US Markets - Wall Street's bull run continued this week, with the exception of the technology sector, as deals and earnings news pushed the S&P 500 index to within sight of its all-time high.

Late on Friday, the S&P had risen 0.65% to close at 1,522.75, a gain of 1.1% over the week. The benchmark notched its seventh consecutive weekly rise and closed at its highest level since setting its record close of 1,527.46 set in March 2000.

Energy and telecoms stocks were the best performing sectors, while information technology was the laggard among the 10 major groups within the S&P.

Higher oil prices and a further rise in bond yields were unable to weigh on stocks.

Blue chips remained the bull's prime choice this week. The Dow Jones Industrial Average rose above 13,500 points for the first time and set a series of record closes as its run of strength since the end of March continued.

On Friday, the Dow rose 0.6% to finish at 13,556.53, a rise of 1.7% for the week.

A feature of the market's current rally has been strong buying of large blue chip stocks. This positive sentiment was nurtured this week when high-profile investors such as Warren Buffett, Edward Lampert and Carl Icahn revealed their latest stock selections in regulatory filings.

Railroads were a prominent sector, boosted by investment from Mr Buffett and Mr Icahn, and the S&P railroad index rose 3.8% this week. Mr Lampert's disclosure of a stake in Citigroup helped the bank's shares rise by 3.6% to $55.

By contrast, the technology-laden Nasdaq Composite was bedevilled by weakness among many semiconductor stocks amid a general rotation out of tech. The Philadelphia semiconductor index fell 2.7% this week. On Friday, the Nasdaq rose 0.75% to close at 2,558.45, but slipped 0.15% for the week.

The Russell index of small companies fell 0.7% for the week.

Leading declines among chip makers was Micron Technology, down 6.9% to $11.47, after the group said it planned to sell $1.1bn in convertible notes.

One ray of light among chip makers was Advanced Micro Devices, up 6.2% to $15.59 this week, as it rolled out a new line of graphics cards designed for high-definition video games.

In another week replete with deals, Microsoft said it would purchase Aquantive, the digital marketing group for about $6bn on Friday.

It is the largest acquisition yet made by Microsoft, and its stock fell 0.5% to $30.83, while Aquantive soared 77.8% to $63.79 on Friday.

Shares in General Electric rose 1.2% to $36.96 on Friday, as the conglomerate moved towards selling its plastics business for $11bn to Saudi Basic Industries.

In other acquisition activity this week, Cardinal Health bought Viasys Healthcare for $1.42bn. Viasys rose 38% to $43.53, and Cardinal Health rallied 3.9% to $71.77.

Mylan Laboratories, the drugmaker agreed to pay $6.6bn for the generic drug business of Germany's Merck KGaA. Shares in Mylan fell 11.8% to $19.75.

Bausch & Lomb agreed to be acquired by private equity firm Warburg Pincus for about $3.7bn in cash. Shares in the maker of eye-care products jumped 9.4% to $67.10.

Alliance Data Systems, the issuer of private-label credit cards agreed to be acquired in a $7.8bn deal by Blackstone Group. ADS rose 24.6% to $78.33 and set a 52-week high of $80.30.

Acxiom agreed to a $2.24bn buy-out from private equity firms Silver Lake Partners and ValueAct Capital. Shares in the information technology company gained 13.4% to $27.78 this week.

There was further selling in Amgen after Medicare and Medicaid Services said it may limit coverage of the drugmaker's anaemia drugs, which a Food and Drug Administration panel recently said should have new labelling. Shares in Amgen fell 4% to $54.04 as it also received multiple brokerage downgrades.

In earnings news this week, Intuit said late on Thursday that its third-quarter profit climbed 23% and the software maker raised its fiscal 2007 profit above analysts' forecasts. Shares rose 13.85% to $31.56 on Friday, and were up 13.2% for the week.

Compuware rose 9.9%, to $11.06 and reached a five-year high of $12.56, as its fiscal fourth-quarter and full-year results exceeded expectations.

Agilent rose 4.9% to $38, after it reported a 7% rise in second-quarter earnings and raised revenue outlook for the year.

Hewlett-Packard, down 1.5% at $44.58, was the worst Dow performer this week as its second-quarter profit fell 6.5% after a tax gain in the year-earlier period.

Home Depot reported a 29.5% decline in profit for the first quarter due to variable weather and a weaker housing market. The stock closed out the week a fraction higher at $38.62.

European Markets - Bid speculation among financial stocks helped European equity markets to a 6½-year high Friday with the FTSE Eurofirst 300 rising 1.1% during the week to 1,600.25.

But come to these later and for now let's cover the individual countries and start with Germany where in Frankfurt German stocks advanced, led by Bayer AG, the world's largest maker of polyurethanes, on a report that Saudi Basic Industries Corp. may pay $11 billion for General Electric Co.'s plastics unit.

Siemens AG increased after Handelsblatt reported that Europe's largest engineering company plans to prepare its VDO automotive parts unit for an initial public offering no later than October. ThysseNKrupp AG also advanced.

The DAX Index added 71.93, or 1%, to 7571.43 at 2:42 p.m. in Frankfurt, the highest level since March 31, 2000. The gauge is heading for a 1.2% gain this week. DAX futures expiring in June rose 1% to 7592. The HDAX Index of the country's 110 biggest companies rose 0.9%.

Bayer climbed 1.50 Euros, or 3%, to 50.99 Euros. Saudi Basic, the world's biggest chemical company by market value, will buy GE's plastics unit for about $11 billion, two people familiar with the process said. The price is higher than the $8 billion to $10 billion some investors had estimated.

Bayer's MaterialScience unit, which makes plastics, contributed 2.6 billion Euros ($3.5 billion) to overall first- quarter sales of 8.3 billion Euros.

Siemens increased 2.13 Euros, or 2.4%, to 91 Euros. The Financial Times also reported that the engineering company's supervisory board will hold an extraordinary meeting on May 20, at which a new chief executive officer may be appointed. The report on the newspaper's Web site cited an unidentified person familiar with the situation.

ThysseNKrupp added 79 cents, or 1.9%, to 42.47 Euros. Commerzbank AG raised its price projection on shares of Germany's largest steelmaker to 47 Euros from 41.

Into France now where in Paris the market closed higher across the board, as recent M&A activity and rumours, combined with strong US economic data and corporate results, fuelled a widespread sense of optimism among investors.

The CAC-40 index finished up 74.14 points or 1.23% at 6,101.14, its highest level since Nov 2000.

Volume for the day was 7.5 bln Eur.

Among CAC-40 stocks, 36 closed higher and 3 closed lower. On the Matif, June CAC-40 futures were trading up 90.0 or 1.51% at 6,040.5.

On the broader indices, the SBF-80 index closed up 56.62 or 0.78 at 7,362.39, while the SBF-120 ended up 51.15 or 1.16% at 4,452.20.

CAC-40 heavyweight Total closed up 1.59 Eur or 2.981% at 56.19, supported by the trend in oil prices, but also by lingering speculation in the oil sector after unconfirmed rumours yesterday of a possible alliance between Shell and BP.

Elsewhere among oil-related stocks, Technip finished 0.65 or 1.16% ahead at 56.56 while Vallourec added 2.84 or 1.26% to end at 228.0.

Tech stocks were in focus, with Atos Origin adding 1.78 or 4.05% to end at 45.76, as investors took advantage of a two day decline in the share price sparked by the group's decision to pull out of takeover talks.

Business Objects also fared well on the speculative sentiment, closing up 0.72 or 2.50% at 29.55.

STMicroelectronics closed up 0.52 or 3.61% at 14.91, helped by Goldman Sachs' decision to raise its price target on the stock to 16 from 15, keeping its 'buy' rating.

Buying was also encouraged by the fact the shares will go ex-dividend on Monday.

Legrand was among the major gainers, ending the day up 1.54 or 5.91% at 27.59 after unconfirmed rumours emerged that ABB Ltd and Siemens are preparing separate takeover offers.

A Legrand spokesman later dismissed the claims as mere rumour, stressing that 'Legrand's outlook as a standalone company is excellent, and our majority shareholders believe in it.'

ABB Ltd also refused to comment on the talk, but confirmed that it is looking for acquisition and takeover targets as part of its strategy, although its main focuses at the moment are Asia and the Americas.

EADS shares rallied over the day, closing up 0.76 or 3.34% at 23.50 on the back of reassuring comments by newly-elected president Nicolas Sarkozy, and by talk that Dubai International Capital is considering taking a stake in the European defence company.

Into The Netherlands now where in Amsterdam the market also closed higher as heavyweight Royal Dutch Shell surged on continued M&A talk, while steel giant Arcelor Mittal led gainers following target price upgrades at various brokerages.

The AEX closed up 5.16 points or 0.97% at 536.69 after opening at 531.41 and trading in a range of 531.41-538.29.

Arcelor Mittal led gainers, rising 2.75% to 43.73 Eur, as Exane and UBS became the latest brokers to make positive comments on the steel maker's prospects following its quarterly results on Wednesday.

But the main story of the day was Royal Dutch Shell, which put on 2.24% to 27.41 amid ongoing speculation of a possible merger with BP. Shell also gained 3.23% yesterday.

Other heavyweights also traded higher, with Philips rising 1.59% to 30.63 Eur amid positive broker sentiment and news that it has sold part of its stake in Taiwanese semiconductor maker TSMC.

ABN Amro put on 0.28% to 35.30 amid reports that the Royal Bank of Scotland consortium is close to a deal with Bank of America on the break-up of ABN's LaSalle unit, giving rise to speculation the consortium will move ahead in the bidding war with Barclays for the ABN Amro group.

Peer financials also gained, with Fortis up 1.18% at 32.45 and Aegon gaining 1.32% to 15.38, while ING was unchanged at 33.20.

Blue chip property stock Rodamco Europe put on 2.22% to 103.08, ahead of Monday's EGM French peer Unibail will hold to discuss the planned merger between the two companies.

Dutch sector peer Corio led midcap gainers, putting on 3.80% to 65.01 Eur.

TomTom put on 1.41% to 30.87 as ABN Amro issued a bullish note saying that its 2007 forecasts for the company's US volumes might be too modest and reiterated its 'buy' rating.

TomTom supplier Tele Atlas put on 1.27% to 15.95.

Unilever gained 0.14% to 22.17, recovering from an intraday low of 21.75 after it was downgraded to 'neutral' from 'buy' at Goldman Sachs on valuation grounds.

Heineken gained 0.05% to 40.18 after the stock was initiated at UBS today, with a price target of 35.60 Eur. The brokerage gave given the Dutch beer giant an initial rating of 'neutral 1.'

Neighbours Belgium saw Brussels shares close higher with KBC Group leading the gainers on continued positive reaction to its first quarter results posted earlier this week.

At the close, the Bel 20 was up 59.20 points or 1.26% at 4,749.45.

KBC Group rose 3.14 Eur or 3.05% to 106.24, building on gains following its stronger-than-expected first quarter results on Wednesday.

The group posted net profit at 997 mln Eur, up slightly from 980 mln Eur last year. Underlying profit was 781 mln Eur, from 776 mln last year, which had been seen easing to 708-728 mln Eur.

Other financial heavyweights went up more modestly. Dexia was up 0.06 Eur or 0.25% at 24.41.

Peer Fortis moved north by 0.40 Eur or 1.25% to 32.47. The Wall Street Journal reported that Royal Bank of Scotland may be close to reaching a settlement with with Bank of America over who might own ABN Amro's American banking arm LaSalle, opening the door to a possible RBS-led bid for ABN Amro in the coming week.

Elsewhere, national telecoms group Belgacom moved up 0.73 Eur or 2.22% to 33.57, while brewer InBev rose 0.65 Eur or 1.10% to 59.85.

Holding company GBL was 0.89 Eur or 0.96% higher at 93.52, after UBS upped its target price for the group to 112.00 Eur from 110.00 Eur.

Discount supermarket Colruyt was up 2.20 Eur or 1.25% to 177.57, while chemicals and pharmaceuticals group Solvay was 1.06 Eur or 0.90% higher at 118.56.

Utility Suez rose 0.63 Eur or 1.49% to 43.00.

After Gas Natural was initiated as 'underweight' at JP Morgan, the broker noted that stake building by Suez in Gas Natural may not be over, but said that a hostile bid is unlikely given possible negative political repercussions on key shareholders la Caixa and Repsol.

Holding company Compagnie Nationale a Portefeuille inched up 0.26 Eur or 0.52% to 50.00, after UBS increased its target price to 57.50 Eur from 56.50.

Among the fallers, healthcare group Omega Pharma dipped 0.22 Eur or 0.37% to 59.30.

Outside the Bel 20, GIMV was up 0.87 Eur or 1.69% at 52.46, after UBS initiated coverage with a 'buy' rating.

Cinema operator Kinepolis was down 0.61 Eur or 1.14% at 53.01, after the group said its ticket sales for April to early May fell compared to the same period last year due to 'persistent warm weather' and a 'mediocre range of films'.

Across to Switzerland now where in Zurich Share prices closed higher across the board, led by Julius Baer and UBS amid continued takeover speculation in the banking sector, and by chemicals stocks.

The Euro was slightly higher against the Swiss franc at 1.6568 SFr, while the Dollar was slightly lower, at 1.2255 SFr.

Leading the SMI was Julius Baer, up 5.05 SFr or 5.7% at 94 SFr, on renewed speculation as the lock-up period in which UBS AG may not sell its stake in it draws to a close.

There have been substantial off-market transactions and some market participants are speculating that Julius Baer itself might be bidding for the 20.7% stake held by its larger rival.

The shares had surged on Wednesday, on market rumours that UBS might sell its 20.7% stake in Julius Baer to Deutsche Bank.

Runner-up was UBS, up 1.95 SFr or 2.5% at 79 SFr.

Peer Credit Suisse gained 0.5 SFr at 92 SFr.

Speciality chemical stocks also outperformed with Givaudan adding 23 SFr or 2.0% at 1,159 SFr and Clariant up 0.40 SFr or 1.9% at 20.95 SFr.

Lonza climbed 1.4 SFr, or 1.2%, to 120.1 SFr.

ABB ended the session 0.4 SFr or 1.6% higher at 25 SFr, on rumours that it is considering a takeover bid for French electrical equipment manufacturer Legrand, a claim that the group has dismissed as market rumour.

Earlier Friday, the group also said it has won a 35 mln usd order from Norway's state-owned transmission system operator Statnett for an installation to improve capacity and reliability of power supplies in Norway.

Nobel Biocare was also a notable gainer, up 6.75 SFr, or 1.6%, at 431.5 after Lehman Brothers hiked its price target to 480 SFr from 400 SFr and reiterated its 'overweight' rating.

Insurer Zurich Financial was the biggest faller, hit by profit taking, down 1.75 SFr at 383, also not helped by a cut to 'neutral' from 'buy' at Goldman Sachs. Peer Swiss Re gained 0.2 SFr at 114.9 SFr, recouping some of yesterday's losses.

Among drugmakers, Roche was up 0.6 SFr at 227.6, bouncing back from losses Wednesday, while Novartis added 0.15 SFr at 69.85.

Nestle was off 0.5 SFr at 486.5 SFr, extending recent losses.

Also hit by profit taking were Synthes and Swatch, down 0.5 SFr at 156.3 and down 0.2 SFr at 71.5 respectively.

Outside the SMI, Rieter dropped 3.5 SFr to 666 SFr, with the stock going ex-dividend today.

Into Scandinavia now and starting in Sweden where Stockholm shares closed higher on widespread bargain hunting, with the healthcare and index-heavy industrial sectors outperforming.

The OMX Stockholm index closed up 0.94% at 413.84, while the OMX Stockholm 30 index rose 0.81% to close at 1,269.46.

The main sector movers were industrials, which closed up 1.91%; healthcare, up 1.62%; and energy, 1.38% higher.

The major movers within these sectors included Trelleborg B, up 3.19% at 210.50 SKr bid; Getinge B, 3.25% higher at 159; and Vostok Nafta, up 1.91% at 400.

SAS closed up 3.08% at 149.80, on hopes that an agreement will be reached which will ward off the Swedish cabin crew strike set to commence on May 25, dealers said.

AstraZeneca closed up 1.79% at 370, after the US Food and Drug Administration approved the once-daily version of the company's anti-psychotic pill Seroquel which treats schizophrenia in adult patients.

Neighbours Denmark saw Copenhagen Share prices close higher, led up by William Demant Holding, which extended recent rises, and by Carlsberg on news coverage.

The OMXC20 index closed 4.04 points higher at 490.34 and the OMXCB Benchmark index rose 4.25 points to 472.33.

The OMXC All Share index closed 4.13 points higher at 469.69 on turnover of 4.83 bln DKr.

William Demant Holding closed 14 DKr higher at 576, extending its gains after Swiss competitor Phonak posted a stronger-than-expected full-year report earlier this week.

GN Store Nord shed 0.25 to 63.5. According to dealers, UBS cut its target price for the stock to 71 DKr from 86 and a repeated 'neutral' stance.

Vestas Wind Systems added 1.5 to 375. Dealers said Kaupthing has started coverage of the stock with a 'buy' recommendation and a 450 DKr target price.

The brokerage sees Vestas achieving an 11% profit margin within two years.

Vestas Wind Systems and Siemens are likely to compete for a 25 bln DKr offshore wind turbine project at Naikun, Canada, due to start in the next few years, daily Boersen said.

Carlsberg B was up 10 at 670. While newswire RB-Boersen said today that Carlsberg has signed an agreement giving Fosters a license to brew, sell and distribute Carlsberg's Elefant and Tuborg beers in Australia, daily Boersen cited CEO Smedegaard Andersen as saying the group will invest 5 bln DKr in 2007 to strengthen market position.

Novozymes rose 5 to 567. The company is to focus on selling enzymes for bioethanol production for the Chinese market, the second-largest in the world, daily Berlingske Tidende said this morning.

Danisco added 3 to 477.

Novo Nordisk B was 7 higher at 563. The International Diabetes Federation expects that 380 mln people will suffer from diabetes in 2025, dealers said. At the same time, diabetes medicine costs in the US are expected to rise by 70% between 2007 and 2009, with Novo Nordisk's NovoLog being one of the products that will see the greatest rise in demand, they added.

Coloplast rose 3.5 to 488 after the group signed an agreement with Carbon Medical Technologies for exclusive distribution rights of its incontinence treatment Durasphere EXP in the US. No financial details of the agreement were disclosed.

ALK-Abello B, which posts first quarter results next Tuesday, gained 14 to 1,119.

Lundbeck rose 1.25 to 132.25.

Topdanmark shed 11 to 1,022 ahead of its first-quarter report on Tuesday, when the group is expected to report a fall in net profit for the quarter.

Into Finland where in Helsinki Shares closed firmer, with gains in Nokia and Outotec propelling the main indices to fresh highs.

The OMX Helsinki 25 finished up 0.38% at 3,209.83 and the OMX Helsinki all-share index up 0.71% at 11,104.83. Volume was 1.69 bln Eur.

Nokia finished the session up 1.94% at 20.00 Eur, its highest closing level in almost five years, supported by new orders for its networks venture with Siemens from India and Russia.

Outotec, the biggest blue chip advancer, put on 5.39% to finish at 35.42 Eur amid a buoyant mining market. Other major gainers were Neste Oil, up 0.97% to 27.05 Eur, Metso, up 1.48% to 39.84 Eur, and Fortum, 0.75% firmer at 22.82 Eur.

Stock in insurer Sampo rose 1.47% to 22.75 Eur.

Among the fallers were Stora Enso, down 0.71% to 14.01 Eur, Outokumpu, off 2.05% to 25.32 Eur and Nokian Tyres, which gave up 1.73% to 23.92 Eur.

Closing out Scandinavia this week is Norway where in Oslo Share prices closed higher, led up by Seadrill on rumours of a large contract extension, and by Marine Harvest on the sale of Pan Fish Scotland for 800 mln NKr.

The OSEBX Benchmark index closed 7.43 points higher at 487.32 and the OSEAX All Share index added 8.88 points to 554.05.

Total turnover amounted to 13.38 bln NKr.

Seadrill closed 6.9 NKr higher at 106 on rumours that the group will soon receive an extension to a significant contract in the North Sea.

Statoil was 5 higher at 167.25 after Merrill Lynch repeated a 'buy' rating on the stock, with the rise underpinned by the rising crude oil price.

As a result of its upgrades in its 2007 and 2008 benchmark Brent oil price forecasts, by 5 usd and 4 usd a barrel, the broker said it was increasing its earnings per share estimates on European oil companies.

DNO rose 0.18 to 12.08. The stock was in focus today after Financial Times reported from the group's oil fields in northern Iraq, which are the first wells to go into production since the fall of Saddam Hussein in 2003, dealers said.

Norsk Hydro added 3.5 to 213.5.

Altinex fell 0.01 to 1.55 after the oil explorer reported a setback for its Maeen-1 exploration well in Oman. Drilling at the well, in which Altinex holds a 50% interest, has stopped prior to reaching its target depth after technical problems.

Petroleum Geo-Services shed 1.5 to 150.25, while Fred Olsen Energy was 9.5 higher at 311.5, Frontline rose 6.75 to 240 and Subsea 7 added 2.75 to 126.5.

Marine Harvest was up 0.42 at 6.31, Leroy Seafood Group added 2 to 130.5 and SalMar rose 0.4 to 38.9 on news that Leroy and SalMar will buy Pan Fish Scotland from Marine Harvest for an enterprise value of 800 mln NKr.

Down to Italy now where in Milan Share prices closed higher, supported by merger and acquisition activity and the higher level of crude prices, with Lottomatica among the leaders after a Goldman Sachs recommendation.

The Mibtel index rose 0.87% to 34,365 points and the S&P/Mib was up 0.91% to 44,364. Volume was an estimated 6.486 bln Eur.

In the banking sector, Unicredito and Capitalia were suspended pending an expected weekend announcement that they will merge.

The merger is expected to see the two banks halving their combined 18% stake in Mediobanca, with banking foundations and existing shareholders taking up stakes in Italy's leading investment bank.

Mediobanca was up 1.07% to 17.96. Mediolanum lost 1.01% to 6.34 after rising earlier on prospects of it taking a bigger stake and linking more closely with Mediobanca.

BPM rose 2.15% to 12.85 and BPER added 1.95% to 20.90. These two banks are expected to finalise a merger over the weekend, brokers said.

Intesa Sanpaolo, which has already completed it most of its mergers, was up 0.58% to 6.09, while BMPS, which has yet to carry out a merger in the latest round, gained 0.97% to 5.22.

Valentino lost 4.30% to 35.15 after reports that Permira is close to buying a majority in the firm, potentially blocking any higher offer from Carlyle, which is reportedly interested in Valentino.

Eni was up 1.60% to 26.08 after reportedly buying a stake in a Czech refinery. Brokers said the reported price is high for the acquisition, a factor supporting other refining stocks.

Erg gained 2.00% to 20.05 and Saras added 4.35% to 4.5725.

Lottomatica rose 3.43% to 32.30. Goldman Sachs started coverage by putting the stock on its 'conviction buy list' with a price target of 39.3 Eur, citing conservative guidance by the company.

Pirelli was up 2.45% to 0.905 on prospects for an extraordinary dividend. One broker said chairman Marco Tronchetti Provera met investors this week.

Finmeccanica gained 1.87% to 22.94 on prospects for orders and this week's briefing for investors by its Alenia aircraft unit.

STMicro gained 3.55% to 14.89.

Alitalia was a faller, down 0.61% to 0.875. Economy minister Tommaso Padoa-Schioppa gave parliament yesterday an update on the airline privatisation, saying this should be completed by end of July.

In Spain Madrid Share prices closed higher, passing the 15,000 mark as the recovery from last week's sell-off continued though profit taking caused Sacyr to slump.

The IBEX-35 index closed up 100.2 points at 15,068.4, after trading in a range of 14,937-15,114 on turnover of 9.4 bln Eur.

Sacyr was the main exception, falling 1.19 Eur or 2.81% to 41.12 on profit taking following its sharp gains at the head of a broader construction sector recovery yesterday.

Sector peers were stronger and the day's main gainer was FCC, up 1.60 or 2.21% to 73.85 while ACS gained 0.61 to 47.65 and Ferrovial climbed 0.95 to 78.50.

SCH was strong on heavy put through related volume, up 0.29 or 2.15% to 13.75. A report that RBS may be close to reaching a settlement with Bank of America over who might own LaSalle Bank of Chicago, opening the door to a possible RBS-led bid for ABN Amro in the coming weeks, also lent support.

Its retail affiliate Banesto was close behind, up 0.36 or 2.09% to 19.59.

Repsol YPF gained 0.44 to 26.91, after an upgrade at Citigroup to 'hold' from 'sell', and in line with other European oil majors amid rising oil prices.

Amongst utilities, Union Fenosa added 0.06 to 43.57, after JP Morgan said M&A potential gives upside to the utility's share price of up to 50 Eur per share, and Iberdrola declined 0.23 to 40.89, while Endesa gained 0.07 to 40.19.

Gas Natural fell 0.35 to 44.16 after JP Morgan initiated the stock as 'underweight' with a 39.5 Eur price target, saying that an 'unlikely' hostile bid is already priced in.

Meanwhile, Iberia was down 0.02 to 3.90, underperforming the market after comments by BA chief executive Willie Walsh took the wind out of the sails of hopes for an M&A announcement.

And bringing Europe to a close this week we go to Athen where Greek shares closed higher, but off early gains, as the market found resistance at the 4,900 level.

The ASE general index finished up 0.4% at 4,886.8, while the blue chip index ended 0.5% higher at 2,630.3. Mid caps closed flat at 6,135.2 and small caps outperformed, up 0.8% to 1,027.4.

Advancers outnumbered decliners 149 to 10, while 59 were unchanged in moderate volume of 375 mln Eur.

Refiner Hellenic Petroleum led blue chip gainers and rose 1.9% to 11.56 Eur on stabilizing crude oil prices. Peer Motor Oil also closed higher, up 1.4% to 21.84 Eur.

Alpha Bank gained 1.6% to 22.64 Eur, rebounding from recent selling pressure.

Greek Postal Savings Bank dropped 0.7% to 18.66 Eur as investors cashed in on gains after recently outperforming.

Household chemicals and products maker Lamda Detergent jumped 7.5% to 10.54 Eur after broker Deutsche Bank raised its target 47% to 13.4 Eur and kept it at buy.

Investment company Marfin Investment Group (MIG) climbed 6.9% to 23 Eur after a recent briefing for press and analysts that seemed to please investors.

Bank of Piraeus edged 0.3% higher to 28.1 Eur after it announced it reached an agreement to acquire 78% of Ukraine's International Commerce Bank (ICB).

Mobile operator Cosmote slid 0.4% to 22.4 Eur. Thomson Financial consensus forecast see 2007 first quarter group net profit coming in flat at 75.3 mln Eur when it announces its results next Thursday, May 24.

Technical Olympic spiked 9.4% to 1.73 Eur after its American unit TOUSA announced it will be granted a 500 mln Eur loan from Citigroup without the parent companys guarantee.

UK Market - Kelda, the owner of Yorkshire Water, was among the top performers as the FTSE 100 surged to a six and half year high.

Shares in the utility company climbed 3.2% to 976½p amid talk that it could be a leveraged buy-out target.

Analysts believe there will be one more deal in the sector before the next regulatory review and they see Kelda, with its conservative balance sheet, as vulnerable

In a recent research note, Merrill Lynch said the perfect time for a predator to strike would be when Kelda completes its £750m capital return next month.

In the wider market, the FTSE?100 advanced 61.6 points, or 0.9%, to 6,640.9 – its highest finish since September 7 2000. Over the week, the blue-chip index added 75.2 points, or 1.1%.

The heavyweight oil sector provided the backbone for Friday's advance. Royal Dutch Shell added 2.5% to £19.06, taking its gains over the past two sessions to 6.2%, as rumours of a merger with BP, up 2% to 582p, continued to swirl the market.

Elsewhere in the sector, BG rose 1.3% to 780p amid suggestions of predatory interest from Exxon Mobil

Traders said oil stocks had also benefited from sector rotation.

Indeed, it was a powerful performance from second-line oil exploration stocks that helped the FTSE 250 end 59.2 points, or 0.5%, higher at 12,202.8.

Mining stocks were also in demand Friday. Vedanta Resources rose 4.5% to £14.76, while Lonmin gained 2.8% to £38.44 and BHP Billiton added 1.5% to £11.98.

Anglo American added 2.1% to £28.75 as details emerged about the demerger of its paper and packaging business Mondi, which is expected early next month.

For every 20 Anglo shares, investors will receive five London-listed Mondi shares and two Johannesburg-listed Mondi shares, dealers said.

On a more speculative tack, Royal & Sun Alliance rose 1.9% to 172.1p amid rumours that Axa of France was plotting a 220p-a-share bid.

Not everything was going up, however. British Airways sank 2.9% to 487p after annual results fell short of expectations and the airline said it had set aside £350m to cover any possible fines from a price-fixing investigation.

Kingfisher, the DIY retailer, eased 1.3% to 257½p under the weight of a HSBC downgrade to “underweight”.

Aegis, the media buying group, was among the best performers in the FTSE?250. Its shares were marked 4.2% higher at 150p after Microsoft paid $6bn (€4.4bn, £3bn) for Aquantive, an online advertising company.

Aegis has a large internet advertising division called Isotar, which accounts for about 20% of group turnover.

The Microsoft deal also provided a fillip for market research group Taylor Nelson Sofres, up 4.8% to 267½p.

F&C Asset Management firmed 1.9% to 186.5p. After the market closed, Morgan Stanley said it had completed the sale of 44m F&C shares on behalf of Eureko, the Dutch insurer.

The stock was placed with institutions at 181p. Eureko's stake in F&C now stands at 10.6%, down from 19.7%.

Mitie Group, the support services company that cleans the crown jewels, added 3.1 to 252¼p after a push from Evolution Securities.

The broker said full-year results, due on Monday, were unlikely to disappoint.

Japan & Asia Pacific - Shares across the Asia-Pacific region closed mostly lower on profit-taking, with the Hong Kong market falling on fears about overheating in the China bourses and the likely impact on Hong Kong of a crash.

Tokyo shares finished lower as investors tracked the losses on the market for start-ups amid a dearth of fresh leads, dealers said.

Investors also refrained from active buying ahead of the release of banks' financial results for fiscal 2006 next week.

The Nikkei 225 Stock Average closed down 99.02 points or 0.57% at 17,399.58, after moving between 17,320.81 and 17,563.53 . The index lost 0.88% for the week.

The TOPIX index of all first-section issues dropped 11.58 points or 0.68% to 1,695.69, after trading between 1,689.70 and 1,712.11. It fell 1.6% over the week.

The Tokyo Stock Exchange's Mothers market for start-up companies shed 1.9% to 813.18, while the Jasdaq index shed 0.6% to 2,002.36.

Hong Kong stocks fell 0.4% on Friday, tracking weaker Shanghai-listed stocks, as the prospect of further monetary tightening by China sent mainland commodity and financial plays lower.

Hong Kong property developers also underperformed as expectations dimmed for a rate cut after the latest U.S. economic data suggested the U.S. central bank was likely to hold rates steady in the near-term.

Among the few bright spots, China's top offshore oil and gas producer CNOOC Ltd. jumped 1.7% to HK$7.15 after saying it had successfully brought on-stream an oilfield in the South China Sea.

The market pared the morning's losses as buyers rushed in late in the session, helping the benchmark Hang Seng Index ending at the day's high of 20,904.84. The China Enterprises index of mainland H shares finished down 0.8%, near the day's high at 10,859.17.

Turnover stood at HK$56.4 billion (US$7.2 billion) compared with Thursday's HK$62.5 billion.

For the week, the Hang Seng was up 2.1%, the sharpest in nearly two months, following Monday's record-setting rally in the wake of China's move to let banks invest their clients' money in overseas equities. H shares posted a 4.5% gain to mark their best weekly performance in 4-½ months.

In Mainland China A-shares in Shanghai and Shenzhen closed mixed with concerns emerging about possible fresh interest rate hikes following recent central bank comments.

The benchmark Shanghai Composite Index, which covers both A- and B-shares listed on the Shanghai Stock Exchange, closed down 18.04 points, or 0.45%, at 4,030.26 after moving between 3,999.17 and 4,052.10.

The key index rose 0.21% for the week, posting its ninth consecutive weekly gain.

Turnover fell to 173.64 bln Yuan from 187.79 bln in the previous session.

Central bank governor Zhou Xiaochuan said China may consider more interest rate hikes to fight inflation.

Banks struggled after Zhou's comments, with China Minsheng Banking Corp Ltd  down 0.32 Yuan or 2.33% at 13.41.

China Merchants Bank Co Ltd was down 0.46 Yuan or 2.17% at 20.76. CITIC Bank Co Ltd was down 0.20 Yuan or 1.82% at 10.81.

Bank of China was down 0.10 Yuan or 1.69% at 5.81. Industrial and Commercial Bank of China was down 0.07 Yuan or 1.26% at 5.49.

Shanghai Pudong Development Bank Co Ltd, in which Citigroup holds a 3.78% stake, was down 0.20 Yuan or 0.72% at 27.74 after it announced the issue of up to 9 bln Yuan in subordinated bonds to boost its capital adequacy ratio (CAR).

South Korean stocks closed lower Friday as foreign and institutional investors unloaded tech shares, with chipmakers leading the losses on concern over low memory chip prices.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 3.33 points, or 0.21%, to 1,612.25. Volume was moderate at 447.6 million shares worth 4.34 trillion won (US$4.65 billion), but winners outnumbered losers 390 to 364.

Investors dumped chipmakers as falling prices of dynamic random access memory (DRAM) are not likely to recover soon.

Tech losses weighed on the market. Tech bellwether Samsung Electronics, the world's second-largest computer memory chipmaker, shed 2.12% to 554,000 won. Hynix Semiconductor, the world's third-largest memory chipmaker, fell 3.14% to 29,300 won.

But flat-panel giant LG Philips LCD advanced 1.69% to 39,150 won on a bright outlook for the industry.

Financial shares traded in negative territory with top lender Kookmin Bank dropping 0.83% to 83,700 won.

Builders gained ground on expectations for a business recovery. Top builder Daewoo Engineering & Construction gained 1.96% to 26,000 won. 

Taiwan shares dipped as gains in chip makers were erased by losses in other sectors.

The Weighted Price Index of the Taiwan Stock Exchange fell 3.82 points, or 0.1%, to close at 8034.14.

The electronics subindex gained 0.2%.

Contract chip maker Taiwan Semiconductor Manufacturing rose 1.2% at NT$68.5 after it priced 240 million American Depository Receipts higher than expected at US$10.68 each.

The petrochemical subindex ended down 0.4%, as investors took profits after strong gains over the past few days.

Elsewhere, Thailand's market rallied in vibrant trade, as foreign buying in blue chips propelled the main index to rise 0.6% to 728.76, a new five-month closing high.

Malaysian shares ended down 0.2% at 1 356.84 in moderate volume, as investors unwound positions ahead of the weekend.

Philippine shares rose to a record finish, as investors continued to cheer the peaceful conduct of Monday's mid-term elections and the robust first-quarter earnings of most blue chips. The benchmark 30-company Philippine Stock Exchange Index rose 31.49 points to a record high close of 3 449.18.

Singapore's benchmark Straits Times Index closed down after reaching all-time highs in the last two days, and traders said consolidation should continue next week. The index closed 13.1 points lower to 3 512.40 points. 

Australian stocks slumped to end the week lower after resources stifled the market amid weaker commodity prices.

At the 1615 AEST close, the benchmark S&P/ASX200 index was down 53.4 points at 6312.5, while the all ordinaries shed 50.4 points to 6319.7.

On the Sydney Futures Exchange, the June share price index contract retreated 67 points to 6327 on a volume of 16,843 contracts.

BHP Billiton descended 77 cents to A$30.71, while Rio Tinto backtracked A$1.39 to A$90.91 and Fortescue Metals slumped A$2.95 to A$34.45.

Qantas shares gave back three cents to A$5.22 after its chairwoman Margaret Jackson and board member James Packer quit the airline's board after Airline Partners Australia's (APA) failed A$11.1 billion takeover bid.

Mr Packer's PBL surrendered six cents to A$20.94, after Eddie McGuire announced he will step down as chief executive of Nine Network but insisted he wasn't pushed.

Elsewhere in media Fairfax was 13 cents weaker at A$4.97, News Corp added four cents to A$28.45 and its non-voting stock climbed 15 cents to A$26.40.

Energy interests were mixed, with Woodside swelling eight cents to A$43.32 but Santos relinquishing 11 cents to A$12.69.

Banks were mostly higher, with Commonwealth finding 11 cents to A$54.63, ANZ lifting five cents to A$29.87 and Westpac ahead five cents at A$27.00, but NAB reversed 21 cents to A$42.98.

Retailers were mostly lower, with Australia's largest grocer Woolworths tumbling 59 cents to A$28.22 and Coles retreating 11 cents to A$17.66, but David Jones managed to eke out a gain of two cents to A$5.28.

The most traded stock of the day was minerals explorer Jervois Mining, which ended up 0.7 cents at 2.9 cents after it said it was continuing talks with a Chinese investment company for a joint venture to develop its Young nickel laterite project in south-western New South Wales.

Preliminary turnover was 266.46 million shares worth A$7.29 million.

Preliminary market turnover was 1.77 billion shares worth A$5.34 billion, with 570 stocks up, 717 down and 336 unchanged.

The New Zealand share market was up five points on Friday, closing on a record high of 4278 on market turnover of $295 million.

Telecom was up 7 cents to $4.84 on speculation that Vodafone could be pulling out of New Zealand.

Fletcher Building dropped 26c to $12.49 after reaching record levels on Thursday.

Auckland International Airport rose 3c to $2.69, while Fisher and Paykel Healthcare dipped 7c to $3.61 ahead of next week's earnings result

Mainfreight increased 5c to $7.05, while Sealegs was up is up 4c to 96c after revealing an 86% rise in annual revenues.

Tower rose 12c to $2.42 ahead of its maiden profit result as a split New Zealand operation next week.

In the currency markets: at 5.20pm the New Zealand Dollar was buying 72.85 US cents, 88.70 Australian, 36.89 pence, 88.34 Yen and 0.5400 Euro.

Commodities - Brent crude futures fell back under $70 a barrel Friday, down from an eight-month high reached on Thursday.

ICE Brent futures for July delivery eased 83 cents to $69.45 a barrel in late afternoon trade in London, having reached $70.35 in the previous session, their highest level since early September.

Brent rose more than 3% on Thursday amid fears about US petrol supplies this summer.

Brent prices were up almost 4% on the week. June West Texas Intermediate added 26 cents to $65.12 a barrel in early afternoon trade on the New York Mercantile Exchange.

Refiners operated by ConocoPhilips, BP and Murphy Oil announced this week that some of their refineries would be temporarily shut down for either technical glitches or maintenance work.

US gasoline futures have held on to most of their gains this week. June Nymex gasoline futures were steady at $2.4354 a gallon. The benchmark gasoline contract has risen more than 3% this week. US petrol refiner margins are at more than $30 a barrel.

Gold prices partially recovered some of their losses Friday, adding $3 to $660.65/$661.15 a troy ounce. Gold prices were down $10 on the week.

Platinum prices also eased this week, a period when producers, consumers and traders were in London for their annual get-together.

Platinum prices were$7 up Friday at $1,307 a troy ounce, but down $21 on the week.

Copper also found some support Friday having dropped more than 4% on Thursday. The three-month copper price added $21 to $7,272 a tonne on the London Metal Exchange.

Nickel prices were also higher, gaining $1,700 to $50,500 a tonne.

Metal prices have fallen because of concerns that demand from China, the world's largest consumer of industrial metals, may introduce further measures to curb the prospect of overheating in the economy.

This fear is based on the introduction of steel export taxes this week in an effort to slow China's rising steel exports.

The front month robusta coffee price rose to an eight-month high on Friday on concerns about falling stockpiles given strong demand and weaker production this year.

May robusta futures added $13 to $1,727 a tonne on Euronext-Liffe, and were up about 11% this week.

Robusta coffee futures for the second month hit an eight-year high of $1,735 a tonne, before easing to $1,728 late in the afternoon, up $10 on the day.

Raw sugar futures hovered close to a two-year low Friday, trading at8.66 cents a Pound, down 0.02 cents on the day, and down more than 6% on the week.

Cocoa rose to a 10-month high of $1,094 a tonne Friday on concerns about the west African mid-crop.

Currencies - Japan's Yen briefly rallied against all the main currencies Friday after China raised interest rates and widened the RMB's trading band against the Dollar.

Immediately after the decision by the People's Bank of China, the Yen, which is often traded as a proxy for the Chinese currency, rose 0.4% against the Dollar to Y120.70.

Against the Euro, the Yen rallied 0.4% to Y162.97 and gained 0.5% to Y238.29 versus Sterling.

The PBoC said on its website that it was increasing its one-year lending rate by 0.18%age points to 6.57% and lifting its one-year deposit rate by 0.27%age points to 3.06%. It added that the reserve requirement ratio for banks would rise 0.5%age points to 11.5%.

The central bank began its move with an increase from 0.3% to 0.5% in the RMB's daily trading band against the Dollar.

The Yen's bounce?was fleeting, and by midday in New York Friday the Japanese currency stood at Y121.23 against the Dollar, down 0.9% on the week. Against the Euro, the Yen fell 0.5% to Y163.52 and it was 0.4% lower against the Pound at Y239.19.

The Dollar enjoyed gains this week in spite of weaker than expected consumer price inflation on Tuesday.

The US currency was up 0.2% over the week against the Euro at $1.3503 and climbed 0.3% against the Pound to $1.9757.

Sterling was further undermined Friday after weaker than expected monthly retail sales raised the spectre of a consumer slowdown.

The Pound fell 0.1% against the Euro to £0.6833.

Canada's Dollar hit a 29-year high against its US namesake as the country's central bank raised annual growth forecasts and retail sales came in two times stronger than expectations. The currency rose 2% to $1.0883.

Brazil's real this week broke through R$2 to the Dollar for the first time in six years as emerging market currencies notched up multi-year highs, driven by a strong appetite for risk.

Some of this unfolded Friday after China's move, but the real gained 2.8% to R$1.9619. During the week the Turkish lira added 1.4% against the Dollar to TL1.3255, its highest for the year.

The Philippine peso hit a six-year high and ended the week up 1.6% to the Dollar at 46.38 pesos.

The Korean Won ended at 934.1 Won to the U.S. Dollar, down 6 Won from Thursday's close, as foreign exchange authorities stepped in to keep the Won from rising.

The RMB, after all its fame yesterday, finished at a new record high of 7.6686 to the Dollar on the over-the-counter (OTC) market, from 7.6707 Thursday.

China - As mentioned under my "currencies" roundup, China announced yesterday it would widen the trading band of its currency and raise interest rates, apparently to counter foreign criticism of its exchange rate and rein in its runaway economy.

The moves came ahead of a high-level meeting in Washington next week during which China and the United States are expected to discuss major thorns in their trading relationship, of which the currency rate is the biggest.

The interest rate hikes, meanwhile, were widely anticipated as China seeks to cool an economy that grew at a blistering 11.1% rate in the first quarter of the year.

The currency trading range will be broadened to 0.5% either side of a daily reference rate against the US Dollar from the previous 0.3%, with effect from Monday.

The currency closed at 7.668 to the Dollar yesterday, the latest in a series of recent record highs amid upward pressure on the Yuan.

The move also comes as the finance ministers of the world's richest countries gather in Germany for the annual Group of Eight meeting.

The central bank also said beginning Saturday it would raise the benchmark for one-year lending rates by 0.18%age point to 6.57 perc ent and hike the deposit rate by 0.27%age point to 3.06%.

The move was intended to ensure “reasonable growth” in investments, and keep prices stable, the People's Bank of China said in a statement on its website.

The interest rate hike was China's fourth since April of 2006, signalling its determination to cool a liquidity-driven investment boom and a skyrocketing stock market.

How will this impact the Cinese stockmarket on Monday when it opens? You will see a correction in the market, possibly a sharp one. Banks will be among the biggest losers on Monday when markets open I feel because their business relies too much on lending. Investors have been worried about that for a long time.

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The contrast in events at the headquarters of the World Bank this week and those in Shanghai at the African Development Bank's annual meeting served to underline just how great an impact China's rapidly evolving interest in Africa is having.

While the Europeans and Americans were fighting over Paul Wolfowitz's future as president of the World Bank, the Chinese were busy courting African finance ministers and central bankers, traditionally the World Bank's foremost clients.

They laid on banquets, gymnastic shows and special tours for ministerial spouses. Meanwhile, the Chinese Exim bank, according to Donald Kaberuka, the AfDB's president, rolled out proposals for a $20bn round of fresh trade and infrastructure financing in Africa.

The AfDB is caught in the middle. It is keen to engage the Chinese authorities in a strategic discussion over the continent's future. It is also encouraged by the prospect – which predates the troubles at the World Bank but could be enhanced by them – of becoming a more important player as regional development banks come into vogue.

But it still relies on partnership with the World Bank and IMF and the funding it receives from traditional donors. Mr Kaberuka, a former finance minister in Rwanda, sees the bank as having an important role to play bridging the gulf.

“The African Development Bank is a common vehicle for Africa. A number of Asian actors – Japan, Korea, China, India – can use this vehicle to channel resources to Africa,”

“What we discussed with [Chinese] Exim bank officials is how this can be done. You will be seeing much more collaboration between us and Exim bank in the coming months.”

As China ramps up its aid, trade and project financing to Africa in a bid to secure resources for its booming economy, tensions are however emerging with traditional donors, mostly in the west.

Since the end of the cold war, and in many cases long before that, the money OECD countries have provided has given them unrivalled leverage over African governments to promote their model of development.

The figures show that China is not yet a big provider of soft loans to the continent.

There was a lot of talk about a new Chinese model for African development at the Shanghai meeting. But interventionist states have a bad record in Africa. There is not much evidence yet that China could provide an alternative to the market reforms promoted by the Bretton Woods organisations.

China's mercantile interests on the continent are nevertheless changing the dynamics. Traditional donors from the west have used the budget support they provide to governments to encourage political as well as economic reforms. Their companies have also gained market access and contracts in the process.

The Chinese are using credit lines to secure their own market access and a growing share of oil and mining concessions.

The advantage for African governments with poor records in economic management and human rights is that the Chinese do not try to change the way they govern.

The problem, traditional donors contend, is that if they do not change, new loans will eventually turn into a new African debt crisis.

Mr Kaberuka acknowledges this challenge. “We are all trying to have an MOU with the Chinese on best practices,” he said. “Instead of finger-pointing at China, I think it would be better to bring them in. I'm sure they have their own position, so engage them.”

However, the onus was ultimately on Africans, he said, to ensure their new relationship with China was beneficial.

“My take on this is that it is Africa and Africans who should try to define and influence the relationship. It is not the Chinese.”