US Markets - Wall Street plumbed new lows for the year this week but stocks recovered as investors regained composure after subprime mortgage scares.

The talk on Wall Street yesterday after a week of severe volatility, was mostly about a report that Blackstone, the private equity group, was planning an initial public offering.

A market debut by Blackstone is likely to be taken as a sign of confidence in the face of recent weakness in global equities. Details of the offer are unclear, but Blackstone is understood to be in advanced stages of preparation. The prospect of a flotation is likely to cause a big stir.

Shares in Fortress Investment, the private equity group and hedge fund manager, almost doubled on its market debut in February amid intense demand from retail investors. By the close on Friday Fortress had fallen 30% to $25.74 from its intra-day record high $37 reached on the day of its market debut.

The Blackstone talk came at the end of a tumultuous week in which stocks were propped up by the seemingly relentless flow of deals, including a dramatic bid for CBOT Holdings.

After the tentative gains made in the previous week, technical analysts had been anticipating a “test” that would indicate whether the recent turmoil would develop into a longer-lasting bear market.

When the “test” came on Tuesday and Wednesday, it was once again related to subprime mortgage problems. But familiarity with the issue was little comfort to investors watching stocks plunge across the board.

At one stage the Dow Jones Industrial Average fell below the 12,000 mark; a plunge of 5.9% from its record high in February.

The Dow closed 0.4% lower on Friday, to stand 1.3% down for the week at 12,110.41. The S&P 500 Index was 1.1% lower at 1,386.95. The Nasdaq Composite slipped 0.6% to 2,372.66.

Financial groups led the slide down, and the way back up, as three big investment banks reported results. In the event, Goldman Sachs, Lehman Brothers and Bear Stearns all met or exceeded expectations. But with rumours of losses swirling round the market, the announcements were a source of anxiety and reassurance by turns.

Persistent worries about Lehman’s exposure to subprime mortgages sent its shares at one point 10% below Tuesday’s opening. But the stock rallied as executives said the group was well-hedged. Lehman was finished the week 6.1% down at $71.19. Goldman Sachs was 1.3% down at $199.

Some analysts expected that volatility would continue. “Long-term investors should pull up a lawn chair and enjoy the fireworks,” said Marc Pado, chief market strategist at Cantor Fitzgerald. “Until we get through some of the crazy action, the sidelines should be a safe and comfortable spot.”

Stuart Schweitzer, global markets strategist for JPMorgan Private Bank, said the market “will need much greater clarity about corporate earnings before a meaningful rally can ensue”.

Carmakers skidded this week. General Motors reported better fourth quarter profits and revenues. But its stock plunged 5.9% to $29.17 on concerns about its US sales amid a possible economic slowdown. Rival Ford fell 4.9% to $7.55.

In deal news, the future of CBOT was thrown into doubt after the Intercontinental Exchange launched an unsolicited $9.9bn bid. CBOT was set to merge with the Chicago Mercantile Exchange. Shares in CBOT rose 12.5% to $190 as investors contemplated a bidding war.

Speculation that Dow Chemical was seeking a joint venture with Reliance Industries, India’s leading petrochemical maker, lifted its shares 5.2% to $45.25.

Retailers remained under pressure as confidence in consumer spending flagged. Wal-Mart, which withdrew its application to open a specialty bank on Friday, fell 2.6% to $46.21. Target slid 3.4% to $59.77.

Homebuilders were in the doldrums on fears of tighter lending affecting the spring home selling season. Pulte Homes fell 8.5% to $26.31 while DR Horton was down 6.3% to $22.83.

Accredited Home Lenders said it had agreed to sell $2.7bn of its subprime mortgage loans at a discount to free up cash to pay its creditors. Accredited surged 15.7% to $10.90 on Friday.

European Markets - Shares in Europe’s leading investment banks came under sustained pressure this week amid mounting concerns about their exposure to the US subprime mortgage market.

On Tuesday and Wednesday, the FTSE Eurofirst 300 tumbled 3.7%, although it partly recovered to close yesterday at 1,454.89, a loss of 2.3% over the week, as a burst of merger and acquisition activity helped steady the market.

Starting in Germany where Share prices gave up afternoon gains after US markets moved lower as investors weighed up data that showed rising inflation and a cooling overall economy.

The DAX closed off 4.69 points or 0.08% at 6,580.78 after trading between 6,528.30 and 6,614.06.

The MDAX gained 73.45 points or 0.77% to 9,651.37 and the TecDAX was 0.37 points or 0.05% lower at 805.31.

The DAX futures were down 23.50 points or 0.36% to 6,548.00.

Major gainers included Metro, which rose 1.12 Eur or 2.06% to 55.42, followed by Adidas, which gained 0.67 Eur or 1.83% to 37.30.

Volkswagen rose 1.79 Eur or 1.35% to 104.24 after a company spokesman said its troubled SEAT unit may cut 10% of its work force in order to reduce operating costs.

Bayer was up 0.40 Eur or 0.91% at 44.53 as its shares were upgraded to 'buy' from 'add' by WestLB and after price target increases from Deutsche Bank, Lehman Brothers and Citigroup.

Infineon was up 0.18 Eur or 1.62% to 11.26 as Deutsche Bank raised its target price on the stock to 13.50 Eur from 12.80 and reiterated its 'buy' rating.

TUI was the worst performer, dropping 0.76 Eur or 4.40% to 16.51, followed by ThysseNKrupp, another major decliner, down 1.22 Eur or 1.36% to 34.93.

Deutsche Post lost 0.28 Eur or 1.21% to 22.87 while Deutsche Boerse was down 1.90 Eur or 1.18% to 158.90.

SAP lost 0.37 Eur or 1.08% to 33.97 on a report that the company's founders are not interested in selling their stakes to private equity investors.

Across into France now where Share prices ended virtually flat after mixed morning trading on Wall Street following the latest economic data and after a hesitant day's trading in which financial stocks remained under pressure amid continuing worries about subprime-mortgage risks.

The CAC-40 index finished down 7.69 points or 0.14% at 5,382.16 on volume of 8.4  billion Eur.

Among CAC-40 stocks, 21 closed higher and 19 closed lower.

On the Matif, CAC-40 futures were trading down 5.0 or 0.09% at 5,402.5.

On the broader indices, the SBF-80 index closed up 23.01 or 0.34% at 6,758.15 and the SBF-120 ended 2.77 or 0.07%

Banks led the fallers on the CAC-40 as the market remained nervous about their exposure to US subprime mortgages.

Dexia shed 0.44 Eur or 2.10% to 20.48; Credit Agricole fell 00.37 or 1.27% to 28.82; and Societe Generale closed down 1.26 or 1.03% at 121.14.

Mid-cap Natixis recorded a smaller 0.08 or 0.44% drop to 18.12 after yesterday's heavy losses sparked by disappointing full-year results and the wider concerns about subprime mortgages.

Real-estate stocks also remained out of favour, partly because of fears that trouble in the subprime segment could weigh on the property market.

Klepierre plunged 12.04 or 8.64% to 127.38 and Fonciere des Regions slid 5.39 or 3.88% to 133.61.

On the upside, Thomson SA led blue-chip gainers, adding 0.49 or 3.58% to 14.17 after being upgraded to 'buy' from 'neutral' by Merrill Lynch.

Carrefour extended recent speculative gains that have been driven by rumours about its shareholder situation and plans to enter India.

The retailer ended up 0.90 or 1.64% at 55.84, bringing its gains to over 21% since the start of the year.

There have notably been reports this week of a possible tie-up between Carrefour and India's Reliance Industries. Sources close to Reliance also told AFX News today that the Indian group has held talks over the purchase of a strategic minority stake in J Sainsbury PLC, another retailer to have fuelled speculation in recent weeks.

Still in the retail sector, Casino Guichard-Perrachon added another 1.88 or 2.55% to 75.50 on the back of a leap of 11.88% yesterday, when it pleased investors with its full-year results and signs of an operational shake-up at the struggling Franprix and Leader Price chains.

Casino's strength lifted parent company Rallye, which jumped or 7.58% to 48.00 on top of yesterday's 9.26% rise.

Tech stocks also remained in positive territory after yesterday's frantic speculation over a private equity bid for Atos Origin.

Atos closed up 1.25 or 2.53% at 50.75, following yesterday's 25% jump as the company confirmed it had received 'expressions of interest' but rejected reports of a 58 Eur per share offer from investment funds Permira and Centaurus.

Next door in The Netherlands , Shares in Amsterdam closed lower but Unilever outperformed amid renewed M&A speculation.

The AEX closed 1.25 points or 0.26% lower at 482.14 after trading in a range of 480.63-485.70.

Financials ended lower. ABN Amro shed 0.62% to 27.29 Eur, ING lost 0.73% to 30.03 Eur, Aegon shed 1.03% to 14.43 Eur and Fortis was the day's major decliner, losing 1.37% to 30.96 Eur.

Oil-related shares also closed down, with Royal Dutch Shell dropping 1.24% to 23.88 Eur and SBM Offshore slipping 0.08% to 26.08 Eur.

DSM dropped 1.13% to 33.11 Eur, Arcelor Mittal lost 0.89 pc tto 37.95 and TNT shed 0.83% to 32.32 Eur.

On the other side of the spectrum, KPN was up 0.44% to 11.36 Eur amid reports that the telecom group is getting ready to acquire IT services company Getronics, which soared 4.99% to 6.52 Eur among mid-cap shares.

Unilever gained 2.68% to 21.47 Eur amid renewed speculation that the company is a takeover target for private equity funds.

Among mid-cap shares, property fund Wereldhave suddenly soared 9.22% to 113.53 Eur just before the close. Dealers speculated that the sudden surge may have had something to do with a faulty order placed on the market.

In Belgium Brussels shares closed lower with heavyweight financial Dexia leading the fallers.

At the close, the Bel 20 was down 5.58 points or 0.13% at 4,257.21.

Dexia saw the sharpest fall and was down 0.44 Eur or 2.10% to 20.51, while peers Fortis and KBC fell 0.42 Eur or 1.34% to 30.95, and 0.49 Eur or 0.56% to 86.83 respectively.

Holding company Nationale a Portefeuille fell 0.42 Eur or 1.34% to 30.95.

Delhaize fell slightly on profit taking after the group rose over 5% yesterday following the publication of its full-year results.

The supermarket group was down 0.08 Eur or 0.12% at 67.87.

Bucking the trend, steel wire and cord manufacturer Bekaert rose 2.93 Eur or 3.18% to 95.21 after the group posted full-year results this morning that pleased analysts and led to an increased target prices at KBC and ING.

Healthcare group Omega Pharma was up 1.16 Eur or 2.05% at 57.69, also after posting strong full-year results this morning and a rating upgrade to 'buy' from 'hold' at ING on valuation grounds.

Brewer InBev was up 0.33 Eur or 0.62% at 53.59.

The group's Ambev unit has extended to April 5 its official offer to acquire the remaining shares in its Quilmes Industrial SA (Quinsa) unit.

The offer, which will now expire at 11.00 pm Luxembourg time on April 5, is made by Beverage Associates Holding Ltd, a Bahamian group and a wholly owned unit of AmBev.

Utility Suez rose 0.08 Eur or 0.22% to 36.97.

Outside the Bel 20, Kinepolis was up 2.69 Eur or 5.17% at 54.70 as ING Research reiterated a 'buy' rating and upped its target price for the Belgian cinema group to 60 Eur from 58 on strong full-year results and a solid outlook.

Across now into Switzerland where Share prices closed little changed but still outperformed most other European indices, with heavyweights trading mixed and Swatch outperforming ahead of full-year results Monday.

At the close, the Swiss Market Index was 10.85 points higher at 8,717.63, and the Swiss Performance Index was 7.86 points higher at 6,962.95.

The Euro fell against the Swiss franc to 1.6070 SFr, as did the Dollar to 1.2070 SFr.

The top gainer here was Swatch, up 1.4 SFr or 2.5% at 61.4 SFr. Earlier Friday afternoon, the group issued a statement saying its full-year results are to be published on Monday instead of Thursday.

Pharma heavyweights were slightly higher, with Roche up 1.4 at 211.6 and Novartis adding 0.3 SFr at 68.9 SFr.

Nestle ended 2 SFr higher at 464.5. Earlier today, the group said it has opened a milk processing plant in Kabirwala, Punjab, with a processing capacity of 2  million litres of milk per day.

Financials were little changed: UBS was flat at 69.1 SFr, while Credit Suisse shed 0.35 SFr at 84.1 SFr.

Insurers were mixed. Zurich Financial added 1.5 SFr at 335.5 SFr, while Swiss Re dropped 1.3 SFr or 1.2% to 103.4 SFr.

Syngenta was the biggest decliner, down 3.8 SFr or 1.7% at 217.9 SFr.

Outside the SMI, StarragHeckert ended 23 SFr or 4.14% higher at 578, as investors welcomed the machine tool maker's tripling in full-year net profit to 7.5  million SFr, up from 2.4  million in the previous year, driven by strong demand from the aircraft industry.

Starrag said it expects a positive development for 2007, with order intake and sales seen higher and its EBIT margin likely to be within its 7-8% target range.

Into the Nordic arena now and starting in Sweden where Stockholm shares closed little changed, with TeliaSonera and Electrolux among the gainers and Tele2 and Skanska among those shares closing lower.

The OMX Stockholm index closed down 0.08% at 379.85, while the OMX Stockholm 30 index rose 0.02% to close at 1,166.98.

Electrolux was up 1.24% at 163.50 SKr. The group's head of East Asian appliance operations Brad Tribble, said the company is aiming for double-digit growth in sales this year in east Asia, due to the stable economy and increasing demand for appliances in the region, the online version of the Malaysian newspaper Business Times reported.

Tele2 shed 1.34% to 110.25 SKr. The group said it has appointed Lars Nilsson as its new chief financial officer.

TeliaSonera was up 2.14% at 59.75 SKr.

Scania fell 2.13% to 506.00 SKr. Shares in the group have been upgraded to 'neutral' from 'underweight' by HSBC with an increased target price of 540 SKr, up from 475 in a review of the Global Capital goods sector.

Alfa Laval was down 1.10% at 360.50 SKr. The group said it has signed an agreement to buy the US company DSO Fluid Handling, which manufactures parts for pumps and valves for the sanitary processing industries.

Volvo added 0.53% to 566.00 SKr. The group said its Volvo Construction Equipment (Volvo CE) business area, will over the next three years invest 1.1  billion SKr in its component division in Eskilstuna, Sweden.

Ericsson was down 0.41% at 24.55 SKr. LM Ericsson AB is aiming for double-digit sales increases in Germany by offering more high-speed data services and outsourcing networking operations, the company's head of operations Stefan Kindt said.

Lundin Mining was flat at 72.00 SKr. The company said it will invest 1.955  million cad in Canadian mining group Mantle Resources through a private placement, subject to regulatory approval.

SSAB shed 0.26% to 193.00 SKr. According to Sweden's Financial Supervisory Authority, SSAB's chief executive Olof Faxander has bought 1,600 B-shares in the group.

Among other shares, Skanska was down 1.25% at 138.75, Lindex gained 2.26% to 90.50 SKr and Saab added 1.94% to 183.50 SKr.

Into Finland now where Helsinki shares closed higher, led by Metso on bullish broker comment, with blue chips still finding it difficult to settle after several volatile sessions recently.

The OMX Helsinki 25 index finished up 0.43% at 3,006.00 and the OMX Helsinki 0.51% higher at 10,023.35. Trading volume was a heavy 2.38  billion Eur, boosted by a number of large single trades, including one in FIM after Icelandic investor Glitnir completed the acquisition of a 68% stake.

Metso reversed earlier losses to close up 2.27% to 38.75 Eur after Handelsbanken Capital Markets said that at current valuations there are plenty of reasons to accumulate stock ahead of the companys capital markets day for investors next week.

One possible theme in focus on the day will be the opportunities for Metso to grow in the power plant construction market, the broker said.

Among its engineering peers, Wartsila closed down 0.09% to 44.00 Eur, Kone down 0.65% to 41.43 Eur and Rautaruukki down 4.76% to 34.00 Eur.

Rautaruukki had dipped sharply with the very last block of trades. Shortly before the close, the stock was trading well above the 35.00 Eur mark.

Nokia ended up 1.11% to 16.41 Eur.

TietoEnator added 2.70% to 22.10 Eur, pushed higher by ongoing speculation about a private equity takeover bid for French peer Atos Origin. Uponor was down 5.78% at 26.06 Eur after going ex-dividend today.

FIM ended down 1.23% at 8.04 Eur. Glitnir now holds 68.1% of the Helsinki-based investment group after its 8 Eur per share bid placed with key shareholders went through Friday.

Neighbours Denmark saw Share prices close little changed, with Topdanmark and Vestas Wind Systems rising on positive broker comments, while Lundbeck reversed earlier falls which followed negative broker comments.

The OMXC20 index closed unchanged at 447.80 and the OMXCB Benchmark index was 0.42 points higher at 426.68.

The OMXC All Share index fell 0.08 points to 428.89 on turnover of 3.72  billion DKr.

Topdanmark closed 20 DKr higher at 1,035 after analysts at Sydbank raised their stance on the stock to 'overweight' following the insurer's strong fourth quarter and share buyback announcement.

Codan rose 8 to 509, while TrygVesta shed 0.5 to 445.5.

Danske Bank was unchanged at 244.25. Swedish business news website Affarsvarlden.se said Danske Bank is aiming for growth on brokering in Stockholm and has hired several top brokers.

Vestas Wind Systems was up 6.5 at 280. Jyske Bank reiterated its 'accumulate' stance ahead of the group's full-year earnings on Tuesday.

William Demant Holding added 2.5 to 481.5 and GN Store Nord rose 0.75 to 84.5, while TDC fell 3.75 to 212. TDC's AGM yesterday approved a 3.5 DKr dividend.

Lundbeck closed the session 0.5 higher at 162.5 in late trades, having been in negative territory for most of the session after brokerage ING expressed concern that either the group's management is being too conservative or that sales development will slow significantly, given Lundbeck's 2007 operating profit guidance of above 2.5  billion DKr and a 25% EBIT margin.

Genmab fell 1 to 336. It has entered a research collaboration with Danish Head and Neck Cancer Group (DAHANCA) for a Phase III study of Genmab's fully human antibody HuMax-EGFr.

Jyske Bank said news of additional studies of HuMax-EGFr is positive as they will provide further support for the product's potential. The bank reiterated its 'buy' recommendation.

NEuroSearch added 2.5 to 263. The pharmaceutical group said the critical analysis published earlier this week by Denmark's BiotekAnalyse magazine regarding the group's drug Tesofensine is erroneous.

Novo Nordisk B fell 2.5 to 473. Sanofi-Aventis is launching a new insulin injection pen, but analysts told daily Jyllands-Posten that they do not see it as a real threat to the Danish company.

Coloplast shed 1.5 to 466.5.

Danisco rose 1.5 to 445.5. The group posts third-quarter earnings on Tuesday. Analysts polled by RB-Boersen expect the group to post nine-months EBIT of 1.65  billion DKr and net profit of 821  million DKr on sales of 15.58  billion DKr.

Novozymes shed 1 to 485, while Carlsberg B was up 2 at 577.

DSV was 4 lower at 953. Analysts polled by RB-Boersen expect the group to post full-year pretax profit of 1.033  billion DKr and EBIT of 1.497  billion DKr on sales of 32.214  billion DKr next Friday.

AP Moeller-Maersk B fell 400 to 56,300 and DS Torm shed 5 to 356, while FLSmidth was unchanged at 358.

Rounding out Scandinavia is Norway where in Oslo Share prices closed higher, led up by Aker as bookbuilding in Aker Yards shares following Aker's sale of its remaining stake ended.

The OSEBX Benchmark index closed 1.70 points higher at 439.94 and the OSEAX All Share index rose 1.45 points to 497.97.

Total turnover amounted to 11.07  billion NKr.

Aker closed 16.5 NKr higher at 387, while Aker Yards shed 3 to 497, reversing earlier rises in late-reported trades.

Bookbuilders SEB Enskilda and JP Morgan have received more subscriptions for shares in the Aker Yards than are being offered in the placement, following analyst rumours 25% points of the 40.1% stake that group holding company Aker is selling have been placed with international investors at 'just above' 500 NKr per share.

Aker Yards said the bookbuilding will remain open until 5.00 pm today, as meetings with investors continue, while the banks announced towards the end of the session the price is expected to land at 500 NKr per share.

Aker Kvaerner fell 3 to 706.

Tomra Systems rose 0.55 to 45.25. Goldman Sachs upgraded the stock from 'neutral' to 'buy' and put the Norwegian recycling machine manufacturer on its 'conviction buy' list. Goldman also raised its price target on the stock to 55.50 NKr from 50.40.

Norsk Hydro shed 1.5 to 184.75 and Statoil was down 0.5 at 153 on weaker crude oil prices, dealers said.

Subsea 7 fell 0.25 to 100.75 after the Norwegian offshore services firm played down the probable impact of bad weather on its operations during the first quarter, dealers said.

Carnegie said it had spoken to the company and has been reassured 'they expect no further negative impact from storms in the first quarter beyond what's already been communicated'.

Carnegie has a 'neutral' recommendation on Subsea 7.

Frontline added 5 to 208, Petroleum Geo-Services rose 0.75 to 138.5, Prosafe was up 4.1 at 89.7 and Seadrill added 1.3 to 93.3, while Fred Olsen Energy was down 3 at 276 and Stolt-Nielsen shed 3.5 to 166.5.

Down into the Mediterranean now and starting in Greece where Athens Share prices ended higher, led by the solid performance by blue chips.

The ASE general index closed up 1.5% to 4,518.6 points, with all indices closing higher.

The blue chip index closed 1.9% higher to 2,434.5 points. Meanwhile, midcaps and small caps also gained, climbing 0.5% to 5,540.8 points and 0.8% to 867.8 points respectively.

Advancers outnumbered decliners 172 to 82 with 65 unchanged in solid trading volume of roughly 425  million Eur.

National Bank of Greece finished 4.2% higher at 39.84 Eur after HSBC said it was their top pick and raised its target price to 48 Eur from 41 due to strong fundamentals and a compelling valuation.

Bottler Coca-Cola HBC led blue chip advancers, closing up 5% at 31.50 Eur on positive market sentiment. Meanwhile, lottery operator OPAP headed blue chip decliners, finishing 1.5% lower at 28.76 Eur on profit-taking.

EFG Eurobank closed 2.1% higher at 29.14 Eur after UBS initiated coverage of the bank at 'buy' with a target price of 36.1 Eur on its strong management and expansion potential.

Betting technology company Intralot closed just 0.8% higher at 24.14 Eur on mixed news that its unit in Turkey, Inteltek, signed a one-year contract with Spor Toto tp continue operations of the sports betting game from Friday.

Travel goods retailer Hellenic Duty Free Shops dipped 2% to 14.70 Eur after it announced full year group net profit increased 13.6% year on year to 43  million Eur against 37.9  million Eur in 2005, below expectations.

Its parent group, luxury goods retailer Folli Follie, also dropped, closing down 1.3% to 25.54 Eur on its announcement that full-year group net profit grew 17.7% year on year to 65.2  million Eur, slightly below expectations.

Home furniture retailer Fourlis finished 2.4% higher at 16.84 Eur after Deutsche Bank hiked its target price 6% to 19.2 Eur and kept the stock at buy, citing bright mid-to-long term growth prospects.

Into Spain now where Madrid's market closed slightly higher in volatile futures-driven trade, with Altadis down and Repsol YPF higher, both driven by vague M&A rumours.

The IBEX-35 index closed up 37.0 points at 13,977.4 after trading in a range of 13,866-14,039, on turnover of around 11.5  billion Eur.

The March future on the Ibex-35 expired at 13,989.0, up from 13,941 at Thursday's close, on around 10,726 contracts.

The IBEX-35 poked up into the black through the afternoon in brisk, futures-driven trade, fell back into negative territory for much of the afternoon after a lacklustre start on Wall Street, before once again rising at the close.

Altadis dropped 1.65 Eur or 3.63% to 43.75, after a rumour that the Franco-Spanish company may join up with Altria to bid for Imperial Tobacco, dampening expectations that Imperial's own 11.5  billion Eur bid for the Franco-Spanish company will be successful.

Altadis unit Logista rose 0.15 to 54.85, reversing earlier profit taking.

Repsol YPF jumped 0.74 or 3.16% to 24.16 after a late rumour that an unnamed private equity firm was considering making an up to 30 Eur per share bid for the oil giant.

Amongst selected constructors, Acciona outperformed, adding 2.95 or 2.01% to 150.05.

Sacyr gained 0.78 to 40.13, ACS was up 0.49 at 43.14, FCC rose 0.45 to 74.65 and Ferrovial rose 0.45 to 72.65.

Amongst heavyweight blue chips, Telefonica outperformed, rising 0.18 to 15.72, while main banks were lower, with BBVA off 0.03 at 17.68 and SCH falling 0.08 to 13.09.

Endesa fell 0.45 to 38.31.

Iberia rose 0.04 to 3.19 after announcing that it had settled an industrial dispute with cabin crews to cover the 2005-07 period.

Grupo Inmocaral rose 0.12 to 5.38, after the IBEX-35 technical advisory committee selected the stock to replace Fadesa in the blue chip index from March 21.

Fadesa rose 0.70 to 35.05, recovering from recent losses.

And last but not least in Europe, we turn to Italy where in Milan Share prices closed lower, falling after Wall Street's weak opening, and led by Pirelli on uncertainty on what it will do with its stake in Telecom Italia.

The Mibtel index fell 0.12% to 31,118 points and the S&P/Mib was down 0.12% to 39,868.

Volume was an estimated 6,860  billion Eur.

Pirelli lost 2.13% to 0.8305 Eur. Reports say that two Italian banking consortia are preparing bids to acquire all or part of Pirelli unit Olimpia, which owns 18% of Telecom Italia.

Telecom Italia was up 0.49% to 2.1375.

Among banks, Capitalia fell 1.63% to 6.225 and Mediobanca was down 1.03% to 16.06. These two banks are reportedly in one of the consortium aiming to take over Olimpia.

CR Firenze was a sharp gainer, up 5.88% to 5.22, on speculation that Intesa Sanpaolo will bid for the bank. One broker said a bid is unlikely to be priced at more than 5 Eur per share.

Intesa Sanpaolo lost 0.39% to 5.32.

Alleanza fell 1.27% to 9.37 after yesterday's results and comments. Exane BNP Paribas cut the stock to 'underperform', from 'neutral', on uncertainties on bancassurance.

On the positive side, utilities returned to favour as a safer haven and after ASM Brescia published results, seen by one broker as 'very good'.

ASM rose 2.99% to 4.3275, while its possible merger partner AEM was up 3.65% to 2.61, ahead of its results Monday and any merger comments.

Another north Italy utility Hera was up 5.21% to 3.0975.

Terna gained 2.86% to 2.6675. Enel gained 0.33% to 7.915.

Eni lost 0.09% to 23.06.

In the media sector, L'Espresso up 1.05% to 3.94. Brokers said remarks yesterday by main owner CIR on the 'theoretical' possibility of a bid for the media company buoyed the stock. CIR eased 0.07% to 2.845.

RCS added 0.24% to 3.9675 after results and a sharp cut in its dividend. One broker said RCS's net profit was well ahead of expectations.

Benetton lost 2.02% to 12.51. Brokers said it was a relief the company named a new CEO Gerolamo Caccia Dominioni after a four-month gap. Even if the new CEO is not well-known, he is seen as an effective communicator.

UK Market - HMV dropped to its lowest level for four years after a prediction from a leading broker that the retailer’s core business was in “terminal decline”.

This week’s profit warning and radical shift in strategy from Simon Fox, HMV’s new chief executive, underlined the extent to which the internet has changed the way music is consumed.

HMV closed 2% lower at 123¼p, its lowest level since May 2003.

The FTSE closed broadly flat at the end of a volatile week as investors’ attention turned to the horse racing at Cheltenham.

The FTSE 100 fell back 2.6 points at 6,130.6, leaving the index down 1.8% on the week.

The mid-cap FTSE 250 gained 49.7 points, or 0.4%, to 11,269.2.

However, it lost 1.4% for the week.

It being a Friday, there was no shortage of bid speculation.

Imperial Tobacco was again the biggest blue-chip riser, up 4.9% to £23.30, as speculation continued that Philip Morris International would bid for Imperial, the world’s No.4 tobacco company to prevent an £8bn takeover of Altadis of Spain. Peter Czerniawski, analyst at Dresdner Kleinwort, said Philip Morris could afford to pay £24 a share.

J Sainsbury, the retailer, rose 2.4% to 556p as Robert Tchenguiz, the financier, upped his stake to almost 4% and two more suitors were added to the list of potential buyers for Sainsbury.

Private equity investors, led by Bain Capital, is said to be putting together a rival consortium to the CVC-led group that is already considering bidding, while unconfirmed reports stated that Reliance Industries, of India, was in talks to buy a stake in Sainsbury, the UK’s No.2 listed supermarket.

Unilever, the Anglo-Dutch?consumer?group, was up 2.8% to £15.25, amid private equity rumours and hopes that the proposed sale of Cadbury Schweppes’s US drinks arm, under pressure from shareholders, could lead to a break-up of Unilever.

Andrew Wood, analyst at Sanford Bernstein, was not convinced. He argued that while a break-up of Cadbury was a “no brainer”, splitting up Unilever could be “complex and ugly given that management had just spent the last two years sewing all the pieces together”.

Hammerson, the property company, rose 3.6% to £16.00 as talk of a bid from French rival Unibail resurfaced.

Of the fallers, plumbing group Wolseley, badly hit by worries over the US housing market, lost 1.9% to £11.99 ahead of its interims on Monday.

In the mid-caps, PayPoint, the payment processing group, surged 18.5% to 678p as annual profits came in way ahead of expectations.

First Choice added 4.8% to 284p amid talk of an imminent 300p a share bid. Private equity groups were in the frame this week, as was Sergio Mantegazza, the Swiss billioniare. There was talk that Mr Mantegazza could look to merge First Choice with his Monarch airlines operation. Vague bid speculation also sent Regus, the serviced offices group, 5.1% higher to 129¼p, while Premier Oil gained 2.9% to £11.75 amid rumours that the Middle East consortium that tried to buy the exploration company last year could return with a hostile bid.

London Stock Exchange weakened 0.6% to £12.13 as index tracker funds trimmed their positions ahead of a change to the exchange’s free float, which takes effect from the close last night. C&C Group was the centre of much speculation, as the maker of Magners cider rallied 7.5% to €10.59 in heavy volume of more than 20m shares.

Japan & Asia Pacific - Shares across the Asia-Pacific region closed mostly lower on investor caution ahead of the release of US economic data yesterday evening and next week.

In Japan , Tokyo shares ended lower after investors locked in profits on Thursday's gains, showing their anxiety about the health of the US economy.

The blue-chip Nikkei 225 Stock Average closed 116.24 points or 0.69% lower at 16,744.15, off a low of 16,643.76 and a high of 16,939.43. Over the week, the index lost 2.45%.

The TOPIX index of all first-section issues slid 17.12 points or 1.01% to close at 1,677.06, off a low of 1,671.19 and a high of 1,696.75. Over the week, the index fell 3.08%.

Market watchers said they expect the Nikkei 225 to trade between 16,500 and 17,000 points next week. The market will be closed Wednesday for a public holiday.

Hong Kong Share prices closed little changed after a choppy session as investors turned cautious ahead of results announcements from several blue chip heavyweights next week.

Hutchison Whampoa, Cheung Kong, China Mobile and PetroChina are among the companies due to announce their 2006 results next week.

The Hang Seng Index closed down 15.94 points or 0.08% at 18,953.50, after moving to a low of 18,770.28 and high of 19,130.10.

For the week, the index was down 181.38 points or 0.95%, marking the third straight weekly fall.

Turnover Friday was 43.35 billion Hong Kong Dollars.

On the Mainland, Chinese stocks fell Friday as economic data and official comments spurred speculation authorities might move soon to tighten credit.

The benchmark Shanghai Composite Index slipped 0.7% to 2,930.48. The Shenzhen Composite Index fell 1.4% to 774.77.

Central bank governor Zhou Xiaochuan said Friday that the bank was studying ways to combat inflation, triggering renewed speculation over a possible interest rate hike.

Meanwhile, a stronger-than-expected rise in investments in construction and plant equipment, a measure known in China as "fixed-asset investment," added to those expectations.

Chinese regulators often choose to announce such measures on the weekend, to minimize repercussions for financial markets.

On Friday, institutions trimmed holdings of blue chips.

China Merchants Bank fell 1.8% to 15.52 RMB, China Petroleum & Chemical fell 1.4% to 8.62 RMB and China Yangtze Power dropped 1.3% to 11.99 RMB.

China-listed firms have to report 2006 earnings by the end of April, so investors will likely to try to avoid taking extreme positions until then.

Into South Korea where The Seoul stock exchange ended marginally higher Friday as tech shares, including Samsung Electronics, propped up the market.

The benchmark KOSPI index edged up 0.95 points or 0.07% to 1,427.88. Trading volume reached 295.05 million shares worth 2.46 trillion won ($2.6 billion).

Top IT company Samsung Electronics gained 0.51% to 589,000 Won. LG Philips LCD, the world's No. 2 maker of liquid crystal displays, jumped 2.4% to 32,000 Won. LG Electronics went up by 1.07% to 56,900 Won.

Hyundai Mipo Dockyard, the world's fourth-largest shipyard, advanced 1.43% to 141,500 Won. The shipyard announced on Thursday it had clinched a 719.9-billion-Won order from a Middle Eastern firm for 10 car and truck carriers.

Philippine shares also rebounded Friday on bargain hunting in Philippine Long Distance Telephone Co. following two sessions of losses.

The benchmark 30-company Philippine Stock Exchange Index gained 18.64 points, or 0.6%, at 3,062.25, after losing 4.3% during the past two sessions.

The latest budget data, released shortly before the market opened, may have helped prop up market sentiment

The Philippine government said its budget deficit narrowed to 18.6 billion pesos ($387 million) in the two months to February, owing to the sale of the government's indirect stake in PLDT and a marginal rise in spending.

The government registered a deficit of 40.4 billion pesos ($841 million) in the January-February period last year.

PLDT was the most active issue, up 1.1% at 2,285 pesos, on bargain hunting.

Mining stock GEOGRACE Resources Philippines Inc. rose 6% to 1.42 pesos on its planned stock rights offer.

Taiwan shares also rose slightly Friday, boosted by favorable Chinese comments on ties with the island.

The Weighted Price Index of the Taiwan Stock Exchange rose 23.84 points, or 0.3%, to close at 7719.80 in moderately heavy volume.

Friday's big winners included Leofoo Development, which rose 2.3% to close at New Taiwan Dollars 24.10; China Airlines, up 2.1% to NT$14.85; and bottler Taiwan Hon Chuan Enterprise, up 4% to NT$30.25.

Thailand 's shares slipped 0.5% to 671.05 points in light trade on profit taking in blue chips.

Indonesian shares rose 0.6% in thin trading to close at 1,786.44 points, amid buying in mining blue chips.

Malaysian shares climbed as local funds propped up select blue chips in the construction and finance sectors. The Kuala Lumpur Composite Index of 100 blue chips rose 0.2% to 1,182.20 points.

Indian shares moved down, led by banks and cement stocks after official data showed an increase in the country's inflation, raising concerns of further monetary tightening by the central bank. The Bombay Stock Exchange's 30-stock Sensitive Index, or Sensex, dropped 113.45 points, or 0.9%, to 12,430.40.

Singapore shares also fell in a continuing market correction, and traders expect the slide to continue. The benchmark Straits Times Index fell 25.9 points, or 0.8%, to 3,068.75.

Australian stocks ended slightly lower Friday after mixed performances in the heavyweight banking and resources sectors.

The benchmark S&P/ASX index ended down 16.7 points to 5836.3 while the all ordinaries slipped 14 points to 5817.8.

On the Sydney Futures Exchange, the June share price index contract was trading steady at 5876 on a volume of 18,944 contracts.

Commonwealth Bank was 53 cents poorer at $49.05 and NAB surrendered 22 cents to $40.15, but Westpac swelled 11 cents to $25.76 and ANZ advanced 10 cents to $28.95.

The world's biggest miner BHP Billiton lifted 29 cents to $27.80 and rival Rio Tinto found 36 cents to $73.70.

But among energy interests Santos relinquished three cents to $9.68 and Woodside Petroleum shed 20 cents to $36.10.

Gold miners were mixed, with Lihir dropping one cent to $3.09 and Newcrest swelling 64 cents to $21.94.

Retailer Coles managed to end steady at $15.80, after its management met to discuss emails released by the media suggesting the company may have mislead the market about it sales performance, a claim that has attracted the attention of the corporations watchdog.

Larger rival Woolworths lost 22 cents to $27.74 and smaller peer David Jones gave back one cent to $4.45.

National carrier Qantas ended the week up two cents at $5.14, after a week of trying to convince shareholders to accept a takeover offer from a private equity predator.

Telecommunications giant Telstra dropped one cent to $4.29.

Major media plays also ended lower, News Corp (parent company of the publisher of NEWS.com.au)down 44 cents at $29.91, its non-voting stock backtracked 43 cents to $28.32, PBL retreated 32 cents to $18.81 and Fairfax was five cents weaker at $4.62.

The most traded stock by volume was Broad Investments, which was 0.2 cents higher at 1.2 cents a share before the company was put in a trading halt at 11.31am AEDT.

The New Zealand sharemarket drifted as cautious Asian and Australian investors failed to draw comfort from a recovery on Wall St.

The NZSX-50 index closed down 0.41% or 16.6 points to 4037.59 on total turnover worth $125.7 million, about half of which was in Telecom.

Thin volume was a feature of some of the soggier stocks, including Canwest Mediaworks down 5c to 210, Fletcher Building down 8c to 1082, Port of Tauranga down 15c to 580, and Trustpower down 17c to 803 after performing strongly earlier this week.

Auckland Airport touched a new record high of 242 before closing 3c up at 241 .

Other moves included Contact down 14c to 899, Pumpkin Patch down 10c to 435, Hallenstein Glassons up 9c to 510, and F&P Healthcare up 3c to 387.

Commodities - Base Metals rallied strongly this week in spite of the volatility affecting equities, while oil prices found support from evidence that the crude market is tightening rapidly.

The Organisation of the Petroleum Exporting Countries agreed to keep Oil production levels unchanged at its meeting in Vienna this week after judging that its previous cuts, totalling 1.7m barrels a day, were sufficient to balance the market.

However, the International Energy Agency said the cartel would have to increase supplies later this year after noting that OECD stocks were heading for the largest first-quarter fall for 10 years.

ICE May Brent rose 60 cents to $61.28 a barrel Friday, and was up 0.3% over the week, while Nymex April West Texas Intermediate added 25 cents to $57.80 a barrel to close 3.8% down on the week.

Crude has also been bolstered by strength in gasoline. Nymex April US RBOB gasoline rose 1.3% to $1.9273 a gallon this week. US gasoline stocks have been falling rapidly as refineries undergo an unusually heavy maintenance round, and further unscheduled disruptions have hampered production.

US refinery utilisation dropped to 85.6% last week and this is pushing up refining margins. The gasoline crack spread – the differential between gasoline and crude – traded at $23.11 Friday after doubling over the past four weeks.

Nickel surged 12.5% to $47,700 a tonne this week after hitting a record $48,550 Friday. Traders are asking whether nickel’s record-breaking rally will run out of steam approaching $50,000 as stainless steel makers increase substitution.

However, demand growth remains robust, and inventories are critically low with just 2,418 tonnes available, so the market tightness looks set to continue.

Copper jumped 8% to $6,620 a tonne this week, supported by substantial stock declines and the return of Chinese buyers. China’s industrial output increased 18.5% year-on-year in January and imports are rising to make up for a sluggish supply response from domestic base metals production.

Tin rose 1.5% to $13,850 this week as LME stocks shrank to the lowest level since November 2005. Supply concerns are being fuelled by uncertainty over when smelters on Indonesia’s Bangka island will resume production.

Aluminium gained 3.5% to $2,812.5 a tonne this week, supported by news from Ghana of an indefinite shutdown, due to power shortages, of the 400,000 tonne a year Valco smelter.

Zinc underperformed, ending the week flat at $3,260 a tonne, with sentiment undermined by rising stock levels and a surge in exports from China.

Gold firmed 0.4% to $652.50 a troy ounce. CPM, the commodities consultant, has forecast that investors will add another 39.7m ounces to their gold holdings this year, down from 43.5m last year, but high compared to historic standards.

Currencies - The Dollar tumbled to a three-month low against the Euro and the Swiss franc this week amid concerns over the health of the US economy.

The Dollar fell 1.5% to $1.3310 against the Euro over the week, and lost 2.2% to SFr1.2070 against the Swiss franc.

The Dollar also dropped 1.2% to Y116.80 against the Yen and falling 0.5% to $1.9440 against Sterling.

Some analysts put the Dollar’s weakness down to nervousness that problems in the US subprime mortgage market could spill over into the wider economy.

Alan Greenspan, former chairman of the Federal Reserve, highlighted the fears on Thursday, warning that foreclosures in the US subprime market could have a broader effect: “You cannot take 10% out of mortgage origination without some impact.”

Since the start of the turmoil in the currency markets at the end of February, the Dollar’s fall had been largely confined to the lower-yielding currencies as carry trades came under pressure.

Low-yielding currencies have benefited from the recent rise in risk aversion as investors unwound carry trades, in which riskier high yielding assets are funded by selling low-yielding currencies such as the Yen and the Swiss franc.

A true carry trade unwind is an irrational closing of positions due to fear. What we are seeing with Dollar/Yen at the moment is a rational result of reduced expected returns.”

The Dollar’s relative strength amid the recent turbulence in equity markets has been understandable as investors sought the safe haven of US Treasuries and, by default, bought Dollars.

But once the dust has settled, the market will have to decide what to do with those Dollars. That is when we might get a true carry trade unwind and the Dollar could fall heavily across the board.

There were signs on Friday that the process might have started, as the Dollar slid against the Euro and Sterling, having held up okay during the rest of the week.

The Yen endured a volatile week amid large swings on global stock markets.

The Yen peaked at Y115.75 against the Dollar, Y152.69 against the Euro and Y222.69 against Sterling on Wednesday as global equities dived.

The Yen gave back most of its gains later in the week as stock markets stabilised.

Over the week, the Yen fell 0.2% to Y155.42 against the Euro, but rose 0.4% to Y227.20 against Sterling.

In other currencies, The Rand on Friday extended losses against the Dollar to over one% in a market still nervous about risky assets in the aftermath of a recent sell-off that hit global financial markets.

The Rand was last at R7.47 versus the greenback after earlier dipping to R7.4925 compared to a close of R7.4150 in New York on Thursday.

Reserve Bank of Australia Assistant Governor Malcolm Edey yesterday warned that the outlook for inflation was still higher than ideal. He said the factors that last year pushed up underlying inflation, and which precipitated rate increases, remained.

The Australian Dollar jumped higher after Mr Edey's remarks, hitting a high of 79.07c US, up from its local close Thursday at 78.57.

The New Zealand Dollar was buying 69.56 US cents, 87.86 Australian, 35.87 pence, 81.38 Yen and 0.5229 Euro.

The Canadian Dollar rose slightly against the US currency on Friday, driving higher before the start of the North American session, but then giving back most of the gains as oil prices eased. The currency finished at C$1.1752 to the US Dollar, or 85.09 US cents, up from C$1.1764 to the US Dollar, or 85.01 US cents, at Thursday's close.

Closing out currencies here in China. the RMB finished at another new record high of 7.7360 to the Dollar on the over-the-counter (OTC) market Friday, up from Thursday's close of 7.7440.

On the exchange-traded market, the RMB finished at 7.7330, also an all-time high, and up from 7.7430 Thursday.  The RMB traded between 7.7435-7.7350 in the OTC market and 7.7440-7.7330 in the exchange-traded market.

China - China's legislators Friday passed a law providing the most sweeping protection for private businesses and property since the nation's move toward a more capitalist-style economy beginning in the late 1970s.

The law offers the same protection for private and public property, a recognition of the private sector's rise since the start of economic reforms. The private sector, including foreign investment, has grown to account for 65% of gross national product and up to 70% of tax revenues.

The measure was strongly opposed by a small but highly influential group of scholars and retired communist officials, who called it a threat to the state's guiding role and a vehicle for unrestrained privatization that will feed a growing income gap between rich and poor.

"The law basically ignores the constitution's upholding of socialist public property as sacred and not to be violated," said Gong Xiantian, a Beijing University professor.

Such opposition and the communist leadership's ambivalence about reducing the primacy of state property caused the law to be kicked around for 14 years before a final version was submitted this year. It passed in a vote of 2,799 delegates in favor with 52 opposed and 37 abstaining on the final day of the annual two-week session of the National People's Congress.

Perhaps aiding the law's passage was the status of state industries, which have shed influence along with employees of late. China's labor minister said earlier this week that jobs need to be found this year for another 5 million laid-off state enterprise workers.

Along with private businesses, the law also aims to bolster the rights of house buyers who have pushed the urban home ownership rate to more than 80%, as well as farmers who have frequently lost their land to infrastructure and housing projects, with little or no compensation.

The legislature also passed a new tax law that unifies the tax rate for foreign-financed companies with those of Chinese enterprises at 25%, ending an era that saw China create special economic and technology zones with low taxes to attract nearly $700 billion in foreign investment that fueled this nation's rise to become the world's fourth-largest economy.

Under the old system, Chinese companies paid 33% of profits in tax, while new foreign investors were exempt from taxes for two years, get a 50% cut for three more and after that could receive breaks that kept rates as low as 10%.

That system had led to frequent complaints about unequal treatment.

Meanwhile, China's Premier Wen Jiabao said at a news conference at the end of the legislative session that the world should not fear China's military rise. He also repeated attacks on old foes Taiwan and the Dalai Lama.

Wen said China is opposed to the militarization of outer space despite a recent test of an anti-satellite weapon that prompted international criticism. He said the January test that destroyed a defunct Chinese weather satellite was not targeted at any other nation and did not violate any international treaties.

"China always advocates for the peaceful utilization of outer space and we are always opposed to an arms race in outer space," Wen said, adding Beijing was repeating its calls for an international convention banning weapons in outer space.

Wen also said China's military budget, which was boosted by 17.8% this year, was smaller than other developed countries on both an aggregate and per capita basis.

Regarding Taiwan, Wen said China had not changed its stance.

"We are strongly opposed to any secessionist activities aimed at achieving Taiwan independence," Wen said of the self-ruled island that Beijing considers part of its territory.

But he said China was willing to have a dialogue with the Dalai Lama as long as he gives up efforts for Tibetan independence.

"As long as the Dalai Lama recognizes that Tibet is an inalienable part of Chinese territory ... and as long as the Dalai Lama gives up his efforts to split the county, we will be in a position and we are willing to have consultations and dialogue," Wen said. "The door is always open."