wane towards the end of the year as investors shift to the financial and telecom sectors in other parts of the continent.

The index rose to 8,151.57 on Friday, well above a previous record of 8,136.16 that it reached seven years ago, before slipping back to 8,095.03 , 41.60 points or 0.5% above Thursday’s close.

A spokesman for Chancellor Angela Merkel welcomed the news, saying that it "makes clear that business in Germany is flourishing, and that there is a very steady upswing."

The yield on German government 10-year bonds was up to 4.64% from 4.58% as the price fell, while British gilts rose to 5.50%, to 5.47%. Although rising interest rates are often a negative for stocks, the current movements seem more indicative of money flowing out of the credit markets and into equities.

There were some strong individual performances among German stocks, including from BASF, which was up 1.25 Euros, or 1.3%, at 98.37 Euros, but there was no obvious trigger for the cross-the-board gain.

The DAX has been a strong performer over the last two years. The German equity gauge has had some strong performances by exporters to Asia and the Middle East, and even to the United States, despite the strong Euro, due to attractive pricing systems that have kept demand alive.

German companies have also posted strong earnings figures, following efforts to cut costs. Meanwhile, tightness in the labor market and strong consumer confidence, particularly compared with other markets such as the United States, have made domestically oriented German stocks among the most attractive.

But don’t expect the DAX to continue as the European leader. Many of Germany's largest companies, are industrial manufacturers, automakers, and chemical and transportation companies, which operate in cyclical industries, and could see their stocks slow down in the second half of the year, as investors shift to the financial, telecommunications and pharmaceutical sectors.

On Friday in Frankfurt, Financial stocks were also a bright feature, with Hypo Real Estate advancing 0.86 Eur or 1.74% to 50.34 Eur and Deutsche Bank advancing 1.56 Eur or 1.47% to 107.47 Eur, rallying from recent losses caused by pressure on the financial sector.

Allianz was 2.08 Eur or 1.22% higher at 173.03 Eur after UBS reiterated its 'buy' stance on the insurer and its 217 Eur per share price target saying that the company is well positioned to penetrate the Russian, Indian and other markets.

SAP rose 0.39 Eur or 1.04% to 37.85 Eur, with some traders pointing to a positive broker note from Dresdner Kleinwort and others saying that persistent rumours that the software manufacturer might raise its guidance were continuing to buoy the shares.

SAP is scheduled to release its second-quater figures on July 19.

Utilities E.ON and RWE were up 1.11 Eur or 0.90% at 124.54 Eur and 0.70 Eur or 0.86% at 81.85 Eur, respectively.

At the other end, Fresenius Medical Care lost 0.59 Eur or 1.75% to 33.21 Eur as the sharpest decliner.

Shares in Lufthansa were 0.17 Eur or 0.82% lower at 20.56 Eur as the airline's profits are seen being hit by a strong Euro and high oil prices.

DaimlerChrysler eased 0.59 Eur or 0.85% to 68.75 Eur.

Over on the MDAX, MLP advanced 0.82 Eur or 5.40% to 16.00 Eur on persistent rumours that AXA might be thinking about bidding for the financial service provider, while analysts discarded the speculation as unfounded.

MTU Aero Engines added 0.62 Eur or 1.29% to 48.70 Eur after Deutsche Bank raised its price target to 55 Eur per share from 51 and reiterated its 'buy' rating.

At the other end of the index, Deutz slumped 0.31 Eur or 3.13% to 9.60 Eur.

Over on the TecDAX, GPC Biotech added 1.54 Eur or 7.23% to 22.85 Eur after Goldman Sachs placed the stock on its 'conviction buy list.'

At the other end, Bechtle shed 0.83 Eur or 2.97% to 27.14 Eur

Into France now where in Paris Share prices closed slightly higher, holding on to Thursday's 100-point gains, helped by a fresh high on the Dow Jones industrials in New York, although L'Oreal fell sharply as the market was disappointed that its second-quarter sales were only in-line.

The CAC-40 index finished up 14.91 points or 0.24% at 6,117.96.

Among CAC-40 stocks, 26 closed higher and 14 closed lower. On the Matif, July CAC-40 futures were trading at 6,124.50.

On the broader indices, the SBF-80 index closed up 23.90 or 0.33% at 7,330.49 and the SBF-120 ended 11.37 or 0.26% higher at 4,460.11.

Property and financial stocks figured among the main risers as fears over subprime home loans in the US continued to ease.

Insurance group Axa -- up 0.60 Eur or 1.87% at 32.64 -- and property group Unibail-Rodamco -- up 3.35 or 1.80% at 189.60 -- were the biggest CAC climbers at the close.

Credit Agricole led gains among banks, adding 0.29 or 0.99% to 29.72. Fitch Ratings' announced ratings for Credit Agricole of long-term issuer default 'AA', short-term IDR 'F1+', individual 'B' and support '1'.

In contrast, cosmetics giant L'Oreal plunged 3.68 or 4.15% to 85.06. Although it reported like-for-like sales growth of 7.4% for the second quarter, analysts had been expecting as much as 8.5%, according to Exane BNP Paribas, which said regional data contributed to its disappointment by falling short of hopes.

UBS reiterated its 'buy' recommendation but made note of 'short-term pressures' due to slower-than-expected growth in North America and a 'difficult' outlook for first half margins.

Capgemini was down 0.94 or 1.67% at 55.27 as speculation subsided about a possible takeover bid from Indian IT giant Infosys.

Capgemini was also cited by sources as one of the parties interested in a tie-up with Deutsche Telekom's T-Systems unit.

But speculation centred on a move by Atos Origin -- down 0.12 or 0.25% at 47.53 -- to join forces with T-Systems, although Atos declined to comment.

Danone was another significant faller, shedding 1.98 or 3.36% to 57.02 as it saw renewed profit-taking following its 12.3  billion Eur bid for baby food maker Numico, announced on Monday.

Back on the upside, Schneider Electric extended its gains -- adding 1.56 or 1.51% to 104.77 -- following an upgrade to 'buy' from 'hold' at Citigroup. The broker said the group's fundamentals remain strong and it is a leader in the energy efficiency area.

Earlier this week, Schneider shares made gains after an EU court ruled it should be compensated for having a planned merger with Legrand illegally blocked by the European Commission.

Market heavyweight Total helped keep the CAC in positive territory by rising 0.67 or 1.07% to 63.05.

Following yesterday's announcement that it has been chosen by Gazprom to jointly develop the Shtokman gas field, Total said it will invest 4-5  billion Eur in the project.

Analysts welcomed the move, with one Paris-based analyst stressing that 'strategically, the company is participating in the largest gas deal in the world.'

Elsewhere, SEB fell 4.94 or 3.47% to 137.35 as analysts predicted the kitchen equipment maker will have to modify its plans for the 240  million Eur acquisition of a majority stake in China's Zhejiang Supor Cookware Co Ltd.

Across in The Netherlands Amsterdam shares closed slightly higher, with all eyes on ABN Amro after the Dutch Supreme Court okayed its sale of LaSalle.

The AEX closed up 0.79 point or 0.14% at 560.93, after opening at 563.47 and trading in a range of 560.87-563.98.

Reed Elsevier led the AEX in high volume, rising 2.40% to 14.53 on rumours the company could soon be selling what is left of its education operations for a higher-than-expected price.

Unibail-Rodamco put on 1.81% to 189.89 and TomTom lifted 1.99% to 42.55 after a price target upgrade at UBS.

ASML was up 1.66% at 20.82 Eur, boosted by Samsung's bullish second half forecast, while fellow tech stock Philips fell 1.76% to 32.41 ahead of its second quarter results expected monday.

All eyes were on on ABN Amro, up 1.47% at 35.85 Eur, after the Dutch Supreme Court's ruled the bank may press on with its sale of LaSalle to Bank of America, which had been blocked by a lower court. The decision is seen as an indication that a takeover of ABN Amro by Barclays is more likely to succeed than rival efforts.

Fortis, part of a consortium interested in buying ABN Amro with LaSalle, went 0.55% higher to 31.22, while ING rose 0.83% at 32.92, and Aegon added 0.78% at 14.30.

Corio led midcappers, up 1.59% at 57.68, followed by Tele Atlas, adding 1.15% to 16.69.

Local issue Pharming rose 5.65% to 3.18 Eur after the company announced that the production facilities used to manufacture its lead product Rhucin have been approved by the European Medicines Evaluation Agency (EMEA).

Oils were lower amid news the IEA trimmed down its global forecast for oil product demand growth. SBM Offshore fell 1.46% to 29.67 and Royal Dutch Shell slid 1.04% to 30.57. Fugro was the exception, turning higher midafternoon to close 0.24% higher at 50.52

Arcelor-Mittal lost 1.10% to 48.61 and Akzo Nobel slipped 0.95% to 63.47.

On the midcap index, Aalberts Industries went 1.29% lower to 21.45 and Stork lost 0.35% to 48.0 amid news Deutsche Bank reduced its stake in the company to just over 1% from over 11%.

Across in Brussels, Belgian Shares closed modestly higher, with speciality materials group Umicore leading the blue-chips.

At the close, the Bel 20 was up 8.51 points or 0.18% at 4,645.08.

Umicore was up 1.92 Eur or 1.10% at 176.50 Eur. Investment group Ackermans & van Haaren was up 0.70 Eur or 0.96% at 73.24 Eur.

For the heavyweight financials, Fortis was up 0.21 Eur or 0.68% at 31.23 Eur, KBC Group was up 0.64 Eur or 0.65% at 99.84 Eur and Dexia was up 0.09 Eur or 0.39% at 23.26 Eur.

For the fallers, mobile telecoms group Mobistar was down 0.54 Eur or 0.85% at 62.86 Eur and imaging technology group Agfa-Gevaert was down 0.15 Eur or 0.77% at 19.37 Eur.

UCB was down 0.23 Eur or 0.55% at 41.25 Eur. The pharmaceutical group said it has launched a minority buyout offer for its 87.6%-owned German unit Schwarz Pharma.

UCB said the terms of the buyout have been registered in the German commercial register and that shareholders of Schwarz Pharma will be informed 'within the next few days' of steps to be taken concerning a compensation offer of 104.60 Eur per Schwarz Pharma share.

Brewer InBev slipped 0.32 Eur or 0.54% to 59.19 Eur and supermarket group Delhaize was down 0.16 Eur or 0.22% at 73.36 Eur.

Utility Suez was down 0.02 Eur or 0.05% at 41.76 Eur. French prime minister Francois Fillon said there was 'no urgency' to take a decision on the planned merger between state-owned Gaz de France and the utility.

Outside the Bel 20, Cumerio was up 0.01 Eur or 0.03% at 30.00 Eur. German copper group Norddeutsche Affinerie (NA) said the group's proposed merger with the Belgian peer is 'by far the best deal' for the industry.

The group said the merger would also be the 'best deal' to 'preserve' the long-term employment prospects for the employees.

The response comes after A-TEC Industries majority shareholder Mirko Kovats told Belgian newspapers De Tijd, L'Echo and De Standaard that a merger between NA and Cumerio under present conditions is 'impossible'.

He said he has no plans to reduce his current stake and also did not rule out the possibility that he would increase his shareholding in Cumerio.

Shares in EVS soared 7.39 Eur or 11.97% to 69.14 Eur in opening deals after the broadcast equipment group posted a positive trading update yesterday after the market closed.

In Switzerland , Zurich Share prices closed slightly higher, tracking gains on Wall Street and on other European markets with gains in financials more than offsetting weakness in heavyweights Novartis and Nestle.

At the close, the Swiss Market Index was up 13.23 points at 9,261.74, and the Swiss Performance Index was 8.87 points higher at 7,574.38.

The Euro was lower against the Swiss franc, at 1.6576 SFr, while the Dollar eased to 1.2020 SFr.

The SMI handed back some gains and ended off intra-day highs after the release of US data including June retail sales which were down 0.9% from a year earlier, and import prices which rose 1.0% in June on the month.

Luxury goods stocks led the blue chips, with Swatch 10 SFr or 2.9% higher at 360 SFr and Richemont adding 1.35 SFr or 1.4% to 76.9 SFr, following several price target hikes ahead of the group's scheduled release of its first quarter sales figures next Tuesday.

A Bank Vontobel analyst said he anticipates an increase of 13% in Richemont's organic sales growth.

Banks outperformed with Julius Baer the second biggest climber, up 2.3 SFr or 2.6% at 90 SFr, Credit Suisse up 0.9 SFr or 1.0% at 89.4 SFr, and UBS gaining 0.65 SFr to 73.7 SFr.

Elsewhere among insurers, Baloise rose 0.8 SFr to 119.8 SFr, Zurich Financial was up 1.25 SFr at 376.25 SFr, while Swiss Re was little changed, up 0.1 SFr at 109.2 SFr.

Pharmaceuticals were mixed with Roche reversing earlier losses, up 0.4 SFr at 216.6 SFr.

Peer Novartis was today's top faller, down 0.85 sr or 1.3% at 66 SFr, ahead of second quarter results Tuesday, and as investors question the drugmaker's pipeline, followed by ABB, off 0.2 SFr at 29.7 SFr and Holcim, off 0.7 SFr at 136.1 SFr, both hit by profit-taking.

Earlier, the cement maker said it will raise its offer to minority shareholders of St Lawrence Cement Group to 43.50 cad in cash per share taking the total value of the revised offer to 681  million cad. The offer has been extended to July 30.

Elsewhere in healthcare, Nobel Biocare handed back recent gains, down 1.25 SFr at 406 SFr.

SGS was also lower by 7.0 SFr at 1,511, in jitters ahead of first half results Monday.

Nestle shed 0.5 SFr to 480.5 SFr on profit-taking.

Outside the SMI, EMS Chemie was 1.7 SFr higher at 165.7 SFr.

Earlier, the group reported a 10.9% EBIT rise to 134  million SFr in the six months through June as well as a sales increase of 10.8% to 783  million SFr.

Looking ahead, EMS Chemie said it is confident of increasing net sales and EBIT by an upper single-digit% amount while further improving margins by the end of the year.

Von Roll ended flat at 11.55 SFr after saying earlier today it has acquired US-based John C Dolph Company for an undisclosed sum.

The acquisition will significantly expand Von Roll's product portfolio of insulating resins and varnishes and increase its market position in the US, Asia and Europe, the group said.

Barry Callebaut shed 5 SFr to 890 SFr, on profit-taking after saying earlier today it will enter the Indian chocolate market by opening a sales office in Mumbai in September.

The entry into the Indian market will allow Barry Callebaut to capture the promising growth potential of the region's chocolate market and is in line with its strategy to expand its presence in fast-growing emerging markets, the group said.

New to the European review this week, I give you Austria where in Vienna Shares closed marginally higher, supported by heavyweight Telekom Austria but weighed by profit taking in OMV and voestalpine.

The ATX closed up 0.16% or 7.89 points at 4,926.07. The ATX Prime closed up 0.38% or 9.24 points at 2,458.07.

The Eur was trading at 1.3782 usd, compared with 1.3767 at the same time yesterday.

Trading volumes in Telekom Austria returned to more average levels after several days of very heavy volume following a revised EBITDA forecast for 2007-10 on Tuesday. The telecom share closed up 3.17% at 19.20 Eur.

Steel company voestalpine led the decliners for most of the day before recovering some ground at the close. It last dealt down 0.48% at 65.79 Eur, lower on profit taking.

OMV retreated 0.94% in average volumes to 48.49 Eur.

Oesterreichische Post gained for the fifth day after the EU parliament ruled to postpone the Europe-wide liberalisation of the postal markets to 2011. Post closed up 0.94% at 35.48 Eur having added around 7% to its value since the start of the week.

Engineering major Andritz rose 1.89% to 54 Eur, investor interest largely boosted by its roadshow in Frankfurt this week.

Shares in Flughafen Wien continued to rise after the airport posted strong passenger growth for June on Thursday. It added 1.01% to 75.15 Eur at the close.

Shares in Intercell shed 0.35% to 28.15 Eur after analysts at Goldman Sachs cut their rating on the vaccine company's stock to 'sell' from 'neutral' on valuation grounds.

Lower on profit taking, shares in Wienerberger dropped 1.21% to 53.25 Eur. Earlier the brick and tile manufacturer said that Capital Group International has raised its stake to 6.42%.

The domestic banks moved in mixed directions. Erste Bank lost 0.64% to 57.11 Eur, while Raiffeisen International won 1.22% to 120 Eur.

Elsewhere, on the ATX Prime shares in property investment company CA Immo continued to climb, adding 2.65% to 14.34 Eur on the back of bullish initial coverage notes by Deutsche Bank and Oppenheim Thursday.

Into Scandinavia now and starting this week with Finland where Helsinki Shares closed higher, with investors continuing to buy into Nokia in anticipation of a solid set of second-quarter results from the handset maker next month.

The OMX Helsinki 25 ended 0.91% higher at 3,379.03 and the OMX Helsinki index up 0.88% at 11,807.11. Turnover was about 1.7  billion Eur.

Nokia retreated from session highs, but still posted a 0.93% gain to finish at 21.76 Eur. Confidence grew further today ahead of Nokia's August 2 report after rival Samsung revealed weaker-than-expected market share gains for April-June. That followed Motorola's profit-warning earlier this week, which indicated the US group has ceded ground to rivals.

Danske Equities repeated its 'buy' rating and 24.5 Eur price target on Nokia, while ING maintained its 'hold' stance saying it stills prefers Ericsson.

Dresdner has reiterated its 'sell' recommendation.

Among other blue chip advancers, UPM-Kymmene rose 0.82% to 18.55 Eur, Stora Enso 1.74% to 14.07 Eur, Outokumpu 2.54% to 24.66 Eur and Rautaruukki 1.86% to 52.04 Eur.

However, Konecranes gave up 2.51% to finish at 33.45 Eur after a rally Thursday.

Neste Oil, down 0.53% to 28.25 Eur, and Kesko, off 0.62% to 49.79 Eur, were also among the handful of heavyweight fallers.

In Sweden Stockholm shares closed slightly higher, with aerospace and defence group Saab sharply outperforming after its better-than-expected H1 results.

The OMX Stockholm index closed up 0.13% at 426.08, while the OMX Stockholm 30 index ended 0.11% higher at 1,308.76. Turnover was 19.59  billion SKr.

The main sector movers were technology hardware and equipment, which closed down 0.70%; materials, up 0.44%; and banks, 1.10% higher.

The major movers within these sectors included Ericsson B, down 0.78% at 28.16 SKr bid; SSAB A, up 1.290% at 315; and Swedbank A, up 1.59% at 256.

Saab B closed up 5.51% at 191.50. Saab beat expectations both at the sales and pretax level, and the company's CEO painted a bullish picture at the report presentation, saying interest in the company's JAS Gripen fighter has never been greater, and that a string of countries are set to request bids for the plane.

Betsson closed up 7.92% at 64.75. Carnegie initiated coverage with an 'outperform' rating.

Neighbours Denmark also fared well Friday with Copenhagen Share prices closing higher, but off the mornings highs, led up by shipping stocks AP Moller-Maersk and DS Norden after overnight gains among Asian peers.

The OMXC20 index closed 2.46 points higher at 505.66 and the OMXCB Benchmark index added 1.95 points to 485.07.

The OMXC All Share index closed 1.57 points higher at 495.03 on turnover of 4.23  billion DKr.

AP Moller-Maersk A closed 700 DKr higher at 72,000 and the B-shares rose 700 to 73,700, while DS Norden added 6 to 421, lifted by the overnight gains for Asian shipping peers and reports of higher freight rates.

DS Torm fell 1 to 225, while DSV rose 2.75 to 120.75.

Novo Nordisk  B was up 2 at 595. Goldman Sachs has raised its target price for the stock to 570 DKr from 550 on a reiterated 'sell' stance.

Lundbeck rose 0.75 to 141.75 following a raised target price to 135 DKr from 130 at Goldman Sachs, which retained its 'neutral' stance on the stock. Goldman cut the target price to 130 DKr from 160 in March.

ALK-Abello B was 5 higher at 1,167. Jyske Bank reiterated its 'buy' on the stock, with a target of 1,873 DKr a share, as it sees a 60% upside potential.

The bank is more positive than the market to the group's Grazax grass pollen allergy treatment and its partnership agreement with Schering-Plough. An increasingly positive newsflow over the coming six months should lift the share price further, the bank said.

Coloplast added 1 to 456.

Carlsberg B shed 1 to 694. Citing the Indian daily Economic Times, newswire Direkt said Anheuser-Busch is aiming for a 5% market share in India within five years through an increase in local production.

Danisco was up 0.5 at 419.5. The group has developed new emulsifier solutions to help food manufacturers cut down on expensive raw materials, absorb higher costs in the form of price increases for commodities such as wheat, gluten and vegetable oils, and limit the price rises passed on to consumers.

Novozymes fell 4 to 672.

GN Store Nord rose 0.25 to 66.75. Dealers said comments by Phonak Holding CEO Valentin Chapero in tomorrow's Stocks magazine might indicate the group is getting cold feet over its acquisition of GN Store Nord's Resound unit.

Chapero said his group could initiate a share buyback as one way to use its cash if the acquisition falls through.

In April, the German Federal Cartel Office blocked the takeover, saying it would lead to Phonak, Siemens and William Demant Holding dominating the local market. The matter goes to an appeal court in Duesseldorf on Aug 1.

William Demant added 1 to 544 and Vestas Wind Systems was 3 higher at 376.5.

NKT Holding was 5 lower at 593 after rising sharply yesterday, when its 51% owned NKT Flexibles unit received a letter of intent worth about 635  million NKr from Statoil.

FLSmidth was up 9.5 at 466 and Danske Bank rose 0.5 to 235.25, while Topdanmark was 14 lower at 909 and TrygVesta shed 2 to 426.

Rounding out Nordic climes this week we go to Oslo where Norway 's market closed higher, led up by Acergy after yesterday's 635  million NKr order received by its part-owned unit NKT Flexibles, and by Renewable Energy Corporation (REC) on positive analyst comments, while Tomra Systems and TGS-NOPEC Geophysical fell on disappointing earnings news.

The OSEBX Benchmark index closed 1.50 points higher at 519.69 and the OSEAX All Share index rose 2.51 points to 601.47.

Total turnover amounted to 14.73  billion NKr.

Acergy closed 5.25 NKr higher at 158.5. NKT Flexibles, where it owns 49%, yesterday received a letter of intent worth about 635  million NKr from Statoil. The group's recent second-quarter earnings and raised sales guidance resulted yesterday in Lehman upping its target on the stock to 26.5 usd from 25.5 on a reiterated 'overweight' stance, while SG Securities upgraded the stock to 'buy' from 'hold' with a 170 NKr target.

Statoil rose 0.25 to 191.5. Analysts in Moscow think there is a good chance StatoilHydro will be awarded the remaining 24% stake in the Shtokman operating company, daily Dagens Naeringsliv said.

Norsk Hydro added 3 to 246. According to Carnegie, Hydro's investor relations director said the firm 'is highly involved in the current industry consolidation talks', but declined to say who with.

TGS-NOPEC fell 9 to 115 after it warned that delays to key projects were likely to hit its full-year results, and that it is now expecting 2007 sales growth of 15-20%, down from the 20-25% figures given in previous guidance.

Frontline fell 3 to 301 after the stock was cut to 'reduce' from 'neutral' at UBS.

Petroleum Geo-Services was down 1.25 at 152.5, while Seadrill added 0.25 to 126.5.

Renewable Energy was up 3.5 at 235.5. The company could be the best share in the Nordic solar segment in the second half of this year, Esbjorn Lundevall, head of analysis at SEB, told the online version of Swedish business weekly Affaersvaerlden.

Aker Kvaerner rose 3.75 to 158 as yesterday's announcement regarding the development of the Shtokman gas field put the Norwegian engineering firm back in the spotlight.

Aker Yards fell 2.25 to 73.25. The group's subsidiary, Aker Oilfield Services, said it has decided to fast-track the construction and delivery of the first two of its recently-ordered oilfield vessels after winning long-term charter contracts from Norwegian peer DOF Subsea. No financial details were given on the contract wins.

DOF Subsea was up 1 at 57.25.

Tomra Systems fell 6.8 to 47 on renewed concerns about the firm's outlook following second-quarter results which came in largely in-line with expectations, dealers said.

Following the market close last night Tomra posted operating profits of 111  million NKr for the quarter, marginally below the 113  million consensus forecast, on sales of 887  million, slightly up on the 870  million forecast.

Despite the in-line results, analysts said concerns about the firm's prospects were hitting its shares, particularly due to delays to a key Tesco contract and a lower number of machines delivered to the important German market.

Down to the Mediterranean now and starting this week in Athens where Greek shares closed sharply higher, as the domestic market far outperformed peer European bourses on the positive market sentiment and as investor trading was driven by acquisition news in the local market.

The ASE general index spiked 1.6% to 5,104.2, while blue chips gained 1.7% to 2,722.1. Mid caps jumped 1.8% to 6,662.2 and small caps edged 0.2% higher to 1,196.3.

Advancers outnumbered decliners 171 to 100, while 42 were unchanged. Turnover was a weighty 556  million Eur.

Leading foods group Vivartia closed 1.6% higher at 18.4 Eur after its trading was suspended on rumours Marfin Investment Group would acquire a 30% controlling stake in the company. Vivartia and MIG jointly confirmed the deal right before the close of trade, saying their companies shares will resume trade on Monday and that the transaction will go through at the start of trade.

Betting technology company Intralot led blue chip gainers throughout most of the session. It was up 4.3% to 25.2 Eur on press reports saying it is close to finalizing a deal with OPAP for IT terminals and services.

Metals and engineering company Mytilineos gained 3.1% to 38.5 Eur. The company is considering building a third power plant in Greece, along with Endesa, reports on Euro2day.gr NewsWire said.

Refiner Hellenic Petroleum grew just 0.3% to 11.74 Eur, off sharp gains from earlier in the session. Yesterday it announced a joint venture with Edison and unconfirmed press reports today said that it may cut operating rates due to lower refining margins at its Elefsina plant.

Electricity utility Public Power Corp closed 2% higher at 22.78 Eur. Unconfirmed reports say it is close to signing a three-year contract with GEK and Terna joint venture Heron to use its 147 MW plant to cover extra electricity demands.

Construction and energy holding company GEK ended 1.1% higher at 14.06 Eur, while Terna stacked on 1.1% to 13.74 Eur on the same news.

Real estate company Lamda Development edged a mere 0.2% higher to 15.5 Eur. It announced a pre-sale agreement for a 10,000 sq meter plot of land in Bucharest for 4.7  million Eur.

Neighbours Italy saw Milan Share prices close higher, with Intesa Sanpaolo and other financials leading the advance among blue chips, while Tiscali rallied after announcing the acquisition of the broadband and voice operations of the UK company Pipex.

The Mibtel index rose 0.25% to 33,248 and the blue chip S&P/Mib index added 0.36% to 42,293, while volumes rose to 5.43  billion Eur from 5.17  billion.

Gainers outnumbered decliners 193 to 142, while nine shares ended flat.

Intesa Sanpaolo and other financials lead the advance among blue chips, while Tiscali rallied after announcing the acquisition of the broadband and voice operations of the UK company Pipex.

Intesa Sanpaolo rose 1.87% to 5.46 Eur. Reports said the bank is close to finalise a deal to acquire smaller rival CR Firenze in a moved aimed at expanding its presence in Tuscany, where its market share is less than one-third of its 17.5% domestic average.

On the midex index for mid caps, Banca Generali, the banking arm of the Generali group, rose 8.50% to 10.18, boosted by an upgrade at domestic broker Interomonte to 'buy' from 'neutral' with a price target of 11.40 Eur.

Italease rose 7.34% to 18.34, after having lost more than 50% in the last couple of months due to worries over its derivative exposure.

Investors are expecting the company to announce a capital hike to resolve its financial situation, in a move that could bring a new investor into its share capital with a stake of no more than 10%.

Tiscali, which is listed on the Midex index, too, rose 8.76% to 2.44, after the Pipex acquisition. Analysts said the deal is a positive move for Tiscali from a strategic point of view and that the company is not overpaying.

Tiscali said it will buy the assets for an enterprise value of 210  million stg and that it will carry out a a capital in crease worth up to 150  million Eur to partly finance the deal, confirming previous newspaper reports.

Pipex has 650,000 voice clients and 570,000 broadband customers, boosting Tiscali UK's broadband users to 1.9  million.

With nearly 2  million broadband clients, Tiscali is now 'close to Carphone Warehouse and not far from BT and Virgin,' an analyst said.

The acquisition should generate 150  million stg cumulated synergies at the EBITDA level over four years, and integration costs are seen at some 50  million stg.

Tenaris fell 4.30% to 18.41, hit by a downgrade to 'underperform' from 'neutral' at Credit Suisse, which advised investors to switch from Tenaris to SSAB or Vallourec within the steel sector.

RCS fell 0.53% to 4.19, reversing initial gains following the release of its business plan, which included a lower-than-expected target for its 2010 EBITDA margin on sales.

Impregilo fell 0.26% to 6.07, after the construction group announced that its CEO Alberto Lina, who turned Impregilo into a profitable company, resigned with immediate effect.

Lina is being replaced by current managing director Alberto Rubegni, the company said, confirming previous press reports.

And finally in Europe, we go to Spain where Madrid's Share prices closed higher, extending Thursday's gains, with Santander and FCC leading gainers, while Antena 3 moved lower amid profit taking.

The IBEX-35 index ended up 81.70 points at 15,023.5, after trading in a range of 14,981-15,082.

The IBEX-35 index stayed in positive territory through the afternoon in thin trade, hanging on to the technical resistance line of 15,000 with little newsflow to propel it either up or down.

Santander rose 0.14 Eur to 14.16 as analysts said they expect an RBS-led consortium -- including Santander and Fortis -- to press ahead with a revised offer for ABN excluding LaSalle.

Earlier, the Dutch Supreme Court decided to allow ABN's sale of its US unit, LaSalle.

Heavyweight peers were also higher, with BBVA rising 0.17 to 18.17 and Telefonica adding 0.11 to 17.07.

FCC climbed 1.80 or 2.63% to 70.20, after a report in El Confidencial said Russian businessman Roman Abramovich has approached Colonial chairman Luis Portillo for the property company's 15% stake in FCC.

Colonial slipped 0.02 to 4.08.

Leading the losers, Antena 3 fell 0.19 to 15.07 amid profit taking after yesterday's strong gains on M&A rumours.

Other session losers included selected utilities, with Gas Natural down 0.17 to 44.71, Endesa off 0.06 at 39.30, REE slipping 0.15 to 34.18 and Enagas down 0.16 to 17.86.

Iberdrola put on 0.31 to 40.47 after Credit Suisse hiked its price target to 42 Eur per share from 32 Eur, and Union Fenosa rose 0.30 to 40.90.

Bankinter rose 0.75 to 66.65 and Banco Popular gained 0.04 to 13.59, ahead of first half results due next week.

Banco Pastor rose 0.05 to 15.27, though off earlier highs of 15.45, after JP Morgan initiated coverage with 'neutral' and a 16.0 Eur price target.

Among other medium caps Vueling soared 0.81 or 3.45% to 24.31 after reporting that the number of passengers it transported in June increased 78.7% to 529,537.

UK Market - The FTSE 100 closed firmer Friday, but off session peaks which saw the index hit a new 7-year intra-day high, with financials putting in a strong performance amid hopes the long-running ABN Amro saga could be closer to a resolution.

By the close, the FTSE 100 index finished 21.4 points ahead at 6,716.7, having hit a high of 6,754.1 earlier in the session, while the FTSE 250 mid-cap index ended up 113.9 at 11,922.9.

Volume was average, with 2.6  billion shares having changed hands in 526,307 deals.

Standard Chartered topped the index with Lloyds TSB also higher with sentiment driven in part by market rumours that Temasek, which already owns an 11.55% stake in Standard Chartered, is interested in buying both banks and combining them.

When it first acquired its Standard Chartered stake in March last year, Temasek downplayed takeover talk, stressing that it was supportive of Standard Chartered's management team.

As it was, both bank were quick to scotch rumours which have triggered a sharp rise in both over the last two days. 'There is nothing (of substance) fuelling this,' one source said.

Standard Chartered closed up 48 at 1690, with Lloyds up 6-1/2 at 566-1/2.

Elsewhere, Hedge fund manager Man Group was another top blue-chip gainer, up 17 pence at 633-1/2 following yesterday's strong first-quarter trading update and healthy outlook for the full-year.

And Barclays moved up 6 pence at 724-1/2 after some of the uncertainty surrounding the takeover battle for ABN Amro was lifted following the Dutch Supreme Court's ruling that ABN is allowed to sell its US unit LaSalle to Bank of America Corp without a shareholder vote.

The sale of LaSalle, structured as a side-deal to an agreed 65  billion Eur offer for ABN from Barclays, had been challenged by some ABN shareholders.

The ruling is seen as a setback to the Royal Bank of Scotland-led consortium, as RBS had been keen to procure LaSalle itself. RBS finished 5-1/2 better at 640.

Shares in UK life insurers were generally higher in midmorning deals, with Aviva up 9 at 762, Old Mutual up 3.3 at 173, and Resolution up 2-1/2 at 640 after Morgan Stanley said there could be a powerful rally in the sector if, as its UK economist suspects, the Bank of England may be considering a year-end cut in interest rates.

Elsewhere, British Land took on 18 to 1,381 after saying it had made a good start to the financial year on good progress on developments and rental increases across the office sector, adding that it expects to report a further advance in net asset value (NAV) for the quarter to June 30.

Turning to the losers, the miners lost some of yesterday's sparkle following the M&A fever which gripped the sector.

Rio Tinto, a heavy faller yesterday after it announced the acquisition of Alcan, fell another 80 pence to 3,730 after ABN Amro downgraded the shares to 'hold' from 'buy'. And peers Lonmin slipped 72 pence to 4,278, and BHP Billiton lost 27 pence to 1,527.

Cadbury Schweppes was 8 pence lower at 659-1/2 ahead of a verdict from Birmingham Crown Court later today in relation to salmonella contamination in some of the confectionery giant's products last year.

The miners lost some of yesterday's sparkle following the M&A fever which gripped the sector.

Turning to the midcaps, Quintain Estates & Development was among the top gainers, jumping 32 pence to 887, after news that property investor Paul Kemsley has sold his 11.9% holding in the group to Uberior Ventures, HBOS's property investment arm, according to a report in the Financial Times.

The stake buy will likely cause speculation of a bid for Quintain, said the FT.

Shares in Aegis Group were up 6 pence at 142, after the media and marketing company won the media buying and planning account for Johnson & Johnson (J&J) worth about 440  million usd in billings, with UBS reiterating its 'buy' rating and 170 pence target.

Britvic bucked the upbeat trend among the FTSE 250 issues, with shares down 10-1/4 pence, at 355-1/4, making it the worst-performing midcap stock, as Altium Securities initiated coverage with a 'reduce' recommendation and a target price of 330 pence.

And the fizz also came out of C&C Group's shares, which were down 1.65 Eur to 8.45, as the soggy summer weather also hit the Magners cider producer, which warned in today's AGM that very poor weather in June and into July together with continued heavy price-led competition is likely to lead to a weak second quarter.

Japan & Asia Pacific - Heaven help the Asian fund manager who sold in May and went away. Stock markets in the region have spent much of the summer hitting fresh highs. On Friday, five of them closed at record levels.

Given the euphoria and the funds pouring into the region, it is hard to imagine the party ending any time soon. Jitters are swiftly forgotten. Foreign investors spent just eight weeks pulling money out of China in the wake of recent wobbles; by the first week of July, the bulk of new money to Asia was heading for Greater China. The same week saw $1.4bn of net buying in the Indian market, according to Citigroup. Singapore, a darling for foreigners, continues to attract net buying.

Nonetheless, warning signs are flashing. Asia’s markets, with a few notable exceptions such as Thailand, are expensive in historical terms at 16-20 times this year’s earnings. Estimated earnings growth, both this year and next, is mostly in the 10-20% range, but there are a few dull patches – including Hong Kong and Singapore. Currency appreciation, while good for overseas investors, is crimping profitability at Korean and Indian exporters. And a handful of scuttled deals, in markets from Australia to Taiwan, could signal an end to the M&A frenzy that has helped spice up prices.

Most Asian markets advanced strongly Friday, with companies like Samsung and China Mobile surging on investor optimism about their earnings potential.

Sentiment was also buoyed by Wall Street's overnight rally, with shares in Hong Kong, South Korea and Indonesia hitting records. Thai stocks rose to their highest in more than 10 years, and Japanese shares reversed a three-day slide.

South Korean stocks rose to an all-time closing high, fueled by robust gains in Samsung Electronics, steelmaker Posco and Korea Electric Power Corp. — the country's three largest companies in market capitalization. The Korea Composite Stock Price Index, or Kospi, rose 53.18 points, or 2.8%, to 1,962.93.

Samsung Electronics, which roughly met market expectations with its second quarter earnings and released robust earnings outlook, closed up 6.4% at 687,000 won — helped by a news report the US billionaire Carl Icahn and possibly other foreign buyout funds may be planning a hostile takeover bid. The company denied it was aware of any such attempts.

Posco, the world's fourth-largest steelmaker by output, shot up 10% to 560,000 won on wide expectations of second quarter earnings due Monday. Korea Electric Power Corp., or Kepco, rose 5.4% to 46,250 won on a report the government was seeking to list shares of its unit Korea Plant Service and Engineering on the local market.

In Tokyo, Japanese stocks jumped, nearly recouping the losses of the previous three days.

The Nikkei 225 index rose 254.81 points, or 1.42%, to 18,238.95 points. It briefly traded above the seven-year closing high of 18,261.98 recorded on July 9, before falling back on profit-taking.

Market players are increasingly anticipating technology shares to extend gains and catch up to other sectors, as the April-June earnings report season begins.

Gainers included machine tool maker Fanuc Ltd., which rose 2.07% to 13,340 Yen (US$109.34), Mitsui O.S.K. Lines Ltd., which surged 2.77% to 1,781 Yen (US$14.60). Export-import company Marubeni Corp. posted a 4.74% gain to 1,170 Yen (US$9.59).

Banks also advanced, with Sumitomo Mitsui Financial Group Inc. climbing 2.63% to 1.17 million Yen (US$9,590.16).

In Hong Kong , shares hit a fresh record high, with China Mobile (Hong Kong) Ltd. and phone maker Foxconn sharply outperforming the broader market.

The blue chip Hang Seng Index rose 290.27 points, or 1.3%, to 23,099.29, bringing its weekly gain to 2.5%.

Traders warned that there is mounting pressure for the Hang Seng to pull back, citing shrinking market turnover. They're also concerned that the index appeared to be driven solely by China Mobile.

The phone operator jumped 3.3% to HK$91.95 Friday. Traders see limited upside at China Mobile, after it gained 22% over the past month, versus a 11% gain at the Hang Seng over the same period of time.

Thailand 's market closed 1.8% higher at 859.14 in active trade, as foreign buying kept flowing unabated, lifting the market to its highest in 10 1/2 years.

Indonesian shares gained 0.7% to a fresh new high of 2,301.60 in moderate volume, boosted by gains on Wall Street.

Malaysian shares ended 1.4% higher at 1,384.72, an intraday high.

Philippine shares inched up for the second straight session, driven by Wall Street gains and the central bank's cut in overnight borrowing rates. he benchmark 30-company Philippine Stock Exchange Index rose 29.27 points, or 0.8%, at 3,786.02.

Chinese stocks were virtually unchanged as profit-taking in newly listed firms offset gains in companies with strong earnings outlooks.

China's main stock index ended down 0.04% on Friday as investors took to the sidelines ahead of next week's inflation data, which could prod Beijing to tighten credit controls.

The market is feeling pressures from different directions. IPO news, along with policy concerns, are pushing the market down, while companies with strong profits are pushing the market up. This is why the market may not move very much in the coming days - but who knows with China?

The benchmark Shanghai Composite Index edged down 1.59 points, or 0.04%, to 3,914.40. The Shenzhen Composite Index of China's second, smaller market lost 1.38 points, or 0.1%, to 1,089.99.

Taiwanese shares surged to a new seven-year high, following overnight gains on Wall Street. The Weighted Price Index of the Taiwan Stock Exchange rose 116.89 points, or 1.3%, to close at 9,471.30.

Singapore share prices rose sharply to close at fresh record highs on Friday. The ST Index soared 30.05 points, or 0.83%, to a new record high of 3,654.61, after touching a fresh intraday summit of 3,685.01.  There were 545 advances against 322 declining issues on a volume of 4.2 billion shares.

Oil and gas related counters led gains following a series of upgrades from brokerage houses during the week on expectations of more contract wins going forward.

SembCorp Marine led the gainers, rising 20 cents to S$5.45. COSCO Corp was up 10 cents at S$4.90 and SembCorp Industries added 10 cents to S$5.65.

Property heavyweights also advanced, with City Developments climbing 40 cents to S$16.90, CapitaLand gaining 5 cents to S$7.75 and Keppel Land rising 5 cents to S$8.55.

Among blue chip winners, Singapore Airlines added 20 cents to S$19.60, Singapore Press Holdings put on 8 cents to S$4.64 and Singapore Telecommunications gained 2 cents to S$3.48.

ST Engineering was up 2 cents at S$3.64 after its unit, ST Marine Ltd, won a S$168 million contract to design and build a passenger ferry for France's Louis Dreyfus ArmatEurs SAS.

Most banking shares extended gains, with DBS Group Holdings up 30 cents at S$23.90 and United Overseas Bank up 20 cents at S$22.80. Oversea-Chinese Banking Corp fell 5 cents to S$9.45. - AFP/ch

In India , on the back of strong global cues and surge in metal and capital goods shares, the Sensex and Nifty set record closing highs on Friday. But small-cap and mid-cap stocks were pressured as traders booked profits at higher levels.

The Bombay Stock Exchange's Sensex ended 181 points or 1.2% higher at 15273. It touched a high of 15330.73 and low of 15216.83 intra day.

National Stock Exchange's Nifty closed up 59 points or 1.31% at 4504, making a high of 4514 and low of 4446 earlier in the day.

But the market breadth was negative, with 1,534 declines against 1,148 advances on BSE and 636 losers versus 489 gainers on NSE.

Biggest Sensex gainers were Hindalco Industries (up 6%), Tata Motors (3.8%), Tata Steel (3.35%), Reliance Industries (3%) and Satyam Computer (2.8%).

Index losers comprised Tata Consultancy Services (down 2.1%), Dr Reddy's Laboratories (2.03%), Hindustan Unilever (2.5%), Ranbaxy Laboratories (1.48%) and Reliance Communications (1.41%).

Metal shares were in the limelight on ArcelorMittal entering into an agreement with Nippon Steel Corp for a global strategic alliance and expansion of current joint business ventures in North America. Also, Rio Tinto Group has agreed to buy Alcan for $38.1 billion, trumping a hostile bid by Alcoa to form the world's biggest aluminum maker.

BSE Metal Index gained nearly 5% to 12,032. Hindalco rose 6% to Rs 174.45, Sterlite Industries gained 3.25% to Rs 663, Steel Authority of India surged 9.73% to Rs 158.50 and Tata Steel added 3.83% to Rs 698.

After the recent run-up in the real estate space, investors chose to book profits, pulling the BSE realty index down 1.31% to 7778. DLF shed 1.65% to Rs 600, Parsvnath Developers lost 3.7% to Rs 378 and Sobha Developers fell 2% to Rs 931.

The Australian sharemarket recovered some losses sustained in early Friday trade.

The All Ordinaries Index lost as much as 59 points Friday morning but managed to end the day slightly higher but still in the red.

The All Ordinaries Index slipped 31 points to close 6,366. The ASX 200 dropped 32 points to 6,329.

Macquarie Bank shed $1.45 to $86.90 and James Hardie Industries slipped 1% to $9.00.

The big miners are lower because of a fall in some base metals prices. BHP Billiton has lost 66 cents to $37.80 and Rio Tinto has given up 72 cents to $102.77.

In other news United Group, an Australian engineering services firm, announced Friday it had bought a property services company based in the US for $477 million. The company is still in a trading halt.

In the retail sector, Woolworths lost 36 cents to $27.83.

Coles has slipped by seven cents to $15.14, while Wesfarmers has dropped 58 cents to $40.60.  The figure is below the price which could lead to the collapse of its $22 billion takeover of Coles. If the shareprice hovers below $41.16 for 20 days, either party can call the deal off.

In New Zealand , optimism on Wall St filtered through to the local sharemarket Friday, with a moderate 0.1% rise in the benchmark NZSX-50 index.

The index rose 5.11 points to 4243.66, led by a 2c rise in Telecom to 466 .

Fletcher Building also rose, up 11c to 1244, building on a 7c rise yesterday. Brokers said the stock had been looking oversold.

Other leading stocks were mixed with Auckland International Airport flat at 330, Contact Energy rose 5c to 901 , Fisher & Paykel Appliances gained 5c to 350, F&P Healthcare was flat at 327, and Pumpkin Patch lost 3c to 342.

On the downside, Sky City lost 4c to 489 . Mr Taylor said Sky City shareholders were waiting for a lead about the potential asset sale of the company's Adelaide casino and the movie business, "and for some direction from the acting CEO".

Freightways, off 14c to 391, had weakened because of concerns about weakness in the internal economy, "suggestions that people aren't spending as much as they were".

NZ Oil and Gas lost 3c to 129 after earlier hitting a record high of 134 on positive oil and coal news, while Southport jumped another 15c to 290 on hopes of increased traffic from oil exploration in the South.

Canwest Mediaworks rose 7c to 245, well above the $2.33 per share offer from Ironbridge Capital, which failed to get 90% ownership on Tuesday .

Rises outnumbered falls 69 to 43 on 147 stocks traded.

Commodities - Crude oil rose on Friday to a new 11-month high above $77 a barrel propelled by fund money flowing into the energy markets and International Energy Agency projections of a tight market in the second half of the year.

ICE August Brent rose to an intraday high of $77.45 a barrel, and in late morning trading in London was 97 cents up to $77.37 a barrel.

Brent crude oil has only traded above the $77 a barrel level in other 10 trading sessions, mostly in July and August 2006.

Nymex August West Texas Intermediate was 35 cents up to $72.85 a barrel.

The International Energy Agency, the industrialised countries’ energy watchdog, said on Friday that Opec needs to sharply increase its production in the second half of the year to avoid a tight oil market.

The Organisation of the Petroleum Exporting Countries has so far rejected calls for a production increase. It blamed US refinery problems, geopolitical instability and speculation on the financial markets for the price increase.

The IEA said in its monthly oil market report: ”The analysis suggests a sharp rise in the requirement for Opec crude between a second quarter low point of some 30m b/d and nearer 33m b/d by the fourth quarter.”

The IEA said in its first estimate for 2008 that oil demand growth would accelerate to 2.2m b/d in spite of record high oil prices, while non-Opec supply growth would remain lacklustre for the foruth year in a row at 1.0m b/d.

But an increase on Opec total production capacity and refinery flexibility would mean that the market would be in ”a slightly more comfortable than 2006 and 2007,” according to the IEA.

”Investment in upgrading capacity should increase the flexibility of the refining industry to meet demand-side and crude-quality challenges - and may therefore reduce some of these upside price pressures,” the IEA said, noting that the ”this increased flexibility starts to kick in from 2008.”

Gold rose $0.55 to $667.55 an ounce troy supported by the weak US Dollar.

Base metals were supported by ongoing supplies disruptions and strikes. London Metal Exchange copper rose $44 to $7,870 a tonne, while lead hit a fresh all-time high of $3,040 in early trade on fund buying.

Currencies - The Euro hit a new record high against the Dollar on Friday above $1.38 after an unexpected sharp drop in US retail sales in June.

The Dollar fell as low as $1.3812 against the Euro, down 0.2%. The Pound rallied 0.3% to a fresh 26-year high at $2.0366, and the Yen clawed back 0.1% to Y122.27.

The Yen hit a fresh low against the Euro as a soaring performance on US equity markets on Thursday helped restore some appetite for risk.

Sagging expectations of a near term interest rate increase in Japan, following Thursday’s 8-1 vote to keep rates on hold at 0.5%, supported the view that the Yen will continue to be a cheap source of borrowing for carry trades.

The Euro climbed 0.1% to Y168.59, Sterling gained 0.1% to Y248.68.

Among the highest yielding currencies, the Australian Dollar climbed 0.1% to Y106.20.

The New Zealand Dollar however, fell 0.3% to Y96.15, despite higher-than-expected retail sales numbers.

Kiwi Dollar weakness followed the announcement by the Reserve Bank of New Zealand that it was making changes to its financing and management of foreign currency reserves.

South Africa's rand ditched its volatile ways this week by remaining stuck in the same range. At 1510 GMT, the rand was trading at 6.9650 versus the Dollar, below its New York close of 6.9575 on Thursday.

It has held in a 10 cent band for the past few sessions, balancing negative emerging market sentiment earlier in the week with more supportive equity markets and commodity prices.

Meanwhile, the Canadian Dollar was down 0.27 of a cent to 95.38 cents US. On Thursday, the loonie had jumped three-quarters of a US cent after Rio Tinto's all-cash offer and the feeling that the Bank of Canada will continue to hike interest rates to control inflation.

And closing out currencies, we go to the RMB where The Yuan finished at 7.5695 to the Dollar on the over-the-counter (OTC) market, down from 7.5673 Thursday.

China - China's outstanding local-currency loans rose 16.48% in June from a year earlier to 25.08 trillion yuan (US$3.31 trillion), according to the People's Bank of China, China's central bank.

Banks extended 451.5 billion yuan of new loans in June, bringing the total to 2.5 trillion yuan for the first half, and making last month this year's second highest after January, based on new loans.

The rise in bank loans could have significant effects on the overall money supply, and has sparked discussion amongst analysts in regards to the best way to measure the money supply.

Whether the loan growth is driven by enterprise development or motivated by the banking sector itself is of great concern to many analysts.

Although outstanding local-currency loans grew rapidly in the first five months and have met nearly 70% of this year's loan target, the benchmark one-year lending interest rate dropped to 6.51% from 6.58%.

The lending interest rate dropped in spite of two loan interest rate hikes this year, which spells bank-motivated loan growth.

The central bank has raised interest rates twice this year and repeatedly ordered lenders to set aside more reserves to curb inflation, investment, and asset bubbles.

Bank-motivated loan growth is an independent force for asset revaluation, although currently the trade surplus remains the primary force for asset revaluation. China's forex reserve, the world's largest, rose 41.6% from a year earlier to US$1.33 trillion as of June 30.