US Markets - The biggest rally in four years for the Standard & Poor's 500 Index Friday helped the US stock market wipe out most of the week's losses after the Federal Reserve reduced the discount loan rate.

Merrill Lynch & Co., JPMorgan Chase & Co. and Lehman Brothers Holdings Inc. led financial shares to their steepest two-day rally since 2002. Exxon Mobil Corp., the largest oil company, gained the most in five years on speculation energy demand will increase in an expanding economy.

The S&P 500 climbed 34.67, or 2.5 percent, to 1,445.94, paring its loss for the week to 0.5 percent. The Dow Jones Industrial Average increased 233.3, or 1.8 percent, to 13,079.08. The Nasdaq Composite Index rose 53.96, or 2.2 percent, to 2,505.03.

Financial stocks in the S&P 500, the year's second worst- performing group, rose 3.6 percent. Merrill Lynch gained $4.91 to $76.04. JPMorgan advanced $1.54 to $47.01. Lehman added $3.36 to $58.11. Two-year Treasury notes increased, pushing the yield down 6 basis points, or 0.06 percentage point, to 4.17 percent.

The S&P 500 Thrifts & Mortgage Finance Index added 5 percent, led by Countrywide Financial Corp., which increased $2.48, or 13 percent, to $21.43, the most in seven years.

The biggest US mortgage lender was upgraded to ``neutral'' from ``sell'' at Banc of America Securities LLC. Analysts including Robert Lacoursiere said the possibility of a ``liquidity-induced distressed sale'' is unlikely.

The other nine S&P 500 industries also rose, led by energy, utility and industrial shares, as investors speculated the economy's expansion is intact. All 32 companies in the S&P 500 Energy Index climbed. Exxon Mobil rose $3.47, or 4.3 percent, to $84.14. ConocoPhillips, the second-largest US refiner, advanced $1.85 to $79.13.

Consumer confidence dropped to the lowest in a year, according to the Reuters/University of Michigan index. The gauge fell to 83.3 from 90.4 a month earlier. Economists forecast the confidence measure would fall to 88, based on the median estimate in a Bloomberg survey.

The main measure of US stock volatility declined after reaching a four-year high yesterday. The Chicago Board Options Exchange Volatility Index, known as the VIX, slipped 2.7 percent to 29.99. Lower readings show traders expect smaller share-price swings in the next 30 days.

Trading in the US was also increased by the expiration of options tied to indexes and individual stocks. Some 2.48 billion shares changed hands on the New York Stock Exchange, 41 percent more than the three-month average.

More than six stocks advanced for every one that declined on the New York Stock Exchange.

Hewlett-Packard Co. gained $1.10 to $47.15. The world's largest personal-computer maker forecast profit for this quarter between 80 cents and 81 cents a share, exceeding the average estimate of 78 cents a share from analysts polled by Bloomberg.

Huntington Bancshares Inc. rose 75 cents to $18.13. Ohio's fourth-largest bank said its mortgage customers were making fewer late payments even as baNKruptcies and foreclosures climbed in the Midwest. The bank also said it has no subprime loans, given to borrowers considered at the highest risk of default.

Dell Inc. gained 39 cents to $26.32. The second-largest personal-computer maker completed a yearlong investigation into accounting errors and admitted executives manipulated financial results to meet quarterly earnings goals. The company said it would restate results between fiscal 2003 and the first quarter of 2007.

E*Trade Financial Corp. rose 95 cents to $14.50. The brokerage said almost all of its mortgage-backed securities have the highest rating. The company's comments should give ``comfort to investors,'' Lehman Brothers analyst Roger Freeman wrote in a research note.

Research In Motion Ltd. gained $22.50 to $220.52. The maker of the BlackBerry e-mail phones will forecast third-quarter earnings that will ``blow away'' estimates, Herb Weiss, an analyst with American Technology Research, wrote in a note.

Whole Foods Market Inc. climbed $3.13 to $44.30. A judge ruled the natural-food grocer's purchase of rival Wild Oats Markets Inc. doesn't violate antitrust laws and can proceed. Wild Oats jumped $2.71, or 18 percent, to $17.92, the biggest increase since 2002.

The Russell 2000 Index, a benchmark for companies with a median market value of $639 million, gained 2.2 percent to 786.03. The Dow Jones Wilshire 5000 Index, the broadest measure of US shares, rose the most since 2003, advancing 2.4 percent to 14,531.52.

European Markets - European equity markets rebounded Friday but sentiment remained fragile after a torrid week when the re-pricing of credit risk forced widespread selling by hedge funds and other leveraged investors.

The FTSE Eurofirst 300 rose 32.68 points, or 2.3%, limiting its losses over the week to 0.4%. Before the rally, European equities had moved into “correction” mode with a fall of 11.6% between their high in mid-July and Thursday’s close.

Concerns about credit market conditions were amplified by UBS, which issued a profits warning on Tuesday, saying further turbulence could hit investment banking earnings.

The world’s biggest wealth manager indicated that the marked increase in market volatility wiped more than SFr250m from its trading book on at least one day in the third quarter. UBS fell 3.4% to SFr63.10 this week.

Let's start in France where Paris Share prices closed sharply higher as the Federal Reserve's decision to cut its discount rate, citing increasing risks to economic growth from current market turbulence, sparked a rebound led by financial stocks.

The CAC-40 index finished up 98.16 points or 1.86% at 5,363.63.

Among CAC-40 stocks, 30 closed higher and 10 closed lower.

On the broader indices, the SBF-80 index closed up 88.07 or 1.40% at 6,386.85 while the SBF-120 ended 69.09 or 1.80% higher at 3,906.87.

Friday afternoon's rebound helped reduce losses over the week, although the CAC-40 was still down 205.65 points or 3.69% compared to last Friday's closing level of 5,569.28.

The CAC-40 jumped by over 3% in afternoon trading, crossing the 5,400-point mark, as shares rebounded in spectacular fashion.

Financial stocks, which had already recovered some ground yesterday morning, soared on the news. BNP Paribas was up 3.53 Eur or 4.73% at 78.20, Societe Generale was 4.28 or 3.76% higher at 118.16, Credit Agricole added 0.98 or 3.73% to 27.28, Dexia rose 0.61 or 3.18% to 19.78, while investment bank Natixis jumped 0.73 or 5.20% to 14.78.

Insurer Axa rose 1.24 or 4.46% to 29.02 while property group Unibail-Rodamco climbed 8.14 or 5.03% to 169.89, making it the biggest bluechip gainer at the close.

Car makers Renault -- up 2.75 or 3.02% at 93.95 -- and Peugeot -- 1.38 or 2.42% higher at 58.30 -- also rebounded after suffering heavy losses during the week like a number of consumer-related stocks, amid fears the subprime crisis would hit the wider economy.

Oil stocks similarly regained ground, in line with an upturn in crude prices after yesterday's steep fall, which had been partly driven by fears of the global economy being hurt by the credit squeeze.

Total added 1.50 or 2.92% to 52.94, while pipe maker Vallourec rose 3.45 or 2.01% to 175.30.

At the height of the August holiday period, there was very little company newsflow.

Ipsos added 0.60 or 2.45% to 25.10 after reporting strong first-half sales growth and raising its full-year organic growth target to 'at least 9%' versus around 8% previously.

GFI Informatique dropped 0.22 or 3.05% to 7.00 as speculative interest continued to fade after chairman Jacques Tordjman told Les Echos yesterday that a merger with fellow French IT services group Bull SA is 'no longer a priority'.

Into Germany now where in Frankfurt German shares also closed higher, led again by financial stocks.

The DAX rose 108.22 points or 1.49% to 7,378.29, after trading between 7,190.36 and 7,497.65.

The MDAX added 4.02 points or 0.04% to 9,512.15, while the TecDAX added 11.60 points or 1.39% to 844.70.

DAX futures were down 3.00 points or 0.04% at 7,417.00, while bund futures lost 0.27 or 0.24% at 113.30 points.

Commerzbank was the biggest gainer, adding 1.17 Eur or 4.05% at 30.06, followed by Hypo Real Estate up 1.47 or 3.92% at 38.99, Deutsche Postbank up 2.01 or 3.87% at 54.00, Allianz up 5.39 or 3.53% at 158.03 and Deutsche Bank up 3.20 or 3.49% at 94.85.

On the downside, Continental AG fell 0.35 Eur or 0.39% at 89.20, with MAN following closely with a decline of 0.33 or 0.34% at 95.44.

Car stocks were trading on negative terrain for much of the day but closed higher, though gains were trailing behind the average blue chip board.

Deutsche Boerse was up 2.27 or 3.04% at 77.00 after WestLB raised its stance on shares in the German stock market operator to 'add' from 'hold' and marginally lifted its target price to 84 Eur per share from 83.

Merck KGaA, up 2.77 or 3.09% at 92.30, was helped by a Goldman Sachs note which said it was resuming its coverage of the stock with a 'buy' rating and a 112 Eur per share target price. The broker also added the stock to its 'conviction buy list', saying that a recent drop in its share price has set up the chemical/pharma company for a sharp rebound.

Deutsche Telekom improved 0.12 Eur or 0.92% at 13.19. CEO Rene Obermann reiterated the company's commitment to cost-cutting measures.

Over on the MDAX, Kloeckner & Co lost 2.41 or 6.02% at 37.60. The company announced soon after the bourse closed that it has raised its stake in the Bulgarian peer Metalsnab Holding AD by 70 percentage points to 77.3%.

Wincor Nixdorf was the best performer, adding 3.39 or 5.84% at 61.44.

On the TecDAX, ADVA was up 0.63 or 11.13% at 6.29 while QSC dropped 0.24 Eur or 6.19% at 3.64.

In The Netherlands , Amsterdam shares closed higher for much the same reason as other markets, with ABN Amro and other blue-chip financial stocks leading gainers.

The AEX closed 11.94 points or 2.45% higher at 499.00 after opening at 485.35 and trading in a range of 479.49-506.90.

Financials gained strongly on the news, led by ABN Amro, which finished 5.96% higher at 33.75 Eur, while Aegon gained 4.16% at 13.27 and ING put on 3.95% 29.47. Fortis added 3.39% at 26.80.

Peer midcap financial, SNS Reaal also closed strongly higher, up 7.42% at 15.20 Eur. The bancassurer also reported better-than-expected first half earnings yesterday.

Blue chip property stock Unibail-Rodamco also posted strong gains, putting on 5.25% at 170.25. Midcap property stock Corio rose 2.55% at 51.30.

AEX heavyweight Royal Dutch Shell lifted 2.97% at 27.02, while oil services group SBM Offshore put on 2.16% at 26.84.

Other leading blue chip gainers were TomTom, which put on 2.58% at 43.20, while KPN rose 2.50% at 11.47 and Reed Elsevier gained 2.08% at 12.76.

On the midcap, trading company Binckbank gained 3.46% at 13.44 Eur, Aalberts Industries rose 2.44% at 17.19 following positive broker comments on its first-half results and Wessanen put on 2.08% at 10.77.

CSM gained 0.08 Eur at 24.38, recovering from losses this week after disappointing first half results and withstanding a target price downgrade to 28 Eur at UBS. 

Local issue VastNed Retail gained 2.20% at 54.68 Eur after announcing it is buying back 500,000 shares, while VastNed Offices/Industrial put on 0.49% at 22.40.

Among decliners, Hagemeyer fell 8.73% on the AEX at 3.03 Eur, unable to be lifted amid the afternoon's improved sentiment after its 'weak' first half results and news that its CEO said the company is 'absolutely not for sale'.

Corporate Express closed 2.00% lower at 8.30.

On the midcap, construction stocks closed lower, led down by Heijmans, losing 3.58% at 36.82, while BAM lost 1.94% at 18.69 amid news it won a 90  Million stg (130  Million Eur) island development contract in Liverpool.

Into Belgium now where in Brussels Shares closed higher, with discount supermarket chain Colruyt the biggest gainer, followed by financials KBC Group and Dexia, as the index recovered from Thursday's losses.

At the close, the Bel 20 was up 81.42 points or 2.04% at 4,070.48.

Bancassurance group KBC led the financials, climbing 2.70 Eur or 3.12% to 89.15. The company said earlier today it has increased its stake in Bulgaria's DZI Insurance to 80.46% from 70%.

Dexia was up 0.59 Eur or 3.07% at 19.78. Fitch Ratings said it has affirmed the Franco-Belgian banking group's long-term issuer default rating (IDR) at 'AA+' and short-term IDR at 'F1+', citing its dominant position in European public finance, its relatively stable and solid profitability, excellent asset quality and strong capitalisation.

Belgo-Dutch bancassurance group Fortis rose 0.76 Eur or 2.93% to 26.70. Fortis Real Estate, a fully owned subsidiary of Fortis NV plans more international expansion, said the chief executive of the division, Alain Devos, in an interview with Belgian financial daily L'Echo.

Discount supermarket chain Colruyt was the market's biggest gainer, jumping 5.59 Eur or 3.87% to 150.09.

Supermarket peer Delhaize was up 1.36 Eur or 2.14% at 64.99 after brokerage KBC Securities said the recent share price drop was 'excessive' and the stock now represents a 'bargain opportunity'.

Ackermans van Haaren was up 1.68 Eur or 2.61% at 66.13. Petercam increased its rating of the holding company to 'add' from 'hold' ahead of first half-year results, due to be announced before the market opens on Sept 5.

Following a strong day Thursday, telecoms companies underperformed the market. Belgacom rising 0.33 Eur or 1.16% to 28.86 and Mobistar up 0.53 Eur or 0.95% at 56.60. Brewer InBev was up 0.60 Eur or 1.13% at 53.87.

Commercial real estate company Cofinimmo bucked the upward trend of the market, falling 2.05 Eur or 1.72% to 116.95.

UCB was down 0.26 Eur or 0.63% at 41.33. The pharmaceuticals group said its subsidiary Schwarz Pharma has submitted an application for marketing authorization for its lacosamide drug to the European Medicines Agency (EMEA).

Umicore was down 0.50 Eur or 0.36% at 139.79. The speciality metals group's buy of Delphi Corp's automotive catalyst business was approved by US baNKruptcy court yesterday.

Outside the Bel 20, EVS Broadcast Equipment closed down 0.22 Eur or 0.35% at 63.31. Earlier Friday, ING Securities lifted its target price on the company to 80 Eur from 54 and reiterated its 'buy' rating on the faster-than-forecast transition from tape to server technology, the 2008 outlook ahead of the Beijing Olympics, and its growing appeal as a takeover target.

Pharmaceutical group Galapagos fell 0.25 Eur or 3.70% to 6.50. Gas transport company Fluxys closed down 59.99 Eur or 2.44% at 2400.01. Telenet closed up 0.31 Eur or 1.36% at 23.05. The Flemish telecoms group said shareholders approved its debt restructuring plan.

Across into Switzerland now where in Zurich the Swiss Market Index was 120.75 points or 1.4% higher at 8,543.03, while the Swiss Performance Index rose 86.33 points to 6,936.40. The Euro fell to 1.6254 SFr, while the Dollar dropped to 1.2048 SFr.

Credit Suisse surged 3.4%, or 2.60 SFr to 79.75 SFr, and UBS gained 2.1% or 1.30 to 63.10, as banking stocks across Europe pulled back from recent losses.

Julius Baer closed 1.40 SFr higher at 74.65.

Zurich Financial rallied strongly, rising 2.5% or 8 SFr to 331, extending yesterday's gains following solid first-half results, while Swiss Re climbed climbed 2.4% or 2.30 SFr to 98.55.

Luxury goods stocks were also back in favour, with Swatch up 2.9% or 9.75 SFr at 344.50, and Richemont up 2.8% or 1.95 SFr at 71.45.

On the other side of the spectrum, Ciba was down 3.2% or 2.05 SFr at 61.20, extending yesterday's falls after the Swiss speciality chemicals group's second-quarter results fell significantly below expectations, while fellow chemical Clariant was off 0.40 or 2.6% at 15.25 SFr.

Among the market's heavyweights, Nestle was 6.50 SFr up at 487.50. Novartis was up 0.50 at 63.25 SFr, and Roche up 1.10 SFr at 206.30 SFr.

Elsewhere in the healthcare sector, Nobel Biocare gained 1.75 to 303.75 SFr, recovering from yesterday's fall after a German court ruling found the group in breach of patent law.

Outside the SMI, shares of elevator and escalator maker Schindler were down 0.90 at 72.20, as investors mulled the group's first-half results, which managed to beat forecasts but still lag behind the strong numbers released earlier by some of its rivals.

With sales growth of about 13% in the elevator & escalator business, Schindler is less dynamic than competitors Otis and Kone, Bank Vontobel said.

Starrag-Heckert, which also reported interim results today, was 11 SFr higher at 730.

The machine tools maker earlier today said net profit rose 58% to 5.7  Million SFr on the back of strong demand in all market segments and regions.

Major losers also included Von Roll which fell 7.3% or 0.76 to 9.69 SFr, after naming Thomas Limberger as its new chief executive, following the takeover of the Swiss engineering group's board by the von Finck group of shareholders earlier in the week.

In Austria , Vienna bucked the European trend and shares closed lower, with declines by ATX heavyweight Erste Bank and industrial share A-TEC leading the blue-chip index to close slightly lower after an exceptionally volatile day of trading on the Vienna bourse.

The ATX closed down 0.33% or 14.23 points at 4,283.05. The ATX Prime closed down 0.46% or 9.68 points at 2,116.51.

Into Scandinavia now and starting off this week in Denmark where Copenhagen shares finished the day higher led by Topdanmark.

The OMXC20 index was up 8.91 points at 461.70 and the OMXCB Benchmark index gained 8.20 points to 444.71.

The OMXC All Share index closed up 7.30 points at 456.79, on turnover of 9.34  Billion DKr.

Topdanmark was up 45.00 DKr at 895.00.

Coloplast gained 17.00 DKr to 496.00. SEB Enskilda raised its recommendation for the health care group to '1/Buy' from '2/Hold' following its 9-months report Thursday.

William Demant added 4.50 DKr to 494.50. Jyske Bank downgraded the hearing aid maker's shares to are duce' from 'accumulate', citing yesterday's weaker-than-expected first half report.

AP Moller Maersk was up 1,200 DKr at 64,000. The group said oil production at its partly-owned Dansk Undergrunds Consortium (DUC)'s oil fields in the North Sea increased 3% to 279,100 barrels per day in July from June.

Among other shares, Vestas Wind Systems gained 7.00 DKr to 304.00, Novozymes was up 23.00 DKr at 611.00 and Sydbank added 9.25 DKr to 252.00.

Sweden saw Stockholm shares pull ahead in line with the regional markets. The OMX Stockholm index closed up 1.52% at 375.11, while the OMX Stockholm 30 index ended 1.55% higher at 1,163.21. Turnover amounted to 43  Billion SKr.

The main sector movers were industrials, which closed up 1.51%; banks, up 3.70%; and technology hardware and equipment, 1.45% higher.

The major movers within these sectors included Scania B, down 5.81% at 146 SKr; SEB A, up 6.01% at 220; and Ericsson B, up 1.42% at 24.30.

SEB was supported by M&A speculation after reports a large 1.8% stake changed hands today. Yesterday, Investor said it has hiked its holding in the bank.

OMX closed up 1.31% at 232, amid doubts whether rival bidder Nasdaq -- which has bid around 200 SKr per share -- will increase its offer to compete with Borse Dubai's as-anticipated 230 SKr per share bid, which was lodged yesterday morning.

Lundin Petroleum closed up 0.85% at 59.25. The Lundin family said it has bought 2  Million shares in Lundin Petroleum AB, hiking the total holding of all the family's investment companies to 87.2  Million shares or 27.64% of the share capital.

Nordea closed up 2.80% at 106.30. Sampo Oyj has amassed a 5.44% voting stake in Nordea AB, according to a filing with Sweden's FSA.

Sampo passed the 5% limit on Aug 16; previously, it held no shares in Nordea.

In Norway , Oslo shares were not going to buck the trend and ended up led by oil stocks Statoil and Norsk Hydro.

The OSEBX Benchmark index closed 2.65% higher at 451.90 points, while the OSEAX All Share index rose 2.64% to 523.54 points.

Total turnover amounted to 20  Billion NKr.

The Norwegian stock market ended Friday in a complete reversal of the Thursday broad-based selloff which saw the OSEBX Benchmark index 3.9% lower.

Among heavyweight gainers of the Friday session were oil producers with Norsk Hydro up 4.1% to 204.50 NKr, while Statoil put on 2.45% to 156.75 NKr, both also helped by an improved oil price.

In the oil services sector, Petroleum Geo Services surged 6.6% to 129.50 NKr, Seadrill moved up 3.65% to 106.50 NKr, TGS-NOPEC Geophysical gained 5.4% to 101 NKr and Fred Olsen Energy ended 4.7% to the better at 267.50 NKr.

The gains extended to industrials, led by fertiliser group Yara International, up 5.5% to 149.25 NKr, insurance group Storebrand up 2.5% to 90.10 NKr and telecommunications company Telenor higher 3% to 104 NKr.

Scandinavian airline SAS took off, finishing 7.8% stronger at 110 NKr.

Solar panel maker Renewable Energy Corp clawed back some of the previous day's nearly 10% losses to close Friday up 5.11% to 195.25 NKr.

REC, one of the Oslo Bors' biggest companies by market capitalisation, fell yesterday, undermined by German sector rival Conergy, which said it believes silicon prices will drop in the year ahead.

Internet search engine technology group Fast Search and Transfer entirely wiped out earlier Friday losses, to close up 3.2% to 9.65 NKr.

The previous day the group announced details of a plan that it hopes will reinvigorate its business, including the cutting of 148 jobs as part of an effort to cut costs by 12  Million usd a quarter.

Media group Schibsted edged up 0.2% - giving up earlier gains of nearly 2% - to close at 238 NKr.

The company posted better-than-expected second quarter results and remained confident about its prospects.

Even Norwegian telecommunications-to-energy group Eltek managed to reverse early losses to close up just under 1% to 43.20 NKr.

On Thursday it received a hammering, plunging 11% after posting second quarter profits below expectations at both the pretax and operating levels.

Yesterday, in a note to investors, SEB said while Eltek's figures did not deviate enormously from its own forecasts, 'few items in the report improved our confidence in the investment case'.

Engineer Aker Kvaerner closed up 3.9% to 147.50 NKr. Earlier it announced it won a contract by the China National Offshore Oil Corporation for the delivery of various drilling equipment in a deal worth 128  Million usd.

One of the few second quarter earnings disappointments not to benefit from the afternoon market recovery was Norwegian IT hardware company Tandberg Data, losing 3.8% to 5.35 NKr.

The previous session it plunged 22% after failing to meet consensus estimates with its second quarter results and warning that full-year revenues were likely to be lower than previously expected.

Finally in the Nordic arena, we go to Finland where Helsinki shares closed higher led by Nokia.

The OMX Helsinki 25 ended 1.19% higher at 2,959.58 and the OMX Helsinki closed up 1.66% at 10,763.61 on volume of 2.646  Billion Eur.

Nokia closed 3.33% higher at 21.72 Eur on bargain-hunting.

Nokia said it has filed a complaint with the US International Trade Commission, alleging that Qualcomm is engaging in unfair business practices and copying the Finnish group's patented technology without permission in some of the chipsets it makes.

Among industrials, Metso added 0.96% to 41.90 Eur, Rautaruukki K was up 1.21% at 37.55 Eur and Wartsila B closed 0.94% firmer at 40.63 Eur.

Of the paper stocks, UPM-Kymmene was 1.83% stronger at 15.57 Eur.

The paper group said it will close its Kymi paper mill between August 20 and 24 to carry out renewal work there, which will include paper machine upgrading and maintenance.

The cost of this project is estimated at 10  Million Eur.

Stora Enso R closed 3.28% higher at 11.98 Eur.

Fortum ended the session 1.68% lower at 22.83 Eur after it said it has sold its minority stake in Lenenergo, an electricity distributor in the St Petersburg and Leningrad areas, for 295  Million Eur.

The company will book a 230  Million Eur gain on the sale in its third-quarter accounts.

Orion B strengthened 2.63% to 16.42 Eur, supported by Goldman Sachs' move to upgrade the stock to 'buy' from 'neutral' with a reduced price target of 19 Eur from 19.4 Eur, according to traders.

Nokian Tyres finished up 0.85% at 23.68 Eur.

The tyremaker said it is to build 300 flats to accommodate staff working at its Vsevolozhsk car tyre factory near St Petersburg ahead of a major ramp-up of production at the site, Kauppalehti reported, citing the company. Tyre production at the Vsevolozhsk facility is set to rise from 4 million tyres a year to 10 million by 2011.

Sampo A closed 0.45% higher at 20.07 Eur after it said it has amassed a 5.44% voting stake in Nordea AB, according to a filing with the Sweden's FSA.

Sampo passed the 5% limit on August 16, and prior to this held no shares in Nordea.

Elsewhere, the Nordic exchange operator OMX' Helsinki-listed stocks closed 1.88% firmer at 24.93 Eur after a 230 SKr cash bid by Borse Dubai earlier.

Down South now and to Athens where Greek shares closed sharply higher on a late-in-the-session buying surge.

The ASE general index spiked 3.5% to 4,683.6 and the blue chip index grew 3.6% to 2,487.2. Mid caps gained 3.3% to 6,095.8 and small caps ended 3.2% higher at 1,061.3.

Advancers outnumbered decliners 246 to 35 while 31 were unchanged in heavy trade of roughly 680  Million Eur.

Electricity utility Public Power Corp spiked 9.8% to 20.98 Eur and Alpha Bank jumped 8.8% to 23.16 Eur on the improved international market sentiment.

Lottery operator OPAP grew 7% to 25.9 Eur ahead of its first half year results announcement next Thursday, which analysts expect will be solid.

National Bank of Greece gained 3% to 40.8 Eur and the Bank of Piraeus rose 3% to 23.06 Eur, both rebounding from recent selling pressure in the banking sector.

Marfin Investment Group (MIG) closed flat at 6.7 Eur. Yesterday, it confirmed it had purchased 5.3% of (Hellenic Telecomms) OTE via market transactions. OTE grew 1.6% to 23.38 Eur on the news.

Neighbours Italy saw Milan's market end higher, although off intra-day highs.

The Mibtel index ended 1.49% higher at 29,982, while the S&P/Mib ended up 2.09% 38,712 on turnover of about 9.414  Billion Eur, unusually high for this time of year in Italy.

Banking and financial shares that were badly hit in the recent turbulence led the rise, with Unicredito ending up 4.08% at 6.12 Eur, while its merger partner Capitalia ended 3.88% higher at 6.75.

Yesterday was the last day Capitalia shareholders had to exercise their withdrawal right, and to opt for 7.015 Eur for each of their shares. Capitalia recently said it will announce in September how many shareholders exercised this right.

Among other banking shares, Intesa Sanpaolo ended 3.33% higher at 5.61, while Banco Popolare finished up 2.29% at 17.97, and Banca Popolare di Milano finished up 1.93% at 10.085.

Turning to insurers, Unipol gained 3.36% to 2.31, while Generali added 1.31% to finish at 29.38, its life insurance unit Alleanza ended up 1.09% at 9.39.

Oil related stocks were boosted also by the rebound in oil prices also thanks to hurricane threats in the Gulf of Mexico.

Saipem, which yesterday was among the leading losers, gained 4.41% to end at 25.08, while Eni rose 2.19% to 23.82.

Shares in the media sector were mixed with Mediaset going in positive territory at the closing bell to finish up 0.13% at 7.69%, while l'Espresso dipped 0.40% to 3.6725.

Cement companies were still under pressure, mainly for their strong exposure to the US market, with Buzzi Unicem losing 1.41% and ending at 19.65, Italcementi, which is less exposed to the US, adding 1.29% at 17.31 and Cementir up 1.07% at 8.52.

There continued to be a lot of selling pressure on Fiat, which slumped 3.83% at 18.05, regaining the 18.00 Eur psychological threshold but after touching a low at 17.82 Eur, levels not seen since March of this year.

And last but not least in Europe we go to Spain where in Madrid, in line with all other markets, the Ibex eked out gains.

The IBEX-35 index closed up 1.84% at 14,237.50 after trading in a range of 13,841-14,375.

Heavyweight banks led the rise, with Santander adding 4.15% to 13.55 and BBVA rising 3.02% to 17.03.

Other heavyweights also recovered some ground from the week's losses, with Telefonica up 1.16% at 17.37 and Repsol YPF adding 2.00% to 26.54.

Domestically focused banks were also strong, with Banco Popular adding 1.98% to 13.41, Bankinter rising 3.81% to 12.25 and Sabadell gaining 2.64% to 7.38 .

Financials followed suit, with BME putting on 4.75% to 39.45 and Mapfre up 4.75% at 3.31.

Of the losers, Antena 3 slipped 1.11% to 13.31 and Altadis dropped 0.08% to 48.35.

Iberia was down 0.32% at 3.13, after low-cost carrier Ryanair announced plans yesterday to open four new European routes from Madrid.

Separately, BNP Paribas cut its stance on the Spanish flagship to 'underperform' from 'neutral', with a new target price of 2.80 Eur from 3.60, noting that potential buyer TPG may use the current credit concerns to its advantage and offer a bid much lower than the 3.60 indicative bid tabled earlier this year.

Inditex slipped 0.24% to 42.20, extending recent weakness in the wake of lower than expected July sales growth at peer H&M earlier this week.

Selected constructors were lower, with Sacyr down 0.40% at 30.00 and FCC falling 0.42 to 58.70.

UK Market - In one of the most turbulent weeks in the financial markets this year, there have been not only tears but also laughter as black humour have helped some of the world’s biggest banks and institutions come to terms with the prospect of huge losses.

As the FTSE 100 shed 4.1% on Thursday – the biggest daily loss in more than four years – traders let rip with expletives and gallows humour in equal proportions as they grappled with the unprecedented volatility.

One joke likened the crisis in subprime assets – responsible for triggering the implosion of some hedge funds as they totted up billions of Dollars in losses – to the Titanic disaster: as with the Titanic, the downside was not immediately apparent and only a few wealthy people got out in time.

Another dealer announced in a cheeky e-mail the creation of a new structured product: a Constant Obligation Leveraged Originated Structured Oscillating Money Bridged Asset Guarantee, or COLOStOMyBAG. One trader noted on the product – a parody of the increasingly bizarre acronyms that have become commonplace in the world of structured finance – “It’s basically full of sh*t.”

Other traders described a new quantitative trading method – one of the complex mathematical models de-signed to profit from pricing inefficiencies in the markets – otherwise known as a “dartboard”.

One leading credit strategist said: “If you’re a trader who has lost a lot of money, there is a temptation to give up and turn to jokes, even go to the pub. I would agree that, in the money markets in particular where credit lines have just dried up, there has been a real sense of panic. This week has been a bad one. It started on Tuesday when Wall Street saw big losses and it just got worse and worse although yesterday the markets did pep up a bit.”

This has been one incredible week. We have seen markets swing wildly. In the money markets, there has been a real sense of panic. Some people may have turned to jokes to keep their spirits up but others are really crying.

There is a palpable sense of fear out there and that’s not just judging by the Vix - the market index that measures implied volatility and is otherwise known as the fear gauge, which hit a five-year high this week. It’s real. There are people out there who are very scared.

The FTSE 100 Index has leaped 3.5% as beleaguered investors seized on a dramatic move from US policymakers to ease credit market turmoil.

The index reversed Thursday's slump with its biggest percentage gain since March 2003, after the US Federal Reserve announced a 0.5% cut in the rate it charges banks to borrow money. The Fed said it had made the move because recent turbulence in financial markets "had the potential to restrain economic growth going forward".

After a volatile start, the Footsie closed 205.3 points higher at 6064.2 - back above the psychological 6,000 mark and recouping £49 billion of the £60 billion losses shipped in the previous day's sell-off.

It was 275 points higher at one stage following the move but fell back as Wall Street's Dow Jones Industrial Average lost its early impetus.

The turnaround in financial markets comes after the Footsie lost 12.5% in the past month.

Chancellor Alistair Darling also moved to reassure markets, saying that the world economy remained strong despite the market turbulence.

Financial and mining stocks dominated the Footsie risers’ board as investors reversed some of the heavy losses seen over recent days.

Asian-facing bank Standard Chartered set the pace with a gain of 116p to 1560p, a gain of 8%, while insurer Standard Life advanced more than 7%, or 20p, to 305.5p.

Mortgage lender Northern Rock staged a much-needed recovery after the banking stock bore the brunt of the sector’s funding concerns earlier in the week. It endured another roller-coaster ride yesterday, but eventually closed 50.5p higher at 709.5p, a gain of almost 8%.

Elsewhere in the financial sector, Icap gained 29.5p to 484.5p, Royal Bank of Scotland cheered 32.5p to 575.5p and Barclays added 34.5p to 639.5p.

Miners also achieved a marked turnaround from earlier in the session, as fears about a drop-off in demand faded. Lonmin advanced 182p to 2974p, Antofagasta added 36.5p to 644.5p and Xstrata cheered 147p to 2656p.

Advertising and marketing group WPP spent much of the session in negative territory, reflecting comments from the business that 2009 could be a tougher year. But the stock still closed 19p higher at 699.5p, as analysts focused on a 7% rise in half-year profits and a healthy margin performance.

Outside the top flight, sentiment remained positive towards Balfour Beatty following its interim results earlier this week. Shares in the construction firm were up 17p at 431.5p.

The biggest Footsie risers were Standard Chartered up 116p at 1560p, Northern Rock ahead 50.5p at 709.5p, Standard Life up 20p at 305.5p and Lonmin ahead 182p at 2974p.

The two Footsie fallers were ICI down 1p at 616p and Tesco off 0.5p at 403.5p.

Japan & Asia Pacific - It was a bad day even by the standards of what has been possibly the worst week Asian stock markets have witnessed in recent years, as global equity turmoil from the US subprime credit crisis continued to wreak havoc.

Worst hit on Friday were the region’s weightiest and relatively liquid stock markets in Japan, Hong Kong and South Korea. Their slumps were in some cases even more severe than the day before.

The sense of uncertainty and suspense is heightened by the sharply polarized views offered by analysts, ranging from declarations of the onset of another financial crisis to the rather sanguine assessment of seeing a bottoming-out opportunity.

Speculating about the possible “onset of the fourth generation of financial crisis for the emerging markets” (referring to earlier episodes of financial distress from the 1970s onward), analysts at Morgan Stanley pondered in a research note whether this marks a new type of financial contagion for Asia, one whose root cause is a credit and liquidity crisis spilling over from a major industrial country, the United States.

Contrasting views come from analysts at Macquarie Securities and ABN Amro, who see limited damage for regional stocks in the long run. According to Tim Rocks, Macquarie’s regional strategist, the impact of the current stock market rut will be buffered by economic strength in Asia, which he characterized as being its best shape in ten years. ABN Amro’s strategist, Mun Hon Tham, said the present volatility falls short of a true crisis in scale. Placed in perspective, Tham said, Asian markets were back to about where they stood in the beginning of the year. The MSCI Index for Asia outside of Japan, for instance, was still 7.3% up in Dollar terms based on Tuesday’s close. South Korea remains up 13.5%; Thailand, 16.4%; India, 10.8%; and Chinese stocks in Hong Kong, 12.7%.

Losing ground were commodity stocks and some of the country’s most competitive exporters, hurt in part by a fast-strengthening Yen. Sumitomo Metal Mining, its largest nickel producer, lost 16% to end at 1,940 Yen ($16.83). Canon, the world’s largest digital camera maker, plunged 8.6% to end at 5,400 Yen ($46.86). Honda Motor, Japan’s second-largest automaker after Toyota, dropped 8.2% to 3,470 Yen ($30.11). Even the mighty Toyota was not immune, taking a hefty loss of 7.2% to close at 6,190 Yen ($53.72).

Japan’s largest trading market, China, has seen Hong Kong-listed stocks of its bellwether corporations spiked by investors’ anxiety. Chinese stocks led the benchmark Hang Seng index through a tumultuous Friday session that saw it losing as much as 1,200 points before largely recovering to 20,387.13 points--1.38%, or 285.26 points, down. At one point, the market was suffering its largest weekly swoon since March 2001.

Ultimately, the market was given support by blue-chip stocks such as China Mobile, which ended up 0.19% at 81.0 Hong Kong Dollars ($10.36); HSBC, edging down 0.22% to 135.8 Hong Kong Dollars ($17.37); and Cheung Kong, shedding 0.22% to end at 98.9 Hong Kong Dollars ($12.65).

In the worst-hit market the previous day, South Korea , heavy with foreign investment, the benchmark Korea Composite Stock Price index narrowed its losses to 3.2%, or 53.91 points, to end at 1638.07, its lowest level in three months.

In a theme echoed elsewhere, investors dumped expensive sectors such as steel, which are directly threatened by slowing global growth prospects. South Korea’s largest steel maker, POSCO, ended at 445,000 won ($471.34), a drastic 8.1% fall, and Hyundai Steel settled at 54,000 won ($57.20), a 4.1% decrease.

Earlier Friday, Japan's central bank injected 1.2 trillion Yen ($10.5 billion) into money markets - the third injection this week and triple the amount it injected the day before - in a bid to curb rises in key interest rates.

Tokyo stocks nosedived for a third day Friday with the key Nikkei index falling more than 870 points--its largest drop since April 2000--against the backdrop of the falling Dollar that briefly entered the 111 Yen level in Tokyo as the US subprime mortgage loan problem continued to shock the financial market.

The 225-issue Nikkei Stock Average fell 874.81 points, or 5.42 percent, ending at 15,273.68, breaking its record lowest close this year for three days in a row.

It was the first time the Nikkei index fell below 15,300 since Aug. 7 last year.

The TOPIX index of all First Section issues was down 87.07 points, or 5.55 percent, at 1,480.39. It was the first time the TOPIX ended below 1,500 since July 19 last year.

In Hong Kong , the Hang Seng index fell 1.38 percent, to 20,387.13 after dropping more than 6 percent in early trade.

Thailand 's main benchmark rose 1.0 percent to 758.42. Shares rebounded from lows when retail buying took over as the weight of selling by foreign institutions dissipated. It was the only stock index to gain Friday in Asia.

In Indonesia , Markets were closed for Indonesia's Independence Day. But on Thursday, The composite index closed down 120.45 points or 5.9 percent at 1,908.64. For the week, the index plunged 13.5 percent or 298.76 points.

Malaysia 's benchmark index on Kuala Lumpur Stock Exchange fell 1.3 percent to 1,191.55 in heavy volume. It narrowed losses from an intraday low of 1,141.56 as selling pressure from hedge funds and forced-selling in margin accounts abated in late trade.

Philippine 's index fell 2 percent to 2,884.34, its lowest level since December 27.

In India , The Bombay Stock Exchange's benchmark index - the 30-share Sensex - fell 217 points, or 1.5 percent, to close at 14,142 points. Shortly after opening it dropped just over 4 percent to 13,779.88.

The South Korea Composite Stock Price Index fell 3.2 percent to 1,638.07, its lowest level since May 21, when it closed at 1,628.20.

In Mainland China , The benchmark Shanghai Composite Index dropped 2.3 percent to 4,656.57 extending its 2.1 percent loss in the previous session.

Singapore 's benchmark Straits Times Index fell 3.7 percent to close at a five-month low of 3,152.16. During the session it fell as much as 5.2 percent before paring losses.

In Taiwan The Weighted Price Index of the Taiwan Stock Exchange declined 1.4 percent to 8,090.29, its lowest level since May 18 and marking the fourth consecutive session of losses.

The Australian sharemarket closed lower yesterday, after a choppy day's trading on a lacklustre lead from US markets still buffeted by concerns over the US subprime mortgage crisis, and lower commodity prices.

At the close, the benchmark ASX200 index was 40.5 points lower at 5671.0 and the All Ordinaries fell 41.9 points to 5670.3.

The market plunged 4.9% over the week, after recording its biggest intra-day fall in seven years on Thursday.

It has fallen about 12% since hitting record highs above the 6400-point level on the ASX 200 late last month, and lost about $186 billion in value.

On the Sydney Futures Exchange, the September share price index contract fell 115 points to 5585 on a volume of 55,924 contracts.

Financial stocks improved as the Reserve Bank governor, Glenn Stevens, said that recent volatility on global markets was "bordering on the irrational".

Shares in Commonwealth Bank closed steady at $52.50, ANZ Bank gained 49 cents to $27.54 and National Australia Bank picked up three cents to $37.98.

The biggest major gainer on the day was Westpac, which rose 43 cents to $25.20 on news it had poached the St George Bank chief executive, Gail Kelly, as its new head.

St George fell 10 cents to $32.58.

Investment banks were mixed, with Macquarie up 74 cents to $64.74, Babcock & Brown down 71 cents, or 3.64%, to $18.80 and Allco Finance up seven cents to $7.21.

The resources giant BHP Billiton fell 56 cents to $32.44 and its rival Rio Tinto fell $1.41 to $81.16 as oil, gold, and all the main base metals lost value.

The goldminer Newcrest fell 26 cents to $24.26 after announcing a 79% drop in annual profit, with a hedge accounting charge hitting the bottom line.

The spot price of gold was $US647.20 a troy ounce, down $US18 on Thursday night's close.

The oil producer Woodside lost $1.05 to $38.75, Santos gained five cents to $11.35 and Oil Search dropped five cents to $3.20.

Among retailers, Wesfarmers tumbled $1.89, or 4.83%, to $37.20, Coles Group strengthened three cents to $37.20 and Woolworths lost 28 cents to $26.42.

News Corp gained 53 cents, or about 2%, to $26.49, while its non-voting scrip added 69 cents to $25. Publishing and Broadcasting fell 10 cents to $16.40.

Telstra lost three cents to $4.24 and Qantas was steady at $5.30. t

The top-traded stock by volume was Empire Oil & Gas with 542.85 million shares changing hands worth $16.87 million.

Preliminary market turnover was 2.67 billion shares worth $8.77 billion, with 642 stocks rising, 712 falling and 273 unchanged.

In New Zealand , Wellington shares closed lower, after remaining fairly steady for most part of the trading session, giving in to a regional sell-off sparked by a surge in the Japanese Yen.

The benchmark NZX-50 index closed down 63.59 points or 1.63% at 3,894.34. Turnover totaled NZ$175.8 million.

The index has fallen for the last six sessions to a fresh eight-month low, and has lost 9.88% since July 24.

The broader NZX All Capital index ended at 1,073.43, down 15.63 points or 1.46%.

Commodities - Commodities prices on Friday rose broadly after the US Federal Reserve stepped in to mitigate the economic impact of the credit turmoil by cutting the discount rate at which it makes loans to banks.

However, in spite of the increase, commodities prices largely posted weekly losses with the exception of the energy complex, which was supported by fears of a hurricane. Base metals were hit on fears of a US economic slowdown.

Crude oil prices rose on worries that hurricane Dean next week might disrupt oil and gas production. The storm is expected to reach the Gulf of Mexico on Tuesday, according to the US National Hurricane Center.

In late afternoon London trading, Nymex September West Texas Intermediate was up 73 cents to $71.73 a barrel, with a weekly gain of 0.4%. ICE September Brent was up 53 cents to $70.30 a barrel, an increase of 0.1% on the week .

Some oil companies began to evacuate non-essential personnel from the platforms in the Gulf of Mexico.

Nymex September RBOB gasoline rose 3.42 cents to $2.0125 a gallon, up 3.0% on the week . The gasoline price increase was supported by a fire in a Chevron large US refinery. Nymex September heating oil rose 2.16 cents to $2.0047 a gallon, up 1.7 since last week.

The base metals prices ended the week posting large losses in spite of Friday’s price increase. Copper, seen as an indicator of the health of the global economy, fell 6.1% on the week to $6,990 tonne. Aluminium lost 3.9% to $2,497 a tonne, the lowest since mid-February. Tin prices fell 14.2% on the week to $13,550 a tonne after the metal, used for soldering in the electronic industry, reached an all-time high last week.

The London Metal Exchange confirmed that ED & F Man Commodity Advisers, the London-based sugar and coffee traders, has applied to trade at the LME’s floor. If approved, it will be the first floor, known in the industry as ring traders, to join the LME in several years. The base metals markets, not so long ago seen as a niche, have gained popularity since 2004.

Gold prices ended the week down 2.2% to $658.1 an ounce troy as the Dollar recovered against the Euro.

Agriculture commodities were down on the week, with wheat as the best performer, posting a loss of 0.4% to $6.64 a bushel.

Corn fell 3.3% to $3.22 a bushel, while soyabean lost 5.4% to $8.04 ½ a bushel .

Currencies - The Yen staged a spectacular rally and high-yielding currencies tumbled this week as signs emerged that carry trades were imploding.

Rising risk aversion amid sharp falls on global equity markets triggered mass liquidation of carry trade positions in which the low-yielding Japanese unit is sold to fund the the purchase of riskier, higher-yielding assets elsewhere.

The Yen climbed to a 14-month high of Y111.62 against the Dollar in volatile trading Friday. It later fell back to Y113.65 but was still up a striking 4% on the week.

This marked the Yen’s biggest weekly gain against the Dollar since 1998, when Yen-funded carry trades were liquidated in the wake of the near collapse of the Long-Term Capital Management hedge fund.

In such an environment the Yen remains the best safe-haven currency, and with additional short positions on the Yen still remaining, continued global market uncertainty may well result in Dollar/Yen returning to the Y105.00-Y110.00 range.

The Australian Dollar was not helped by the Reserve Bank of Australia admitting Friday that it had intervened to buy the currency in what it described as “rather thin, disorderly FX markets”.

Indeed, higher-yielding currencies were hit hard, with the Australian and New Zealand Dollars falling 10.3% to Y89.62 and 11.5% to Y78.18 against the Yen respectively on the week.

The Pound, meanwhile, fell 5.8% to Y224.60 against the Yen over the week.

The Yen also advanced against the Euro, breaching the Y150 mark for the first time this year as it peaked at Y149.28 Friday. The Euro later made up some ground to stand at Y153.50, still down 5.3% on the week.

The low-yielding Swiss franc, which has also been a favourite funding currency among carry trade investors, also advanced. It rose 1% to SFr1.6245 against the Euro and 1.6% to SFr2.3876 against the Pound over the week.

However, the Swiss franc lost 0.8 to SFr1.2064 against the Dollar on the week, despite a move Friday from the Federal Reserve to lower the discount rate by 50 basis points to 5.75%.

The Dollar rose 1.4% to $1.3500 against the Euro and 1.9% to $1.9857 against the Pound over the week as investors rushed to the safe haven of the US Treasury market.

Meanwhile, the Dollar jumped 6.8% to $0.8765 against the Australian Dollar and 8.3% to $0.6840 against the New Zealand Dollar over the week.

Emerging markets currencies took a hit as nervousness spread across the globe. The Brazilian Real dropped 4.6% to R$2.0400 against the Dollar on the week, while the South African Rand fell 3.6% to R7.4160 and the Indonesian Rupiah lost 1.3% to Rp9,470.

Rounding off currencies today, we close closer to home with the RMB finishing at 7.5951 to the Dollar on the over-the-counter (OTC) market, up from 7.6040 Thursday.

China - China's most respected troubleshooter, vice-premier Wu Yi, was appointed head of a new consumer safety panel today as Beijing attempted to reverse a growing trust deficit with overseas trade partners and domestic shoppers.

Following Mattel's recall this week of 18.2m hazardous Chinese-made toys, the involvement of Ms Wu - who led the response to the Sars crisis in 2003 - signals that the state is stepping up its efforts to stem a loss of global confidence in the Made in China label.

Two high-level delegations will also be sent to the United States, where criticism of Chinese products is loudest, to explain the measures Beijing is taking and to rebut Congressional calls for a new stop-and-inspect regime for Chinese goods.

Manufacturers are already feeling the pinch of numerous recalls and safety scares since April, including cases of poisoned pet food, unsafe toothpaste and poorly made fireworks. Toys have created the biggest stir. Mattel has pulled Batman, Barbie and other products off the shelves because they contained lead paint and dangerously and insecure small magnets that might be swallowed by children.

The China Toy Association, which represents about 1,500 companies, said that the industry was paying a heavy price for its mistakes.

"Most of the employees will have to leave factories they have been serving at for many years and are facing unemployment or re-employment problems. This has had a huge impact on the industry and society. The recent recalls were instigated by foreign brands. Nobody was injured," the association said in a statement. It blamed the foreign media for whipping up concerns.

In a rebuttal to critics, the state council information office issued a new 39-page report on food safety today that insisted standards are rising.

"For years, over 99% of China's food exports have been up to standard," the paper said. It noted that food exports rose 13% last year to 24m tons.

Domestic consumers will be less reassured, however, by statistics showing 14.9% of food products in the first half of this year failed to meet quality standards. This was an improvement on the 22.1% failure rate last year.

The report repeated government plans to shut down unlicensed processing plants, increase random inspections and introduce a product recall system.

Ms Wu will spearhead a 19-member panel responsible to implement these measures and other steps to restore confidence.