US Markets - Wall Street shares had their worst week since the end of July after weak corporate earnings hit confidence in the outlook for the US economy.

On the anniversary of the 1987 market crash, the S&P 500 fell 2.6% at 1,500.63, its biggest one-day fall since the credit-squeeze hit in mid-August. The index was down 3.9% on the week.

The Dow Jones Industrial Average fell 2.7% on Friday and 4.1% for the week, at 13,521.29.

The Nasdaq Composite was down 2.7% on Friday and 2.9% for the week at 2,725.16.

Small cap stocks suffered some of the biggest falls. The Russell 2000 index was 5% lower this week at 798.78. All the leading 10 sectors of the S&P 500 were lower this week.

Technology groups continued to outperform the market, while financials and consumer discretionary sectors fared worst. Consumer staples performed best – a traditional bellwether of negative economic sentiment. Traders expect continued volatility in share prices. The Chicago Board Options Exchange VIX index rose 28.5% this week to 22.79.

Bluechip companies led the heavy falls on Friday amid continuing concerns about the outlook for corporate earnings.

The Dow Jones industrial average dropped more than 360 points Friday -- the anniversary of the Black Monday crash 20 year ago -- as renewed credit concerns, lackluster corporate earnings and rising oil prices spooked investors.

The market turned sharply lower in late afternoon when Standard & Poor's again reduced its ratings on residential mortgage-backed securities. The latest reduction, on more than 1,400 types of securities, added to investors unease about credit quality.

In addition, mixed results from Dow components Caterpillar Inc., Honeywell Inc., and 3M Co. gave investors little incentive to take chances on the market. And oil prices added to investors' list of concerns after briefly moving above the psychological barrier of $90 per barrel for the first time.

In one bright spot, Google Inc. reported stronger-than-expected profits, drawing a number of analyst upgrades.

Friday's pullback pales in comparison to what traders on the floor of the New York Stock Exchange had to contend with 20 years ago. On Oct. 19, 1987 -- Black Monday -- the Dow plunged 23% amid concerns about interest rates and slowing economic growth. A decline of similar proportion given the market's current levels would mean a drop of some 3,000 points.

A decline Friday in the NYSE composite index proved steep enough, however, to trigger trading curbs, which puts restrictions on certain types of sell orders. These protections were set up in part in response to Black Monday.

Bonds prices rose again Friday, extending a rally to an unusual five sessions. The yield on the benchmark 10-year Treasury note, which moves inversely to the price, fell to 4.40% from 4.50% late Thursday. The Dollar was mixed against other major currencies, while gold prices fell.

After touching $90.07 overnight, light, sweet crude fell 87 cents to settle at $88.60 on the New York Mercantile Exchange. Prices have spiked due amid forces such as a weak Dollar and thin supplies at a key Midwest oil terminal.

Caterpillar, one of the world's largest construction equipment makers, fell $4.09, or 5.3%, to $73.57 after its third-quarter earnings rose 21% but fell short of Wall Street's expectations. In addition, the company lowered its full-year forecast.

Honeywell International Inc., the diversified manufacturer, turned in a 14% increase in its third-quarter earnings. The company raised its forecast for full-year earnings to the high end of its previously targeted range. An analyst, however, described profit margins at the company's transportation and automation and controls segments as disappointing. The stock declined $2.37, or 3.9%, to $58.32.

3M, the maker of Scotch tape and Post-It Notes, said quarterly profit jumped 7% on strong growth across all regions, but sales missed expectations. The company raised its profit outlook for the full year. But the company announced plans to cut prices on its profitable films for LCD television screens. The stock fell $8.11, or 8.6%, to $86.62.

Wachovia Corp. fell $1.74, or 3.6%, to $46.40 after reporting third-quarter profits fell 10% due to write-downs related to difficult credit market conditions. The nation's fourth largest bank signaled increasing credit troubles ahead and said there would be staff cuts.

Bank of America, off 8.6% at $47.57, added to sector woes when it revealed a 32% fall in third-quarter earnings and set aside $2.03bn in credit-loss provisions. Washington Mutual was down 17.4% at $29.09 after its earnings fell 72% in the third quarter. E*Trade Financial, down 21.4% at $10.71, and KeyCorp, 13.1% lower at $28.69, both disappointed investors this week.

The S&P financial index declined 7.6% this week at 439.57, while the investment bank index fell 8.7% at 195.86. Technology stocks had mixed fortunes. Google hit a record high but Ebay fell. Credit Suisse raised its price target on Google to $800 after it increased profit 46% and revenues grew 57% in the third quarter. The shares were up 1.1% on the week at $644.71.

Intel was up 2.9% at $26.30 after third-quarter profit rose 43%. Revenues rose 15%. Yahoo, up 1.9% at $29.03, also cheered investors after reporting a smaller than anticipated earnings fall.

But Ebay was 8% lower at $36.72 on the week after it reported a big third quarter loss because of the writedown of Skype, its web-based phone service and amid worries about fee cuts.

Fast food restaurants also experienced divergent fortunes. McDonald’s, was only 1% weaker at $56.42 after it increased third-quarter profit 27%. But Domino’s Pizza was down 13.7% at $14.46 after third quarter profit dropped 55%

Declining issues outnumbered advancers by more than 5 to 1 on the New York Stock Exchange, where volume came to 1.79 billion shares compared with 1.27 billion shares traded Thursday.

The Dow Transport index was 2.8% lower on the week at 4,801.36. CSX, the railway operator, announced a 24% rise in third-quarter profit. Shares rose 4.7% at $44.62.

European Markets - The European markets fell on Friday, as banking stocks declined after disappointing earnings from another US bank Wachovia Corp. fueled concern that the worst of the credit market turmoil is not yet over.

The markets were also impacted by a weakening US Dollar, which slid to a record low against the Euro today on speculation that the US housing slump will lead the economy into recession, forcing the US Federal Reserve to cut interest rates again. A weaker Dollar eats into the profits of European export-oriented companies that produce their goods in Euros and sell in Dollars.

The FTSEurofirst 300 index of pan-European blue chips closed 0.6% lower at 1,563.83 points, while the narrower DJ Stoxx 50 index fell 0.7% to 3,819.90 points.

So let's go around the Regional Markets and start in France where Paris's CAC-40 share prices ended lower Friday, dented by early losses on Wall Street where investors reacted nervously to soaring oil prices and showed disappointment over the latest quarterly earnings.

The CAC-40 index finished down 26.76 points or 0.46% at 5,740.48. Among CAC-40 stocks, 16 closed higher and 24 closed lower. On the Matif, October CAC-40 futures were trading at 5,750.

On the broader indices, the SBF-80 index closed down 26.14 or 0.38% at 6,885.38 while the SBF-120 ended 18.99 or 0.45% lower at 4,186.00.

The fall in Paris shares was not as severe as in Wall Street, thanks to strong upward movement from several stocks, particularly aerospace supplier EADS, whose shares soared following talk of a major A350 order from leasing company ILFC. At the close, EADS shares were trading at 23.86, up 3.60%.

Shares in Vallourec, the CAC-40's second biggest mover, were trading at 209.66, up 1.13% as talk of a bid returned, with some analysts saying shareholder Bollore has already agreed to tender his 4% stake in the group to Gazprom.

Europe's banking sector took a further blow after disappointing earnings results from America's fourth-largest bank, Wachovia. Dexia led the fallers in the sector, shedding 2.32% to 21.86, after outperforming its peers in recent weeks. Societe Generale fell 0.99% to 116.3, BNP Paribas slipped back 1.25% to 75.67 and Credit Agricole shed 1% to 26.63. In insurance, Axa fell 1.31% to 30.08. The five financial players have a combined index weighting of just under 20%.

Carmakers Renault and Peugeot featured among the CAC-40's biggest losers after outperforming the market yesterday. Peugeot was down 2.40% at 56.63, while Renault was down 2.42% at 106.05. Insecurity over oil prices struck a blow to Air France shares, down 2.37% at 25.99.

The biggest bluechip faller was Accor, down 2.45% at 64.98.

To Frankfurt now where German shares closed slightly lower in quiet trading, dragged down mostly by financial stocks on the back of those negative comments by an investment bank on the banking sector.

The DAX ended down 37.28 points or 0.47% to 7,884.12 after trading within a range of 7,870.73 and 7,940.29 during the day. The MDAX lost 77.93 points or 0.74% at 10,451.15 while the TecDAX fell 10.80 points or 1.08% at 989.78.

DAX futures lost 60.50 points or 0.76% at 7,941.00 while bund futures gained 0.85 or 0.75% at 113.47.

Commerzbank led losses in the sector, losing 0.69 Eur or 2.24% at 30.14, followed closely by Deutsche Postbank, down 1.13 or 2.17% at 50.88.

Allianz fell 3.32 or 2.08% at 156.14, Deutsche Bank eased 1.33 or 1.48% at 88.82 while Hypo Real Estate declined 0.58 or 1.34% at 42.58.

On the upside, Volkswagen was the top performer, adding 1.93 or 1.10% at 177.50 amidst continuing speculation that it and the Wallenberg family -- both main shareholders in Swedish truckmaker Scania AB -- have reached an understanding that Scania would make a bid for German truckmaker MAN AG.

MAN itself was the third best performer, capping its winning streak this week to close 1.05 or 0.86% at 123.01. Goldman Sachs raise its price target on MAN to 152 Eur from 130 while reiterating its 'buy' rating saying speculation of a takeover or tie-up with Swedish peer Scania AB was largely behind the price hike.

Infineon Technologies was the biggest loser on the blue chip board, shedding 0.34 or 3.10% at 10.62.

Lufthansa was off 0.56 or 2.70% at 20.21, which traders said could be traced to rising oil prices.

Siemens finished unchanged at 91.36 after vague rumours that it might be planning to issue a special dividend this year -- which had driven the shares higher earlier -- had largely subsided.

ProSiebenSat.1 was the biggest loser on the MDAX, easing 1.90 or 8.74% at 19.85.

EADS, up 0.78 or 3.39% at 23.81, was the top performer.

Over on the TecDAX, GPC Biotech lost 0.41 or 4.83% at 8.07 while MorphoSys added 0.83 or 1.87% at 43.01.

Into Belgium now where Brussels shares closed lower, with healthcare group Omega Pharma tumbling over 18% following its profit warning last night.

At the close, the Bel 20 was down 41.36 points or 0.93% at 4,416.42.

Omega Pharma plummeted 11.26 Eur or 18.61% to 49.26 following a profit warning which reduced full-year sales forecasts to 780-800  million Eur from 830-850  million.

Rabo cut its target price on the stock to 66 Eur from 73, but maintained its 'buy' rating.

Analysts said in a note to clients: 'We believe this issue is largely temporary and continue to believe in the promising long-term outlook.'

Peer Solvay closed up 2.62 Eur or 2.54% at 105.70 as UBS upped its recommendation 'neutral' from 'sell'.

Telecoms group Mobistar climbed 0.84 Eur or 1.39% to 61.30. French press reported that France Telecom is considering either increasing, or divesting, its 50.2% stake in the group.

Further press reports suggested that Mobistar is considering a merger with peer Telenet.

ING maintained its 'hold' and 63 Eur target price on the stock, while Dexia maintained 'buy' and a 73.5 Eur target.

Rabo maintained its 'buy' rating and 73 Eur target, whereas KBC maintained its 'accumulate' recommendation and 62 Eur target price.

Telecoms peer Belgacom rose 0.19 Eur or 0.57% to 33.53 after the group said it would pay out a 0.51 Eur per share dividend.

Dexia increased its target price to 35.1 Eur from 33.8, maintaining its 'add' rating.

Degroof increased its target price to 32.75 Eur from 31.75, maintaining 'hold' rating, while ING reiterated its 'buy' and 35 Eur target price, and KBC maintained its 'accumulate' and 31 Eur target price.

Local press reported that the Belgian government is considering divesting its 53.5% stake in Belgacom, which could raise 5.5-6.0  billion Eur.

Among the financials, Dexia fell 0.47 Eur or 2.10% to 21.86, KBC closed down 1.75 Eur or 1.79% lower at 96.10, and Fortis closed up 0.19 Eur or 0.85% at 22.55.

Utility Suez inched down 0.10 Eur or 0.23% to 43.81, while brewer InBev fell 2.01 Eur or 3.08% to 63.30.

Imaging technology company Agfa-Gevaert added to yesterday's huge losses, falling 0.13 Eur or 1.22% to an all-time low off 10.52 Eur. Rabo cut its target price to 10 Eur from 16, while KBC reduced its 2007 EPS forecast to 0.66 Eur from 1.12 and its 2008 outlook to 0.97 Eur from 1.41, while maintaining a 'reduce' rating and 12 Eur target price.

Outside the Bel 20, shipping group CMB climbed 2.35 Eur or 3.91% to 62.45, while biotech group Thrombogenics shaved off 0.37 Eur or 3.85% at 9.23.

Shares in Amsterdam dragged The Netherlands' bourse broadly lower, while Hagemeyer made strong gains amid renewed speculation of a new takeover bid on the company.

The AEX closed 0.48 points or 0.09% lower at 551.05, after trading in a range of 549.44-554.38.

ASML led decliners, dropping 1.70% to 24.26 Eur in profit-taking after yesterday's gains.

TNT shed 1.33% to 29.01 Eur, Unibail-Rodamco lost 1.10% to 172.78 and SBM Offshore shed 1.16% to 27.18 Eur.

Corporate Express dropped 0.91% to 7.65 Eur and Royal Dutch Shell lost 0.84% to 29.54 Eur.

On the other end of the spectrum, Fortis rose 1.03% to 22.54 Eur amid news that ABN Amro -- now partly owned by Fortis -- has sold its stake in Unicredito.

Ahold rose 0.54% to 11.20 Eur after a price target hike at Theodoor Gilissen.

Heineken added 0.93% to 46.59 Eur amid reports that investment group Capital Group has reduced its stake in Scottish&Newcastle, on which Heineken may put out a takeover bid together with Carlsberg.

Hagemeyer surged, adding 3.80% to 4.92 Eur, amid speculation that another company than bidder Sonepar may put out a higher takeover bid.

Among midcap shares, losers also outpaced winners. LogicaCMG dropped 1.72% to 2.28 Eur, Wereldhave shed 1.89% to 80.06, SNS Reaal dropped 1.67% to 16.44 Eur and Van der Moolen shed 1.37% to 3.59 Eur.

Vopak gained 1.52% to 40.15 Eur, Boskalis added 1.37% to 40.06 and Wessanen led the few gainers, adding 2.44% to 10.92 Eur after an upgrade to 'buy' at SNS Securities.

Across to Austria now where in Vienna Shares closed slightly higher led by construction conglomerate Strabag, which raced upwards in very heavy dealing on its first day of trade.

The ATX closed 0.15% or 7.40 points higher at 4.4796.48. The ATX Prime closed down 0.16% or 3.62 points at 2.292.45.

On its first day of trade shares in construction company Strabag surged to close up 6.17% at 49.90 Eur. In its opening trade the stock had initially traded at 50 Eur having been issued to subscribers at 47 Eur, the top end of the 42-48 Eur subscription range.

According to the company, around 26% of the offering had gone to private investors, while the lions share had gone to institutional investors outside of Austria, with strong interest from Russia.

On Monday, Strabag will be promoted from the broader ATX Prime index and incorporated into the blue chip ATX index.

Shares in Erste Bank continued to rise for a second day on the back of a reported upgrade by brokerage Keeffe Bruyette Woods. Erste Bank ended the session up 0.77% at 57.70 Eur.

After buoying the index for most of the session on the back of rising steel prices, voestalpine reversed course just before the close and was sold down on profit-taking. It last dealt at at 61 Eur, down 0.28%.

OMV was 0.10% higher at 50 Eur at the close, the ongoing takeover saga with MOL once again weighing on investor confidence and muting gains to be made on the back of record oil prices.

Earlier, analysts at Oppenheim reiterated their 'buy' recommendation for OMV and confirmed fair value at 54 Eur after yesterdays third quarter trading statement.

Schoeller Bleckmann Oilfield closed at a new record level, up 1.67% at 74.98 Eur, thanks to oil prices.

Heavyweight Telekom Austria added 1.03% to 57.70 Eur, albeit in very slim trade. Earlier a board member of the company told a trade magazine it planned to cut expenses considerably in its fixed line division.

Shares in Verbund gained 0.40% to 42.37 Eur ahead of the publication of its nine-month results next Tuesday. A surge in wholesale electricity forwards over the past month has led the utility from strength to strength recently.

Also set to report earnings next week, RHI fell 0.60% to 34.85 Eur. The share is currently trading around the same level it was a year ago.

Industrial shares Andritz and Mayr-Melnhof Karton closed lower. Andritz shed 1.88% to 49.51 Eur, while Mayr-Melnhof fell 1.35% to 79.38 Eur.

Fellow industrial, A-TEC Industries, however added on the back of rising metals prices and last dealt at 160.48 Eur, up 0.93%.

Swiss shares closed sharply lower, tracking the DJIA down on investor disappointment with US third-quarter earnings and oil price worries.

At the close, the Swiss Market Index was 1%, or 90.28 points down at 8,937.2, and the Swiss Performance Index fell 69.25 points to 7,304.42.

The Euro was down at 1.6704 SFr, and the Dollar rose to 1.1716 SFr.

The SMI traded in negative territory, tracking Wall Street down, with disappointing third-quarter earnings results, higher oil prices and renewed Dollar weakness affecting trading, said a Bank Vontobel trader.

Moreover, the Swiss banking sector was impacted by US bank Wachovia's lower year-on-year third quarter earnings, with UBS down 1.2%, or 0.80 SFr to close at 64.75 and Credit Suisse falling 1.4%, or 1.10 SFr, to close at 77.90.

Julius Baer bucked the trend, partly reversing earlier losses to rise 0.50 SFr to close at 93.80.

The pharmaceuticals sector stayed in negative territory, with Novartis 0.55 SFr down to close at 61.65, and Roche 1.7%, or 3.60 SFr lower, closing at 204.20.

Earlier, Roche said a study has shown that its anaemia treatment Mircera, administered once a month, is as effective as currently available drugs. The group also said the European Commission has reinstated the marketing authorisation for Roche's HIV drug Viracept, as expected.

Syngenta was amongst the market's underperformers, dropping 2%, or 5.50 SFr to close at 269.50 after Citigroup downgraded its stance to 'sell' from 'hold' following the recent surge in its share price, saying its current share price is too high.

Nestle fell 2.00 SFr to close at 513.50.

The market's gainers included Richemont, 0.30 SFr higher to close at 80.70. Earlier, Morgan Stanley initiated coverage of Richemont as 'overweight', citing good share value and improving operating profit margins. Rival Swatch fell 1.4%, or 5.25 SFr to close at 375.50.

Outside the SMI, Actelion fell 4.8%, or 2.90 SFr to close at 58.10. Earlier, the pharmaceuticals group said it had received a negative opinion for an additional indication for its drug Zavesca from the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMEA).

Newly-listed Uster Technologies closed unchanged at 54 SFr. The stock listed on the SWX Swiss Exchange today with its offer price set at 52 SFr per share, representing a market capitalisation of 341.1  million SFr.

Valora rose 1.9%, or 5 SFr to close at 274 on press reports that investor group GoldenPeaks Capital Partners has bought an 11% stake in the Swiss retailer, which is widely considered to be a takeover target.

Up into Scandinavia now and starting in Sweden where Stockholm shares closed sharply lower, close to session lows after early weakness on Wall Street led to a sell-off in late trade, with Husqvarna diving after reporting far worse than expected third-quarter results.

The OMX Stockholm index closed down 1.53% at 380.04, while the OMX Stockholm 30 closed 1.49% lower at 1,169.69. Turnover amounted to 23.234  billion SKr.

Husqvarna B closed down 7.72% at 77.75 SKr after the outdoor equipment supplier said its third quarter profit after financials fell 16% from a year earlier to 391  million SKr, versus market expectations of 431  million SKr.

The company said the result was hit by substantially lower profit at its consumer products division in North America, increased borrowing, lower rebates, and higher interest rates.

At the company's conference call CEO Bengt Andersson said he now expects the company's garden equipment operation, Gardena to incur a significantly bigger second half loss than the 100-150  million SKr previously forecast.

He said most of the loss will fall in the fourth quarter of the year.

Ericsson B closed down 1.05% at 18.86, off an earlier low of 18.60. Ericsson chairman Michael Treschow said he still has confidence in CEO Carl-Henric Svanberg, but that Svanberg 'must sort out' the company's current situation, which culminated in this week's shock profits warning, Dagens Industri reported.

Saab B closed down 2.85% at 153.50 after reporting a nine-month pretax profit of 1.269  billion SKr versus market expectations of 1.307  billion SKr, as recorded by SME Direkt.

The rest of the market closed overwhelmingly sharply lower.

In the engineering sector, Sandvik closed down 2.97% at 130.75, SKF B down 2.65% at 128.75, and Atlas Copco A down 1.97% at 112.00.

Volvo B closed down 1.68 at 117.25 aftr disappointing results from US rival Catapillar.

Scania B closed down 1.14% at 173.50. Speculation that Volkswagen and Wallenberg family-controlled entities have agreed Scania will bid for MAN is being driven by market interests rather than hard facts, Sueddeutsche Zeitung reported citing sources familiar with the matter.

The sources said the story is rumour and only serves to drive the companies' share prices.

Elsewhere in the market, Skanska B closed down 1.89% at 129.50, Electrolux B down 3.13% at 139.50, Nordea down 0.46% at 107.80, Hennes & Mauritz B down 0.59% at 420.00, and TeliaSonera down 0.89% at 55.75.

Neighbours Denmark saw Copenhagen shares closed lower, led down by William Demant Holding on concerns about low sales of the group's high-end product, Epoq, and by Carlsberg on worries about the price and financing of a coming acquisition of Scottish & Newcastle, while DS Norden was higher on firmer bulk transport rates.

The OMXC20 index closed 3.48 points lower at 495.21 and the OMXCB Benchmark index shed 2.74 points to 474.70.

The OMXC All Share index closed 2.56 points higher at 485.96 on turnover of 3.88  billion DKr.

William Demant Holding closed 15.5 DKr lower at 422. Dealers said concerns about low sales of the group's high-end product, Epoq, since its introduction in May outweighed a raised stance at Handelsbanken.

The hearing aid maker was raised to 'buy' from 'accumulate' on valuation grounds at Handelsbanken, which said the share price has been falling on fears over the group's 2007 earnings prospects, but said "the correction now looks overdone".

GN Store Nord, which also makes hearing aids through its Resound unit, fell 1 to 56.

Vestas Wind Systems rose 2.5 to 444.5. According to daily Jyllands-Posten, the market believes Vestas will raise its financial targets and guidance in the group's third-quarter earnings report. The share price has risen by 35% in past five weeks despite few new orders, the daily said.

Carlsberg B was 2 lower at 710 following losses yesterday amid worries concerning the price and financing of a coming acquisition of Scottish & Newcastle.

The Times said, citing sources close to S&N, that the British brewer might sell its 50% stake in their joint venture Baltic Beverages Holding (BBH) or approach a white knight bidder to stave off the hostile takeover bid by Carlsberg and Heineken announced Wednesday.

Peer brewer Royal Unibrew fell 5 to 655, reversing yesterday's rise.

Danisco shed 8 to 402 and Novozymes was down 12 at 620.

DS Norden was 19 higher at 660 on firmer bulk transport rates. The stock was in focus today after broker Cantor Fitzgerald lifted its estimates for US bulk carriers, Sydbank said. This has resulted in US bulk carriers rising on the markets overnight.

DS Torm shed 2.75 to 212.75, while AP Moller-Maersk A was 800 lower at 69,700 and the B-shares fell 400 to 71,000.

ALK-Abello B shed 7 to 1,147. The group has started a tolerability study of a tablet-based vaccine against birch allergy, newswire RB-Boersen said.

Lundbeck fell 2 to 143 after recent rises on the back of news that the company recently initiated phase I clinical trials with the drug candidate Lu AA24493 for treatment of patients suffering from acute ischemic stroke.

Coloplast was 6 lower at 505. The UK Health Department has extended until Dec 28 the ongoing consultation process on revised proposals about the provision of stoma and incontinence appliances and related services to primary care, to allow the Department to receive further responses to the proposed classification of products. The process was previously due to end on Nov 29.

Novo Nordisk B added 1 to 608, while Genmab fell 3 to 363.

Elsewhere, Danske Bank was down 2 at 209, Topdanmark fell 7 to 873 and TrygVesta was 5 lower at 412.5, while FLSmidth closed the day 1 higher at 548.

Into Norway now where Oslo shares closed higher, led by Yara International after good third-quarter earnings and outlook, and by Belships, Golden Ocean and Jinhui Shipping on firmer bulk transport freight rates, while Ementor fell after its third-quarter earnings disappointed the market.

The OSEBX Benchmark index closed 0.52 points higher at 496.85 and the OSEAX All Share index rose 0.93 points to 575.58.

Total turnover amounted to 14.81  billion NKr.

Yara International closed 9.75 NKr higher at 186 after the group posted better-than-expected third-quarter results and issued a bullish outlook, which outweighed a warning of higher energy costs, dealers said.

The chemicals group reported pretax profits of 1.919  billion NKr, up from 1.454  billion last year, and ahead of the 1.260  billion consensus forecast of analysts contacted by Thomson Financial News.

Operating profits came in at 1.101  billion NKr, down from the previous year's 1.149  billion, but ahead of the 864  million consensus forecast. Sales, meanwhile, amounted to 12.828  billion NKr, up from last year's 11.898  billion, but below the 13.174  billion figure penciled in by analysts.

Yara said its performance was boosted by improving fertiliser margins, but looking ahead, it warned that rising energy costs were likely to impact on its financial performance, at least for the next six months.

Norske Skog rose 0.5 to 49.8. Yesterday, DnB NOR Markets hiked its stance to 'buy' from 'sell'. Today, however, Goldman Sachs (nyse: GS - news - people ) cut its target to 52 NKr from 64.7 on a reiterated 'neutral'.

Belships added 0.6 to 34 and Jinhui Shipping added 2.75 to 80.5. The stocks were in focus today after broker Cantor Fitzgerald lifted its estimates for US bulk carriers, Sydbank said. This has led to US bulk carriers rising on the markets overnight.

Golden Ocean put on 1.7 to 40.25. The shares rose both on the firmer transport rates and after Carnegie raised its EPS estimates for Golden Ocean for 2008 by 31% due to continued increases in charter rates.

Electromagnetic Geoservices added 1 to 84.25. The group Won a seabed exploration deal worth up to 16  million usd with an unnamed energy company. The deal is to determine the hydrocarbon content of potential reservoir structures offshore Libya using seabed-logging technology.

Petroleum Geo-Services was up 3 at 161.75, while Seadrill shed 1.5 to 127.75 and StatoilHydro fell 0.75 to 180.

DNO was up 0.05 at 10.7 after the group allayed investor concerns by saying its operations in Northern Iraq have to date been unaffected by tension between Turkey and Iraq's autonomous Kurdish government.

Ementor fell 5 to 49 after investors expressed disappointment about the 'lack of progress' being made at the newly-enlarged Nordic IT group, dealers said.

The group posted third-quarter profits below expectations at both the pretax and operating levels, after seeing a slower-than-expected rate of sales growth and on higher operating expenses and financial costs.

Ementor reported operating profits of 50.5  million NKr, well up on the previous year's 218.3  million loss, but below the 57  million consensus forecast of analysts polled by TDN Finans. Pretax profits came in at 37.7  million NKr, up from the previous year's 225.6  million loss, but well below the 46  million consensus forecast.

Looking ahead, Ementor said it will continue to look at local acquisitions as an 'integral part' of its growth strategy for the Nordic region, the firm having already completed eight acquisitions in the year-to-date.

Telenor rose 0.75 to 114.75. Its Malaysian unit, DiGi, posted third-quarter EBITDA of 870  million NKr, up from 721  million the year before. EBIT came in at 609  million NKr, up from 424 NKr last year, while sales came in at 1.849  billion NKr, up from a previous figure of 1.584  billion.

While the Norwegian firm currently holds 61% of DiGi, the Malaysian government is understood to want it to reduce this stake to 49%.

Storebrand was up 0.1 at 81.9. Fellow insurer Gjensidige increased its stake in the group, refocusing investor attention once again on the future possibility that a full bid for Storebrand might emerge.

Gjensidige said it has bought 80,300 shares in Storebrand, increasing its holding in the fellow insurance group to 10.02% from the previous level of 9.99%.

Storebrand has been the subject of speculation that its stakeholders would eventually move to make a full takeover bid for the group. Apart from Gjensidige, Kaupthing has its full 20% share quota, while another Icelandic company, Exista, has 5.6%.

DnB NOR shed 0.9 to 85.8.

Aker Kvaerner shed 8 to 168.25 after UBS cut its rating on the stock to 'neutral' from 'buy' on valuation grounds, but increased its price target to 200 NKr from 190.

The broker said that after lagging the sector earlier this year, Aker Kvaerner has risen 30% in Dollar terms in the last month against just 15% for the sector, and believes the stock is now close to its fair value.

HSBC reiterated its 'overweight' stance on the stock and raised its target to 220 NKr from 200.

Aker Yards was unchanged at 72, while Orkla added 0.6 to 93.4 and Norsk Hydro rose 2.5 to 81.9.

And rounding out the Nordic arena this week we go to Finland where Helsinki shares closed flat, handing back gains in late trade amid falls on Wall Street and rising oil prices, though Cargotec rallied for a second straight session.

The OMX Helsinki 25 index finished down 0.06% at 3,258.60 and the OMX Helsinki down 0.20% at 12,115.39. Volume was 1.72  billion Eur.

Cargotec rose 7.74% to 41.48 Eur -- and that was after a 7% rise yesterday. Analysts said Thursday's strong third-quarter results and news of a fattening order book means investors are now more confident about the company's future growth going forward following the disappointment of its April-June report.

ABN Amro upgraded its view on the stock to 'buy' from 'hold', saying that in its view, the main positive surprise in Cargotec's third-quarter report was order intake at MacGregor, its marine cargo handling unit.

Nokia lost 0.80% to 26.04 Eur. The handset maker had unveiled consensus-beating third-quarter numbers yesterday, but investors are cautious as the shares have already risen 68% this year.

There were also falls for forestry stocks, with worries about oil prices and weakness in the Dollar dampening demand. Stora Enso fell 2.57% to 11.74 Eur and UPM-Kymmene 1.02% to 14.55 Eur.

Among other heavyweight stocks, Fortum rose 1.96% to 29.10 Eur, while Metso climbed 0.52% to 47.95 Eur and Nokian Tyres added 0.26% to 26.63 Eur.

Nokian Tyres said today it will take an initial 10% stake in a newly formed venture that plans to produce up to 4  million car tyres a year at a plant in Kazakhstan, with the option to gain a majority holding later.

Heading South in Europe now to warmer climes and starting this week in Greece where Athens' shares closed slightly higher and outperformed peer European bourses, boosted by blue chips OPAP and Public Power Corp (PPC).

The ASE general index closed 0.4% higher at 5,190.1 and the blue chip index grew 0.3% to 2,744.8. Mid caps closed little changed at 6,718.3 and small caps grew 0.6% to 1,140.6.

Advancers outnumbered decliners 137 to 106 while 82 were unchanged in average trading volume of roughly 434  million Eur.

Lottery operator OPAP led blue chip gainers and rose 4.3% to 28.42 Eur. Sources told Thomson Financial News that Christos Chatziemanouil will be appointed as its new CEO on Tuesday. OPAP issued a statement confirming that there will be a Board of Directors reshuffling and allocation of offices on Tuesday.

Electricity utility Public Power Corp jumped 2.5% to 28.48 Eur, gaining on its recent favorable news flow.

Hellenic Telecomms (OTE) rose 1.8% to 26 Eur. At a press conference in Romania, its management said units RomTelecom, Cosmote Romania and Germanos were in line to meet their 9 month results targets. Mobile operator Cosmote was% higher at Eur on the same news.

Metals holding company Viohalco lost 1.3% to 11.48 Eur on profit taking, unaffected by its initiation at National Sec P&K Sec at 'equalweight' with a 11.5 Eur per share target price.

EFG Eurobank dropped 1% to 25.52 Eur. It announced that its board of directors will propose a 0.32 Eur per share interim dividend at its EGM scheduled to be held Nov 9, 2007.

EFG Eurobank real estate unit Eurobank Properties rose 1% to 13.8 Eur after it said its nine month consolidated net profit rose 38% year on year to 29.3  million Eur, up from 21.2  million Eur from the same period in 2006.

Refiner Motor Oil slid 0.7% to 17.9 Eur after its rating was cut to neutral from buy at UBS and its target price was lowered 9% to 19.5 Eur with the broker citing its worse than expected performance and increased risks in the refining sector.

Refiner Hellenic Petroleum lost 2.3% to 10.9 Eur, after UBS lowered its forecasts for the European refining sector, citing higher oil prices, warmer weather, and the risk of economic downturn.

S&B Miner slid 0.5% to 14.04 Eur after it said it has been fined 392,000 Eur for violating environmental regulations on Mylos island, adding that it plans to appeal the decision.

Across to neighbours Italy now where Milan markets closed lower, giving up earlier gains as Wall Street shares headed lower, led by Fastweb after JP Morgan cut its rating on the stock and sharply reduced its target price.

The Mibtel index was down 0.15% to 31,158 points and the S&P/Mib fell 0.04% to 39,888.

Volume traded was an estimated 5.474  billion Eur.

On the macroeconomic front, brokers said data today had little impact, while there are some expectations for the G7 meeting.

Fastweb lost 3.25% to 39.92 Eur after JP Morgan cut its rating to 'underweight' from 'neutral', lowering its price target to 30 Eur, from 41.

Fastweb is due to go ex-dividend this evening ahead of a 3.77 Eur payment. One broker said he had expected this to be a positive factor for the stock.

This broker from a major Milan firm said that without the dividend Fastweb his firm has a fair value of 42 Eur.

Telecom Italia lost 0.38% to 2.095 ahead of a likely Brazilian regulatory decision next week clearing Pirelli to sell its 18% stake in the telecom company to Telefonica and Italian banks.

Pirelli was up 1.90% to 0.8675.

In a note, Dresdner Kleinwort said it rated Telecom Italia an 'add' with a 2.5 Eur target, citing the stock as a laggard in the sector with a range of high-tech products ready to launch.

Tiscali gained 0.89% to 2.3275.

Prysmian fell 3.17% to 19.35. Brokers pointed to the upcoming expiry of the lock-up on Goldman Sachs's majority stake, adding they don't expect any news before the stock rises further.

In any case, Goldman is seen selling to long-term investors rather than putting Prysmian shares on the market.

Among other industrials, Fiat rose 1.11% to 22.85 ahead of third-quarter results next Wednesday, which are seen higher by analysts. A higher full-year forecast is already priced in, they said.

Oils were mostly lower after the oil price came off its highs. Saipem was down 2.33% to 29.70 and Eni was down 0.38% to 25.94.

Atlantia rose 2.21% to 26.32.

In the banking sector, Banco Popolare was up 1.39% to 16.36 after underperforming in recent weeks. Yesterday, consumer credit officials said the bank can reorganise its activities in this sector.

Unicredit lost 0.36% to 5.78. Brokers dismissed market rumours on a placement of stock. Intesa Sanpaolo added 0.90% to 5.39.

Indesit lost 2.81% to 12.43 ahead of next week's results. Analysts said they have worries about possible consumer spending slowdown.

And rounding out the European review this week we go to Madrid where Spain's main bourse closed at record highs for the second session running and continuing to buck the negative global trend, with Repsol YPF leading gains, while Iberia moved lower.

The IBEX-35 index closed up 22.60 points at 15,529.70, after trading in a range of 15,472-15,627.

Equities opened slightly lower after Wall Street's lacklustre overnight performance, but pushed higher over the morning as M&A hopes continued to dominate sentiment.

The IBEX-35 remained in positive territory through the afternoon, though lost some of its momentum by the close after a weak start in US markets as high oil prices and weak earnings sparked concerns surrounding the health of the economy.

Repsol YPF added 0.83 Eur or 3.14% to 27.27, extending yesterday's gains fuelled by speculation over the possible sale of its stake in Gas Natural, down 0.71 at 41.35.

Earlier, El Economista said Suez could be interested in acquiring the stake.

Other utilities continued to benefit from sector consolidation hopes, with Iberdrola adding 0.04 to 11.07, further lifted by reports that ACS has built its stake to over 13%, and Fenosa was 0.76 higher at 45.00.

Iberia shed 0.04 to 3.40 after Lufthansa said it is not interested in the airline at more than 3 Eur per share.

Vueling dropped 0.75 or 4.48% to 15.98, extending yesterday's declines.

Heavyweights were mostly flat, with Telefonica up 0.02 at 22.54, BBVA up 0.01 at 17.19, while Santander slipped 0.01 to 14.21.

Also under pressure, Sogecable lost 0.39 to 27.46 on concerns that its football broadcasting war with Mediapro is far from over ahead of key league matches this weekend.

Parent group Prisa lost 0.18 to 13.81, ahead of third-quarter results due Monday morning.

BME advanced 1.54 or 3.41% to 46.74 after Morgan Stanley lifted its target price to 55 Eur per share from 50 and reiterated its 'overweight' stance.

Elsewhere, gaming group Codere was up 1.00 or 4.76% at 22.00, after making its stock market debut today.

Its final IPO price was 21.0 Eur.

UK Market - Kingfisher slumped to a five-year low on Friday at the end of a week peppered with reports that the UK housing market was set for a sharp correction.

The International Monetary Fund warned that the UK housing market was even more over valued than the US one before its recent decline. As the owner of the B&Q DIY chain, Kingfisher is heavily exposed to a property market slump.

Kingfisher closed down 3.4% at 170.7p, its lowest level since July 2002.

In the wider market, the FTSE lost ground as Wall Street was spooked by the continued rise in the oil price, which passed $90 a barrel for the first time.

The main index ended 81.5 points, or 1.32%, lower at 6,527.9 while the FTSE 250 lost 112.3 points, or 1%, to 11,299.3.

Over the week, the blue-chip index, which seven days ago closed a whisker away from a seven-year high, lost 3%, while the mid-caps dropped 2.4%.

Banking stocks were the main drag as Thursday’s news of a sharp drop in profits at Bank of America continued to weigh on sentiment. HBOS fell 2.9% to 835p, Alliance & Leicester dropped 2.8% to 735p and Northern Rock slumped 8.7% to 186¾p.

Royal Bank of Scotland, which is leading the consortium buying ABN Amro, lost 2.5% to 510½p as Dresdner Kleinwort resumed coverage on the bank with a “hold” rating. Dresdner noted that bank shares tended to stagnate after big deals and said it “doesn’t seem to be the appropriate time to be upping wholesale exposure” to the sector.

AstraZeneca lost 3.6% to £24.61 on news that the European Patent Office had revoked its patent for the group’s Symbicort asthma inhaler, which accounted for nearly 4% of group sales in 2006. “What this decision does do is to create further investor uncertainty surrounding AstraZeneca’s medium-to-long term growth, given its significant patent exposure and lack of pipeline re-rating newsflow over the next two years,” Cazenove wrote.

WPP fell 4.2% to 665p as quarterly figures from the advertising group fell short of expectations.

The under-pressure housebuilders staged something of a recovery amid vague talk of further sector consolidation and a bid for Redrow, up 3% to 383p.

Barratt Developments and Persimmonrose 1.3% to 667p and 1.2% to 971p respectively.

Life assurance group Resolution, which is seeking a merger with Friends Provident, rose 2.1% to 722p as it rejected an increased 700p-a-share offer from Pearl.

McAlpine rose 3.5% to 555p as news that several leading shareholders in the construction group had supported a takeover by Carillion made a deal more likely. McAlpine says the 570p-a-share proposal undervalues its business, while it remains possible that a third-party, such as 3i, Balfour Beatty, or a European construction company, could yet become involved.

Japan & Asia Pacific - Asian stocks closed lower Friday after the cost of crude struck another record high and broke through the $90 a barrel barrier, a falling US Dollar and fears for the global economic outlook.

Seoul was off 1.8%, Singapore slumped 1.62%, Sydney was down 0.9%, Jakarta tumbled 2.0% and Mumbai slid 2.44%.

Safe-haven government bonds benefitted from the fall in stocks, driving yields sharply lower. The benchmark 10-year Japanese government bond yield fell 3.5 basis points to a one-month low of 1.60%.

Among major regional markets, Chinese stocks steadied from Thursday’s fall after Beijing denied that it was studying a plan to allow swaps of shares of companies listed both in the mainland and in Hong Kong, where they have lagged.

Hong Kong financial markets were closed for a public holiday. India stocks, however, remained weak as investors fretted about proposed plans to curb some foreign fund inflows announced this week.

Starting in Japan now where The Nikkei average fell 1.7% to end at its lowest in three weeks on Friday as exporters such as TDK Corp were hit by a stronger Yen while bank shares dropped on worries over fallout from the global credit squeeze.

Shares in drug maker Kyowa Hakko Kogyo Co surged 16.6% to 1,402 Yen as a source close to the matter said beer maker Kirin Holdings Co is in talks to take a majority stake in it in a deal that could top 300 billion Yen ($2.61 billion).

The Nikkei lost 291.72 points or 1.7% to close at 16,814.37, the lowest close since Sept. 28. The broader TOPIX index declined 1.6% to 1,591.28.

The strong Yen dragged down technology exporters including electronics parts maker TDK down 2.4% at 9,660 Yen and digital camera maker Canon Inc  falling 2.8% to 5,930 Yen. Shares of auto companies, which generate chuncks of their sales outside Japan, also declined with Honda Motor Co down 1.3% at 3,830 Yen.

Bank shares, which had a brief respite on Thursday from several consecutive sessions of selling, once again headed south, with market participants attributing this to a combination of disappointing earnings from Bank of America and general selling sentiment. Nation's second largest banking group Mizuho Financial slid by 2.2% to 616,000 Yen, while No.1 Mitsubishi UFJ Financial Group was down 1.3% to 1,027 Yen.

Consumer lender Acom Co Ltd bucked the overall bearish trend and jumped 17.9% to 2,640 Yen after saying it likely beat its first-half operating profit forecast by 63% as fewer customers than expected switched to lending plans with lower rates. The news helped other lenders to advance.

Hong Kong as I mentioned was closed for a National Holiday but in South Korea the Kospi closed sharply lower Friday, wiping out Thursday's gains as investors were gripped by fears that oil prices may rise further and derail global economic growth.

Trading was volatile throughout the session, with a rally among technology stocks at midday quickly offset by massive program-led selling pressure.

The KOSPI index closed down 34.99 points or 1.8% at 1,970.10, its worst level for the day. The day's high was 2,003.27.

Trading was subdued ahead of the weekend, with 383 million shares worth 7.3 trillion Won exchanging hands. Decliners outpaced advancers by 515 to 279.

Institutions and foreign investors were net sellers of shares worth 276.9 billion Won and 157.5 billion Won each while retail investors were net buyers of 331.9 billion Won.

Samsung surged 18,000 Won or 3.5% to 540,000 Won on hopes its handset business would benefit from the recent adoption of Korea's wireless broadband Internet technology as the world's 3G mobile standard.

LG Electronics tumbled 6,900 Won or 7.4% to 86,000 Won on fears that its US sales will be hurt if US consumers spend less in the face of credit problems and oil price hikes. The company's parent LG also slumped 7,300 Won or 8.6% to 77,700 Won.

Doosan Heavy soared 5,500 Won or 4.6% to 124,500 Won after signing a contract worth 250 billion Won with POSCO E&C to supply heating equipment.

Samsung Electro-Mechanics fell 100 Won or 0.2% to 58,500 after rising to 62,100 Won upon the announcement of an upbeat quarterly result. The nation's key electronics parts and components maker posted operating profit of 56.6 billion Won against 28.6 billion a year earlier and 28.8 billion a quarter ago.

Shipping stocks gave up much of their recent gains on concerns over rising fuel costs, along with airlines and other energy-dependent stocks. STX Pan Ocean skidded 180 Won or 4.6% to 3,750, Hyundai Merchant Marine slid 3,500 Won or 6.9% to 47,100 Won, and Hanjin Shipping tumbled 3,100 Won or 5.3% to 55,000 Won.

Into Mainland China now where China A-shares closed slightly lower led by steelmakers in volatile trade as investors continued to worry over high valuations in the market and further monetary tightening moves, dealers said.

The market was relieved after China denied a report that it is considering a scheme that would permit effective arbitrage in stocks with mainland and Hong Kong listings, but overall market sentiment remained fragile after 3.5% fall yesterday.

The benchmark Shanghai Composite Index closed down 7.24 points or 0.12% at 5,818.05, down 1.44% for the week.

Turnover fell to 103.27  billion RMB from 130.35  billion RMB in the previous session.

The Shanghai A-share Index fell 8.26 points or 0.14% to 6,106.69 and the Shenzhen A-share Index was down 0.94 points or 0.06% at 1,568.31.

The FTSE/Xinhua China A 50 Index was down 9.92 points at 22,208.63 and the FTSE/Xinhua China A 200 Index was down 2.55 points at 16,194.17.

China B-shares closed higher as upbeat quarterly results announced by a large property developer sparked interest in the sector.

Poly Real Estate Group Co Ltd, a Guangdong-based property developer, said third quarter net profit surged 240% year-on-year to 284.45  million RMB.

The Shanghai B-share Index rose 5.48 points or 1.45% to 384.12 and the Shenzhen B-share Index added 15.10 points or 1.96% to 787.00.

In Shanghai, Inner Mongolia Yitai Coal Co Ltd rose 0.667 usd to 9.799, following a 7.7% drop in the previous session.

Shanghai Jinqiao Export Processing Zone Development Co Ltd added 0.039 usd to 1.809.

In Shenzhen, Shenzhen International Enterprise Co Ltd advanced 0.34 hkd to 6.29.

China Merchants Property Development Co Ltd gained 1.51 hkd to 41.00, and China Vanke Co Ltd rose 0.86 hkd to 21.86.

The FTSE/Xinhua China B 35 Index was up 220.04 points at 12,998.25.

Into Taiwan now where Taipei shares closed weaker as concerns over oil prices, which are hovering at record highs near the 90 usd a barrel level, outweighed gains in select technology stocks on the back of strong earnings reports from global majors such as Nokia and Google.

Although AU Optronics and other LCD panel makers were up on solid earnings prospects, they failed to inspire interest in the broader market, dealers said.

The weighted index closed down 25.35 points or 0.26% at 9,611.72, off a high of 9,673.96 and low of 9,609.58.

Turnover was at 139.00  billion TWD. For the week, the index is up 115.25 points or 1.21%.

AU Optronics will announce its third quarter results on Monday.

Decliners led risers 1,263 to 680, with 270 stocks unchanged.

Two stocks closed limit-down and 12 limit-up.

The heavily weighted financial and electronics sectors were down 0.56% and 0.36%, respectively.

The food sector was down 1.68%, cement sector down 1.20%, construction sector down 0.27% and plastics/petrochemical sector down 0.20%.

The textile sector was up 0.64% and paper up 0.04%.

The Taiwan Dollar closed the morning at 32.551 to the US Dollar, compared with the previous close of 32.595.

Most LCD makers gained ground, with AU Optronics up 1.40 TWD or 2.06% at 69.40; Innolux up 4.50 TWD or 3.16% at 147.00 and Chunghwa Picture up 0.23 TWD or 2.32% at 10.15.

Analysts expect AU Optronics to report a big jump in third-quarter earnings on the back of increased shipments of thin-film-transistor liquid crystal display (TFT-LCD) panels and improved pricing.

Chi Mei Optoelectronics was down 0.25 at 43.20.

TSMC was down 0.90 TWD at 62.00 and UMC was down 0.20 TWD at 21.20.

ASE Inc was up 0.40 TWD at 37.60, off a high of 38.70, as profit-taking kept a lid on an early upswing following over 9% gain in its American depositary receipts overnight. A spokesman said the ASE group expects flat 2007 results but anticipates revenue growth next year.

Nanya Technology was down 0.20 TWD at 22.10 and Inotera was unchanged at 32.85 TWD ahead of their third-quarter results on Monday.

Yang Ming Marine was down 0.30 TWD at 27.90. The company said it is targeting consolidated sales of 200  billion TWD in 2012, nearly double from the 107.30  billion achieved in 2006, on the back of capacity expansion.

Singapore shares closed sharply lower Friday in line with declines across the region on fears that surging oil prices would eventually hurt economic growth.

The Straits Times Index closed down 61.71 points or 1.6% at 3,747.98, after trading between 3,714.88 and 3,790.55. For the week the index lost 109.27 points or 2.8%.

Losers beat gainers 600 to 218, with 869 shares unchanged. There were 2.1 billion shares traded worth 2.3 billion Singapore Dollars.

Banking stocks were a key drag on the benchmark index amid uncertainty over their marked-to-market losses on collateralized debt obligations (CDOs), which may be reflected in their third-quarter results. United Overseas Bank will make the announcement Thursday while DBS Group will report its financial results on Friday.

UOB fell 50 cents to 22.10 Singapore Dollars, DBS Group slipped 50 cents to 21.40 Dollars, and Overseas Chinese Banking Corp dropped 20 cents to 9.00 Dollars.

Among oil-price sensitive transportation stocks, Neptune Orient Lines was down 30 cents at 5.10 Dollars and Singapore Airlines was down 30 cents at 19.50 Dollars.

Other blue chip losers included Singapore Exchange, down 80 cents at 14.90 Dollars, ST Engineering down 8 cents at 3.70 Dollars, and Singapore Telecommunications, down 4 cents to 3.98 Dollars.

Property heavyweights also declined, with City Developments down 30 cents at 5.70 Dollars, Keppel Land down 10 cents at 8.35 Dollars and CapitaLand down 10 cents at 7.75 Dollars.

But surging oil prices lent support to select oil and gas related plays led by Singapore Petroleum, which closed up 35 cents at 8.85 Dollars, off an all-time high of 9.05 Dollars.

Shipyard and shipping company COSCO Corp Singapore added 20 cents to 7.70 Dollars, Swiber Holdings, which provides engineering services to the oil and gas industry, gained 6 cents to 3.62 Dollars, and KS Energy, service provider to the oil and gas industry, rose 4 cents to 3.94 Dollars.

Malaysian stocks also followed suit and closed broadly lower. For the week, the KLCI lost 5.08 points or 0.4%.

The FTSE Bursa Malaysia 30-large cap index was down 24.03 points or 0.3% at 8,659.48 and the second board index edged down 0.94 point or 0.9% to 108.18.

Losers led gainers 600 to 269, with 239 counters unchanged. Trading volume was 1.372 billion shares, valued at 1.417 billion Ringgit.

Stock exchange operator Bursa Malaysia lost 60 Sen or 4.2% to 13.80 ringgit and Bumiputra-Commerce, Malaysia's second largest banking group by assets, was steady at 11.00 Ringgit.

Among index heavyweights, Maybank, the largest lender in Malaysia by assets, was up 10 Sen or 0.9% at 11.50 Ringgit, while national power company Tenaga gained 5 Sen or 0.5% to 9.35 Ringgit and Telekom Malaysian was flat at 9.35 Ringgit.

The country's third-largest mobile phone company DiGi.com fell 20 Sen or 0.9% to 23.00 Ringgit. After the close, DiGi announced its third-quarter net profit jumped 51% from a year earlier to 273.28 million Ringgit supported by strong topline growth.

Indonesian shares closed sharply lower for the second straight session Friday as investors continued to lock in profits following recent record-setting rallies.

The composite index closed down 52.99 points or 2.0% to 2,563.75. The main index has now lost 103.52 points or 3.9% from its all-time intraday record of 2,667.27 set yesterday.

For the week, the index lost 74.46 points or 2.8%. Volume was 3.62 billion shares worth 4.5 trillion Rupiah.

The LQ45 index was down 12.91 points at 555.07. Decliners led advancers 163 to 41, while 36 stocks were unchanged.

Among the key losers, index heavyweight Telkom lost 350 Rupiah or 2.9% to 11,800, Bank Mandiri fell 175 Rupiah or 4.6% to 3,625 Rupiah, Bank Central Asia fell 200 Rupiah or 2.8% to 6,900 Rupiah and Bank Rakyat Indonesia dropped 200 Rupiah or 2.8% to 7,000.

Some mining stocks managed to sustain their gains but closed off their highs. Coal giant Bumi Resources increased 25 Rupiah or 0.5% to 4,675 Rupiah, off an intraday high of 4,750, and nickel miner Antam gained 50 Rupiah or 1.6% to 3,250 Rupiah, off a high of 3,350.

Gas distributor Perusahaan Gas Negara ended flat at 13,550 Rupiah, off a high of 13,900 Rupiah, on news that the company has started the operation of a new gas pipeline that will enable transport of natural gas from the ConocoPhillips field in Grissik, South Sumatra. The operation of this section of the pipeline will increase PGN's gas transmission volume to its customers in the western part of its main market, Java.

Philippine shares closed higher Friday as investors shrugged off worries over soaring oil prices, with index heavyweight Philippine Long Distance Telephone Co (PLDT) rebounding after a seven-day losing streak while media group ABS-CBN Broadcasting outperformed after upgrading its full-year earnings guidance.

Select mining stocks also advanced on higher gold prices as investors sought safe havens, such as commodities, amid inflationary concerns due to a weakening Dollar and surging oil prices.

PLDT, the country's biggest company by market value, is scheduled to release its third-quarter results next month.

Manila's composite index finished up 48.63 points or 1.3% at 3,819.75, off the day's high of 3,836.18. The main index lost 0.1% from last week.

The broader all-share index gained 16.60 points or 0.7% at 2,388.18.

Gainers barely beat losers 57 to 53, while 59 stocks were unchanged. A total of 2.9 billion shares worth 5.4 billion Pesos changed hands.

PLDT set the pace among the gainers, adding 85 Pesos or 2.8% to 3,110 Pesos.

PLDT said earlier this month that its mobile phone units, Smart Communications and Pilipino Telephone Corp, had about 28.3 million subscribers at the end of September, up more than 1 million from 27.1 million at the end of June.

ABS-CBN edged up 2.50 Pesos or 8.2% to 33 Pesos.

The company reported Thursday that its net profit in the first nine months doubled from a year earlier to 1.1 billion Pesos, surpassing its full-year target of 1 billion Pesos. The results reflected gains in advertisements and its subscription-based business.

ABS-CBN is now projecting net profit to rise to as much as 1.4 billion Pesos for the whole year, or almost double what it earned in 2006.

Megaworld Corp, the country's second biggest homebuilder, added 25 centavos or 5.8% to 4.50 Pesos.

Megaworld disclosed last week that it expects its net income to jump from 2 billion Pesos in 2006 to 2.9 billion Pesos this year, aided by robust real estate sales and higher rental income.

Ayala Land Inc rose 25 Pesos or 1.5% to 17 Pesos.

Philex Mining, the country's biggest miner, advanced 10 centavos or 1.1% to 9.50 Pesos.

Food and beverage conglomerate San Miguel Corp's A shares were steady at 60 Pesos, while its B shares were unchanged at 61.50 Pesos.

Into Mumbai now where Indian shares traded weaker for a second day on continued jitters that efforts by the authorities to moderate capital inflows into the country may cool demand in the equities market. However, buying at lows by domestic funds prevented a steeper fall.

The Bombay Stock Exchange's benchmark Sensex fell 2.44%, or 438.41 points, to 17,559.98. It had also hit a low of 17,226.18 points in afternoon trade. The National Stock Exchange's S&P CNX Nifty fell 2.54%, to 5,215.30.

Among BSE 30 stocks, 7 shares advanced and 23 declined. In the broader market, 550 shares gained, 2,184 lost and 33 were unchanged. At close today, the benchmark Sensex has lost 8.53% since hitting a record 19,998.66 points in morning trade yesterday.

Market regulator Securities and Exchange Board of India had late Tuesday proposed restricting an indirect route for foreigners to buy Indian stocks.

The proposals regarding participatory notes led to a massive selloff on Wednesday, as panic selling triggered a 9% fall in benchmark indices within minutes of the opening bell, leading to the suspension of trade for an hour.

Finance minister Palaniappan Chidambaram soothed sentiment with comments that Sebi's proposals would only moderate capital inflows and were not a blanket ban on the p-note route. He added that the government and Sebi were of the view that if foreign investors wanted to invest in the Indian market, they should get themselves registered with Sebi.

The statment spurred a brisk recovery after the bourses reopened, but renewed concerns over the proposal have kept the market depressed over the next two trading days.

Power utility Reliance Energy Ltd, which has been one of the better performing blue-chip stocks this year, was the heaviest loser, closing 16.22% lower at 2,469.20 rupees.

Reliance Industries Ltd closed 4.14% to 2,469.20 even after reporting second-quarter earnings that beat market estimates, as broader weakness weighed on the heaviest stock in the Sensex.

Telecom services provider Bharti Airtel Ltd fell 5% to 968.45 rupees and Bharat Heavy Electricals Ltd slipped 5.99% to 2,051.60 rupees.

However, Bajaj Auto Ltd rose 2.07% to 2,511.65 rupees after the company said its net profit for the quarter ended Sept 30 rose to to 3.36  billion rupees from 3.19  billion last year, aided by higher sales of its newly launched 125-cc motorbikes, even though the motorcycle market in India has been witnessing a slowdown on the back of higher interest rates and fierce competition.

Reliance Communications Ltd rose 2.21% to 727.15 rupees after the telecom services company said it has obtained approvals from the government to offer GSM services on a nation-wide basis. The company currently operates GSM services in only eight circles.

New Zealand share prices closed flat on Friday, shrugging off negative sentiment a day before the 20th anniversary of the share market crash following a plunge on Wall Street.

The market was talking about the 1987 crash, which wiped six billion Dollars or nearly 15% off the main index, but focused more on current concerns, said Stephen Wright of ASB Securities.

The benchmark NZX-50 ended just 3.16 points or 0.07% higher at 4,316.31 on turnover worth 89.16 million New Zealand Dollars.

The only stock caught in crash mode was technology company VTL, which plunged 91% or 63 cents to a record low 6.5 cents after forecasting a significant annual loss and a planned asset sale to get out of financial trouble.

Among stocks that were listed in 1987, Air New Zealand rose 1 cent to 2.12 Dollars, Steel and Tube fell 1 cent to 4.38 and Michael Hill lost 20 cents to 10.30.

BIL International, formerly Brierleys, was up 1 cent at 1.20 while Fletcher Building, part of the former Fletcher Challenge empire, rose 4 cents to 12.38 Dollars.

The Fisher & Paykel stocks, 20 years ago a single unit, were mixed with F&P Appliances flat at 3.70 and F&P Healthcare down 4 cents to 3.34.

Top stock Telecom NZ rose 2 cents to 4.54 Dollars and third-ranked Contact Energy was 1 cent higher at 9.43.

Australian shares closed lower Friday on a broad sell-off as investors locked in gains after a solid rise on Thursday.

The S&P/ASX 200 closed down 61.4 points or 0.9% at 6,706.3 after trading between 6,684.6 and 6,764.9. Yesterday the benchmark index added 87.6 points or 1.3% but for the week it fell 42.6 points or 0.6%.

The All Ordinaries index closed down 57.7 points or 0.9% at 6,723.3.

Volume traded was 1.78 billion shares worth about 5.2 billion Australian Dollars.

Decliners outstripped gainers 663 to 614, with 359 stocks unchanged.

The S&P/ASX 200 December futures contract fell 77 points to 6,740, trimming its premium to the physical market.

The yield on the 10-year bond eased 0.0625 of a%age point to 6.1305%, while the yield on 90-day bills fell 0.063 of a%age point to 6.820%.

Index leader BHP Billiton retreated from Thursday's record high to close down 60 cents or 1.3% at 47.10 Dollars while Rio Tinto fell 3.23 Dollars or 2.9% to 109.60 Dollars.

Mineral sands miner Iluka Resources fell 28 cents or 5.5% to 4.85 Dollars after lowering its 2007 earnings guidance because of a strong Australian Dollar.

Gold stocks outperformed the rest of the mining sector after the gold price strengthened further as the oil prices rose.

Leading gold stock Newcrest added 1.39 Dollars or 4.9% to 29.93 Dollars, Lihir Gold was up 4.0 cents at 4.25 Dollars and Kingsgate jumped 15 cents or 2.8% to 5.53 Dollars. Sino Gold, which mines gold in China, jumped 44 cents or 5.7% to 8.11 Dollars.

Oil stocks were mixed despite crude oil being at record levels. Sector leader, Woodside fell 56 cents or 1.0% to 54.94 Dollars after revealing on Thursday that a strong Australian Dollar was hurting earnings. Oil Search was down 6.0 cents or 1.3% at 4.50 Dollars but Santos rose 32 cents or 2.0% to 15.90 Dollars.

Banks sank with National Australia Bank ending down 39 cents to 40.90 Dollars, Commonwealth Bank fell 95 cents to 59.14, ANZ lost 7.0 cents to 30.93 Dollars and Westpac dropped 30 cents to 28.70 Dollars.

Leading investment bank Macquarie Bank dropped 1.88 Dollars or 2.2% to 83.02 Dollars and investment firm Babcock & Brown fell 58 cents or 2.1% to 27.77 Dollars.

Grain marketer and rural services group AWB jumped 46 cents or 20% to 2.76 Dollars after upgrading its earnings guidance for the year to September 2007.

Commodities - Petroleum and palm oil futures hit record highs on Friday, while gold rallied to its strongest in nearly three decades, boosted by a flagging Dollar and worries about energy supply.

US light crude for November rose 11 cents to $89.58 a barrel by 0520 GMT, following a gain of more than $2 on Thursday.

Overnight, oil touched $90.02, the sixth record high in as many trading sessions.

The latest bout of infatuation with commodities was reenforced by the plunge in the Dollar against the Euro to an all-time low, making prices less expensive for holders of other currencies.

The rally in oil from below $70 in mid-August and gains for other commodities has been aided by central banks pumping money into financial markets to keep them operating smoothly through the credit squeeze, with investors keen to put those funds to use.

Some of that money also found its way into gold , which hit a high of $769.80 an ounce, its strongest in 28 years, before drifting back to $768.40.

Gold hit a record high of $850 in January 1980. But after adjusting for inflation, that level was equal to $2,079 an ounce at 2006 prices, according to metals consultancy GFMS Ltd.

Rising tension between Turkey and Kurdish rebels in northern Iraq has also supported gains in oil and gold.

Oil traders fear an incursion by Turkey may stem the flow of Iraq's sporadic northern oil exports or eventually disrupt broader Middle East shipments, while investors tend to flock to gold during times of political and economic uncertainty.

Palm oil futures also surged to a record high. Palm oil, extracted from palm fruit, is linked to petroleum prices because the vegetable oil can be used as biofuel as well as an edible oil.

The benchmark January contract rose as much as 60 ringgit, or 2.2%, to 2,795 ringgit ($832).

Soybean futures at the Chicago Board of Trade rose to a near three-week high on Thursday on a weaker Dollar and spillover buying from crude oil and soybean oil.

Copper futures were left behind in the surge in other commodities markets.

Copper for delivery in three months on the London Metal Exchange was flat at $7,860 a tonne, while in New York, copper for December delivery settled down 5.45 cents at $3.5415 per lb ($7,808 a tonne) on COMEX on Thursday, its lowest close in a month.

Copper is very confusing. The Dollar hit a record low, oil hit a new high and gold firmed. Copper should have bounced back above $8,000. What was even more surprising was that most of the other metals were higher.

Currencies - The Dollar took a pounding on the currency markets this week, tumbling to a record low against the Euro as the prospect of further cuts in US interest rates weighed on the currency.

It fell to an all-time low of $1.4319 against the Euro on Friday, before pulling back to stand at $1.4260, still down 0.6% on the week.

The Dollar index, which measures its value against a basket of six leading currencies, hit a low of 77.406, its weakest level since the Federal Reserve launched the data series in 1973.

Analysts said weak US economic data, including figures that showed US housing starts have plunged to their lowest level since 1993, and poor earnings figures from the US banking sector were behind the Dollar’s malaise.

The Dollar fell 0.6% to $2.0480 against the pound over the week. Against the Swiss franc it fell 1.1% to SFr1.1720. It lost 2% to Y115.15 against the Yen.

Japan’s currency also advanced as equity markets came under pressure. Analysts said the resulting rise in risk aversion was accompanied by investors trimming back carry trades.

In the carry trade low-yielding currencies such as the Yen are sold to finance the purchase of riskier but higher-yielding assets elsewhere.

The Yen rose 1.4% to Y164.30 against the Euro on the week, gained 1.4% to Y235.90 against the pound and climbed more strongly against the high-yielding Australian and New Zealand Dollars – 3% to Y103.00 and 4.9% to Y86.60 respectively.

Worries that the G7 might take a more forthright stand over the weakness of the Yen also gave the Japanese currency a boost, though most analysts thought such fears unfounded.

Sterling hit a two-month high versus the Dollar and rallied versus the Euro on Friday after stronger-than-expected British growth figures dimmed expectations of an imminent interest rate cut from the Bank of England.

The Pound was up 0.2% versus the Dollar at $2.0486, having touched its highest level since late July. The Euro was down 0.4% at 69.63 pence.

The Swiss franc depreciated against the US Dollar today as the greenback tested offers around the CHF 1.1735 level and was supported around the CHF 1.1655 level.  Dollar offers are cited around the CHF 1.1750 level.  The Euro came off versus the Swiss franc as the single currency tested bids around the CHF 1.6685 level while the British pound gained ground against the Swiss franc and tested offers around the CHF 2.4015 level.

Above-forecast inflation data helped the Canadian Dollar surge to a 31-year high against its US counterpart on Friday.

The Loonie, which was already benefiting from soaring oil prices, rose 0.5% to C$0.9660 against the Dollar on the week.

The Australian Dollar weakened against US Dollar today as the Aussie tested bids around the US$ 0.8890 level and was capped around the US$ 0.8995 level.  Data released in Australia today saw the Q3 import price index fall 0.8% q/q.  Australian Dollar bids are cited around the US$ 0.8840 level. 

The New Zealand Dollar came off against the US Dollar today as the Kiwi tested bids around the US$ 0.7430 level and was capped around the $0.7555 level.  New Zealand Dollar bids are cited around the US$ 0.7420 level.

In South Africa the Rand was steady and range bound in late trade on Friday as the Dollar continued to languish at near all-time lows against the Euro amid concerns about the world’s biggest economy.

By 16:00 the Rand was bid at 6.7738 per Dollar from its overnight close of 6.7550 and around 6.79 when the local market closed on Thursday. It was bid at 9.6810 to the Euro from a previous 9.7174 and at 13.8977 against Sterling from 13.8643 before.

The Singapore Dollar hit a 10-year high of 1.4577 per US Dollar overnight Thursday, but it retreated to 1.4640 on Friday. The Malaysian Ringgit rose as far as 3.3585 per Dollar, a 9-1/2-year high, then fell back to 3.3648.

The South Korean Won rose a quarter of a% to 915 per Dollar but the Indonesian Rupiah held steady between 9,090 and 9,100 per Dollar.

And rounding out currencies closer to home here in China, The Chinese RMB appreciated vis-à-vis the US Dollar as the greenback closed at CNY 7.5080 in the over-the-counter market, down from CNY 7.5111.

China - China’s stock markets are notorious for their sharp swings. These are not helped by the frequent occurrence of erroneous news reports that circulate widely in the market.

On Thursday, newspapers in Hong Kong created a market furor that sent Hong Kong’s benchmark Hang Seng index to breach the 30,000-point ceiling for the first time ever after news reporters misunderstood a simple comment made by Tu Guangshao. The vice chairman of the China Securities Regulatory Commission was responding to a press question about possibility of instituting share swaps between the Hong Kong Stock Exchange, itself a listed company, and its mainland counterparts in Shanghai and Shenzhen.

Tu, according to a clarification placed prominently on the front page of Chinese official newspapers, including the popular Securities Times, was merely commenting on a proposal for a swap of equity between the exchanges of Hong Kong and the mainland themselves. He refused to elaborate on the whole issue of different stock classes listed by Chinese companies for investors in Hong Kong, who receive so-called H-shares, and those in China, who get their locally issued A-shares.

“No share swap issues were raised other than that about Hong Kong Stock Exchange during the whole interview activity,” the announcement said, “News reports about share-swap between A and H shares are not accurate.”

China’s influential magazine Caijin reported on its Web site that the misunderstanding arose from Tu’s remark about the Hong Kong Stock Exchange’s proposal for a share swap with Shanghai and Shenzhen. Caijin quoted an unnamed Chinese securities official as saying no breakthrough is likely on the broader issue of A-share/H-share arbitrage:

“There are many complicated issues involving A-H share price arbitrage, and we have to consider interests of various different parties. There are also many technical questions that cannot be resolved. We’ve been studying this issue as early as two years ago, but there is no new development, nor any policy to be proposed any time soon.”

Caijin did not specify what the technical issues might be, but it quoted a recent report from Merrill Lynch portraying the lack of urgency by Chinese regulators to narrow the price gaps between Chinese-listed shares in Hong Kong and in mainland China and suggesting that a lower price for A-shares as a result of allowing international price arbitrage would hurt domestic investors’ interests.

The Merrill Lynch report also pointed to the discrepancy in the free float--the number of shares available for trading--between Hong Kong’s listed H-shares and mainland China’s A-shares (many of which have two-thirds of their shares locked up in government ownership), with H-shares 4.7 times greater. That would make the cost of share arbitrage prohibitive for those dealing in A-shares.

The markets are contending with at least six proposals for A-share/H-share arbitraging, including company share buybacks, the listing of exchange-traded funds in China, outright share swaps between A-shares and H-shares of a listed company, and the issuance of Chinese depositary receipts and Hong Kong depositary receipts. Beijing has to strike a balance between the various vested interests supporting one proposal or another.

News of a possible opportunity for arbitrage between high-priced A-shares and low-valued H-shares propelled the Hang Seng index to a new record while causing mainland markets to plummet on Thursday.

******************************************************************************

Pressure intensified on China’s currency regime on Friday as the Group of Seven rich nations discussed the threat to the world economy posed by the friction between managed and freely floating currencies.

The G7 was considering toughening its language towards Beijing on Friday night with many G7 countries in favour of making public their concerns that China was not sufficiently willing to allow the renminbi to appreciate against all the world’s leading currencies.

As the G7 met, China’s deputy central bank governor, Wu Xiaoliang, defended China’s currency policy at the Peterson Institute in Washington, but said it would accelerate structural reform to reduce its giant current account surplus, including use of industrial and trade policy.

“Moving the exchange rate in the absence of economic restructuring policies will hurt China’s economy,” she said. “Since China is one of the driving forces of the world economy this will accordingly hurt the world economy.”

However, in a conciliatory gesture to China’s critics, she said the People’s Bank of China had told other ministries that its intervention in currency markets – which is “sterilised” by issuing bonds to contain the accompanying growth in the money supply - was intended “only to buy time for the fundamental economic restructuring of China.”

She said “there is a limit to the sterilisation operations of the central bank” but said China had not yet reached that limit. “There is still room for us to sterilise at the moment.” Ms Wu said there was now a genuine consensus at all levels of China’s administration to push ahead aggressively with structural reform.

China’s currency has fallen against the Euro this year as it has been linked to the weak US Dollar. This has prompted fears that the depreciation in the Dollar will occur solely against European currencies and raises a serious risk of a disorderly unwinding of global trade imbalances. The Dollar fell to a new low against the Euro yesterday as traders thought the G7 would not try to talk up the Dollar.

In April, the G7 said: “In emerging economies with large and growing current account surpluses, especially China, it is desirable that their effective exchange rates move so that necessary adjustments will occur.”

This part of the communiqué was under discussion on Friday. Alistair Darling, UK chancellor of the exchequer, indicated there was a range of views among the G7 over the language but, in a pointed reference to China, he insisted currency levels “should be resolved by markets”.

Mr Darling’s remarks on the sidelines of the International Monetary Fund annual meetings reflected statements from other G7 countries in recent days.

Nicolas Sarkozy, the French president, has said the renminbi was “artificially undervalued”, while Jean Claude Juncker, the Luxembourg prime minister and president of the Euro group, called the renminbi a “real problem”.

Jim Flaherty, the Canadian finance minister, said he would not be surprised to see further pressure put on China. “I expect we’ll have more pressure from the other market currency countries, especially with the Euro being at a relatively high value now,” he said.

The US has been vocal over China’s delay in allowing its exchange rate to rise and is pleased with the new mood in Europe. David McCormick, the US treasury undersecretary, told a press conference: “We welcome the efforts of the Europeans to make that case to China as well.”

China, meanwhile is not sending some of its most senior officials to Washington. Beijing’s relations with the IMF have cooled markedly since the Washington-based organisation adopted the new currency surveillance mechanism, which China believes is directed at forcing a faster appreciation of the renminbi.

As I have always said, China will appreciate its currency at its own pace and the more the US and Europe push for a revaluation, the more China will step back.  We've all been here long enough; we all know how the game is played here!

******************************************************************************

China has no timetable for issuing third-generation mobile telephone licences, a senior regulator announced on Thursday, saying 3G services still lacked a clear business model.

The comments by Lou Qinjian, vice-minister of information industry, make clear officials are in no rush to introduce 3G wireless services in one of the world’s most important markets for telecoms equipment.

International equipment manufacturers have for years keenly awaited Chinese approval for 3G, which is expected to unleash a multibillion-Dollar spending wave on mobile networks.

While 3G technology was “mature” internationally, its operating model and capacity for future development were “still not that great”, Mr Lou said in a rare news conference held to mark the congress of China's ruling Communist party in Beijing.

“To actually issue licences, we need to consider the business model and all kinds of management issues – and we are still in the process of researching these,” Mr Lou said.

Some analysts believe Beijing's main reason for delay is to allow its favoured TD-SCDMA 3G technology to catch up with the much more widely used European-backed WCDMA standard and its US rival CDMA2000.

Olli-Pekka Kallasvuo, chief executive of Nokia, the world’s largest mobile phone maker, said it was “very clear” TD-SCDMA would be one of the 3G technologies used in China.

Mobile operators such as Vodafone have hyped up 3G mobile services such as faster web browsing after multibillion spending on new networks.

American and European consumers, however, have so far shown limited appetite for the services.

Beijing is clearly concerned that China’s new 3G networks might prove a poor return for its four big state-controlled but internationally listed operators.

Chang Xiaobing, chairman of China Unicom, the country’s number two mobile operator, on Thursday said the global development of 3G had shown the government “was not wrong” not to rush to issue licences.

Mr Lou dismissed suggestions of a possible link between the timing of 3G licence issuance and next year’s Olympics in Beijing, in spite of the host’s pledge to have some form of 3G wireless services in place by then.