US Markets - Wall Street stocks enjoyed their best week in more than a month as investors put aside worries about risky credit market investments, a slowdown in the economy and some mixed corporate earnings. (They just tossed these worries aside you see).

Stellar quarterly results from Microsoft lent support to the continuing surge in technology shares while upbeat guidance from Countrywide Financial raised hopes that mortgage lenders might recover from the housing slump sooner than expected.

Expectations of another interest rate cut next week, when the Federal Reserve’s Open Market Committee meets, also helped bolster market sentiment. The futures market has priced in a 100% likelihood of at least a 25 basis point rate cut.

The S&P 500 index closed 1.4% higher yesterday and gained 2.3 per% on the week at 1,535.28. The Dow Jones Industrial Average was up 2.1% over the week at 13,806.70 and the Nasdaq Composite was up 2.9% at 2,804.19.

The utility and technology sectors outperformed this week, while telecoms and industrials showed weakness. Equity indices consistently recorded large intraday swings this week, often rallying late in the session, as the market proved sensitive to a spate of unsubstantiated rumours.

Of the 299 companies in the S&P 500 that have now reported third quarter results, 68% have exceeded estimates, while 21% fell short, according to data from National City. Average earnings have declined 4.9%, hit by poor results from consumer discretionary and financial companies.

Microsoft’s third-quarter results helped spur a rally in technology stocks after they beat expectations. Earnings increased 23% to $4.3bn on revenues of $13.8bn. The shares ended the week 16.1% higher at $35.03.

Apple, up 8.4% on the week at $184.70, also reinforced confidence in technology earnings after the company’s fiscal fourth-quarter profits soared 67%, beating estimates. Research In Motion rose 4.2% at $119.81, on news of a deal to distribute its BlackBerry smartphone in China. EMC’s shares hit a six-year high, 9.6% higher on the week at $24.53, after third quarter earnings rose 74%. Yahoo gained 15.8% at $33.63.

However, semiconductor stocks were a disappointment after some mixed results raised worries over valuations in the sector.

The PHLX Semiconductor sector index fell 4.9% at 451.50.

Texas Instruments fell 6.5% to $31.72 amid worries about its fourth-quarter revenue guidance. Analysts downgraded Broadcom, 17% lower on the week at $33.64, citing concerns about high research costs. Intel fell 1.4% at $25.94 this week.

Motorola gained 2.9% at $19.24 after it posted its first quarterly profit in 2007.

Financial stocks experienced a choppy week as a $7.9bn writedown from Merrill Lynch ignited fears of more bad news to come from US banks. Merrill fell to a $2.3bn loss in the third quarter and its shares shed 0.3% on the week to $63.09. The shares rallied strongly yesterday on reports that Stan O’Neal, chief executive, may be on the way out.

Bank of America was also in focus this week after it announced 3,000 job cuts. The bulk of the cuts will affect its corporate and investment banking division. The shares rose 1% at $48.03. The S&P financial index climbed 2.7% to 451.49, while the investment bank index was 4.7% higher at 204.99.

Mortgage lenders and insurers were particularly volatile. Countrywide Financial reported a third-quarter loss of $1.2bn, compared to a year-ago profit of $648m. But the shares soared 32.4% yesterday after the mortgage lender said it expected a rebound to profitability in the fourth quarter and next year. The stock ended the week 13.6% higher at $17.30.

MGIC Investment, the mortgage insurer, fell 10.3% to $19.37 on the week after it cut its dividend

Homebuilders were higher after new home sales recorded an unexpected rise last month. However existing home sales fell more than expected. The S&P homebuilder index gained 9.8% this week to 430.15. Pulte Homes gained 11.9% to $15.30 in spite of a $787.9m loss in the third quarter.

Energy stocks enjoyed strong gains as oil prices soared to record highs above $92 a barrel. The S&P energy index gained 2.4% at 588.30 this week,

But transport stocks underperformed again. The Dow Transport index gained only 1.4% at 4866.97.

European Markets - European stocks were buoyed by a range of robust earnings reports this week with a particularly strong performance from the telecoms sector.

So, let's go country-by-country and start this week at the bottom of Europe where in Athens Greek shares closed slightly higher, in line with the positive sentiment on international bourses and led up by the National Bank of Greece.

The ASE general index closed 0.3% higher at 5,273.6. The blue chip index rose 0.5% to 2,801.7 and mid caps grew 0.4% to 6,784.7. The small cap index ended little changed at 1,148.6.

Decliners outnumbered advancers 129 to 108 while 88 were unchanged.

National Bank of Greece led blue chip gainers and rose 2% to 47 Eur, continuing its upward trend. The stock is considered a top local bank pick by many international brokers.

Titan Cement ended 1.1% higher at 35 Eur. A Thomson Financial News analysts' poll sees its nine month group net profit coming in flat at 212  million Eur, when it announces its results on Wednesday, Oct 31.

Bank of Piraeus ended little changed at 27.3 Eur. A Thomson Financial News analyst poll said its nine-month group net profit is expected to jump 43% year-on-year to 488  million Eur when it announces its results on Wednesday, Oct 31.

Electricity utility Public Power Corp closed flat at 27.78 Eur, rebounding from earlier losses, on FYR Macedonias announced that will not award the Negotino tender to Hatch. This may open the door for PPCs jv Sencap to compete again in the tender.

Hellenic Exchanges jumped 2.4% to 23.16 Eur. It is also expected to announce solid nine-month results on Monday.

EFG Eurobank recovered its earlier losses to close flat at 26.5 Eur ahead of its nine-month results to be released on Monday, which should be robust.

Refiner Motor Oil rose 1.1% to 17.3 Eur, lifted by rising crude oil prices.

On to neighbours Italy now where in Milan Share prices closed higher, supported by the strong trend in the telecom sector after quarterly results and led by Telecom Italia.

The Mibtel index was up 0.43% to 31,185 points and the S&P/Mib up 0.62% to 40,020.

Volume traded was an estimated 7.224  billion Eur.

Shares moved into positive territory after midday on the firm performance of Wall Street equities and supported by company results.

Telecom Italia gained 2.08% to 2.1875, also supported by yesterday's sale of a controlling stake in the company to Telefonica by Pirelli.

Pirelli eased 0.01% to 0.8825.

Atlantia was up 1.65% to 27.07 after yesterday's company presentation to investors and positive reaction by analysts. One broker said there was 'greater clarity' on the company's strategy.

Generali was up 1.40% to 33.44, off its lows. Earlier the company saw profit taking after the sharp gains in the last two days on a campaign by hedge fund Algebris on Generali's corporate governance.

Lehman said it remains 'underweight' on Generali with a 33.14 Eur price target, seeing little prospect of Algebris changing much, adding Generali has already outperformed the insurance sector.

Unicredito lost 0.48% to 5.61 on renewed worries of a placement. Brokers said their is 'an overhang' of stock with ABN Amro and Munich Re both likely to sell their significant stakes in the bank.

One broker said the two investors could sell 'tomorrow or next year'.

Among other banks, BPM rose 1.36% to 10.50 on merger prospects, while Intesa Sanpaolo rose 1.19% to 5.345.

Unipol, previously seen as a BPM merger candidate, rose 0.49% to 2.5575 on higher prospects of it paying out its excess capital in dividends.

Luxuries were lower on the weak Dollar. Bulgari was off 0.78% to 10.88. Luxottica fell 1.47% to 23.39 ahead of next week's results. One broker said the US economy and Dollar are a worry.

Constructors were mixed. Buzzi Unicem gained 1.71% to 19.63, still reacting to yesterday's 'good' sales data, according to one broker. Italcementi fell 1.49% to 15.87 after a SocGen downgrade.

Impregilo fell 1.34% to 5.30.

Eni added 1.29% to 25.14 ahead of results next week. Its units Saipem gained 0.53% to 30.47 while Snam Rete Gas was down 0.24% to 4.4025.

Enel was up 0.61% to 8.22.

Into Spain now where Madrid Share prices closed sharply higher, with strength in heavyweights Telefonica and Santander leading the IBEX-35 index to a fresh record high.

The IBEX-35 index ended up 217.9 points or 1.42% at 15,603.90, after trading in a range of 15,418-15,652.

Santander rose 0.23 Eur to 14.38, on volume of 71.7  million shares, after Citigroup raised its stance to 'buy' from 'hold,' and upped its price target to 19 Eur from 16 on valuation grounds.

Telefonica gained 0.55 or 2.47% to 22.84, while BBVA, another top pick for Spain, put on 0.15 to 16.72, recovering from earlier losses.

Construction companies rallied, with Ferrovial up 2.5 or 4.37% at 59.7 ahead of nine-month results due Monday, Acciona up 5.7 or 2.72% at 215.0 and ACS gaining 0.97 or 2.48% to 40.16.

Renewable issues surged amid M&A speculation, with Solaria soaring 1.55 or 8.01% to 20.90, Elecnor climbing 3.21 or 8.28% to 42.0 and Fersa 0.16 higher at 8.24.

Dealers noted rumours last week that RWE could be eyeing a recently listed renewable energy group, with Solaria and Fersa tipped as possible candidates, and more recently speculation of a bid by Iberdrola following the utility's renewables-focused 2008-2010 strategic presentation Wednesday.

Among the session's handful of losers, Antena 3 lost 0.18 to 12.53 ahead of nine-month results due Monday, while Acerinox slipped 0.01 to 20.92, after a downgrade by Citigroup to 'sell' from 'hold'. Earlier, rumours continued to circulate on a possible bid by steel peer Outokumpu.

Jumping up into Scandinavia now and starting this week with Sweden where in Stockholm Shares closed little changed, with Sandvik closing sharply lower, but TeliaSonera and Trelleborg sharply higher after their third-quarter results.

The OMX Stockholm index closed down 0.06% at 380.64, while the OMX Stockholm 30 index closed up 0.07% at 1,173.31. Turnover was 31.53  billion SKr.

The main sub-indices movers today were telecommunication services, up 3.81%, technology hardware & equipment, up 1.05%, and industrials, down 0.92%.

The major movers within these indices were TeliaSonera, up 5.60% at 61.25, Ericsson B, up 1.06% at 19.12, and Sandvik, down 5.27% at 125.75.

Sandvik closed lower after the engineering company posted worse-than-expected third-quarter profits.

Trelleborg B closed up 10.02% at 162, on a relief rally sparked by its slightly better-than-expected third quarter results.

TeliaSonera climbed after the telecoms operator announced much better-than-expected third quarter numbers across the board, and a 10  billion SKr extraordinary dividend payment for 2007.

In the banking sector SEB A closed down 2.38% at 184.50, despite reporting slightly better-than-expected third quarter results, as CEO Annika Falkengren at the post-results press conference set the market on edge over the outlook in the Baltics, which is a growth are for the bank.

Swedbank A, which also has big exposure to the Baltics, fell 1.56% to 189.50.

Newsprint and carton maker Holmen B closed up 0.43% at 232.50, after reporting nine-months results largely in line with expectations, with as investors positive to the company's restructuring efforts.

Skipping next door to Denmark now, we go to Copenhagen where Share prices also closed higher, led up by DS Norden on further rises in bulk transport rates, and by William Demant Holding, while Carlsberg fell after Scottish & Newcastle rejected a 720 pence a share bid by Carlsberg and Heineken, and Novozymes was also lower.

The OMXC20 index closed 3.04 points higher at 497.62 and the OMXCB Benchmark index rose 2.57 points to 477.18.

The OMXC All Share index closed 2.67 points higher at 487.39 on turnover of 4.99  billion DKr.

DS Norden closed 15 DKr higher at 679 after rising bulk transport freight rates pushed the Baltic Dry Index about 11,000 points for the first time.

AP Moller-Maersk A rose 400 to 69,200 and the B-shares added 400 to 70,000. According to RB-Boersen, the group's APM Terminals is buying 51% of the Alinport container terminal project in Ecuador.

Sentiment for technology stocks was positive after Microsoft said late Thursday its profit jumped 23%, which helped lift Danish tech stocks.

William Demant Holding was up 17 at 467.5, extending recent gains.

Vestas Wind Systems was down 3 at 461, reversing earlier gains after Goldman Sachs cut the stock to 'neutral' from 'buy' late in the session, and removed it from its 'conviction buy' list.

GN Store Nord was 0.25 higher, while FLSmidth fell 3 to 553 and NKT Holding shed 4 to 554.

Carlsberg B ended the day 10 lower at 678. Scottish & Newcastle (S&N) Thursday rejected a bid for the company by Carlsberg and Heineken. The Danish and Dutch breweries are expected to eventually win control over S&N, but the 720 pence per share bid they launched Thursday for Britain's largest brewer will have to be increased.

Novozymes was down 21 at 584, extending yesterday's losses after the group posted nine-months results slightly below market expectations.

Danisco rose 1 to 401.

Danske Bank added 6.25 to 212.25. The group is expected to report next Tuesday a third-quarter pretax profit of 4.536  billion DKr, down 23% from a year earlier on rising costs and lower net income from trading and insurance, according to a survey of analysts by SME Direkt.

Net interest income is seen increasing 8% from a year earlier, but total income is expected to fall 3% to 10.811  billion DKr. Total costs are seen at 6.073  billion DKr, up 12% year-on-year.

Topdanmark shed 3 to 880, while TrygVesta was unchanged at 410.

Novo Nordisk B added 6 to 618. The group is expected to report a third-quarter pretax profit next Wednesday of 2.734  billion DKr, up 8% from a year earlier, according to a survey of analysts by RB Boersen.

Lifecycle Pharma was up 1 at 47.5 after it announced positive interim phase II trial results for its drug candidate LCP-Tacro, a medication which prevents organ rejection in kidney transplant patients.

Lundbeck fell 1.25 to 146 and Coloplast shed 2 to 501.

Into Norway now where in Oslo Share prices again closed higher, led up by Renewable Energy Corporation after it won a 5.3  billion NKr wafer sales contract, and by Yara International, while Fred Olsen Energy fell on a cut target price at UBS, and Storebrand was also lower.

The OSEBX Benchmark index closed 3.89 points higher at 508.42 and the OSEAX All Share index added 5.00 points to 588.49.

Total turnover amounted to 14.93  billion NKr.

Renewable Energy Corporation (REC) closed 10.5 NKr higher at 260 after the group was awarded a 5.3  billion NKr wafer sales contract by Belgian silicon cell producer Photovoltech.

Hafslund B added 2 to 152.5. The group posted an 11.8% drop in third-quarter operating profit to 1.5  billion NKr on revenues of 1.67  billion NKr, down from 2.3  billion previously. The company blamed the results on lower power prices.

Yara International was up 9 at 204 on the continued strength of the fertiliser market, analysts said.

Norske Skog rose 1.2 to 54.7. Dealers said Norske Skog may be thinking of a merger with Stora Enso as recently announced production and manpower cutbacks will not be sufficient to maintain earnings in 2008 and 2009.

Fred Olsen Energy shed 8.5 to 262.5 after UBS cut its price target on the stock to 330 NKr from 365 following yesterday's weaker-than-expected third-quarter results, dealers said.

StatoilHydro rose 1.9 to 182.8. According to Russian business daily Kommersant, StatoilHydro is paying 800  million usd for its 24% stake in the Shtokman gas field, dealers said. HSBC also cut its target for the stock to 200 NKr from 205 on a reiterated 'neutral'.

Prosafe was up 2.6 at 94 after it extended a contract with an undisclosed client for the provision of the accommodation rig 'Safe Concordia' to a location in the US Gulf of Mexico, in a deal worth 58  million usd.

Seadrill rose 0.5 to 129.5. The group will issue five-year convertible bonds worth up to 900  million usd in order to fund both its current new-build programme and allow it to take advantage of other opportunities.

Ocean Rig added 2 to 44, with dealers saying there are rumour that an Indian oil company has issued a letter of intent to charter Ocean Rig vessels for five years.

And rounding out the Nordic Arena yet again this week is Finland where in Helsinki shares closed slightly higher, with Nokia-led gains offsetting falls in a group of key stocks such as Metso, which extended yesterday's slide after major broker downgrades, and with Uponor falling sharply on a disappointing third-quarter results.

The OMX Helsinki 25 ended up 0.19% at 3,294.69 and the OMX Helsinki all-share index closed 0.62% higher at 12,429.74, with volume of 1.6  billion Eur.

A group of key stocks provided some relief such as Nokia, finishing up 1.51% at 27.64 Eur, Outotec, up 3.04% at 48.75 Eur and YIT, 0.64% higher at 20.43 Eur.

YIT said it lifted profit margins to more than 9% in the third quarter as robust demand for construction services offset the impact of easing demand for housing in its home market.

TietoEnator closed up 1.64% at 17.38 Eur.

The company said third-quarter profits fell on the back of losses made in units providing IT services to the financial and healthcare industries.

Metso fell 5.04% to 42.00 Eur after Citigroup downgraded the stock to 'hold' from 'buy' and cut its target to 45 Eur from 50, while Lehman Brothers cut its rating on the engineering group to 'equal-weight' from 'overweight' while retaining its 50 Eur target, following yesterday's results, according to traders.

Uponor lost 6.97% to 19.18 Eur after the plumbing, heating and cooling systems specialist posted a bigger-than-expected decline in third-quarter earnings on weaker demand in Germany and other key European markets.

In forestry, Stora Enso R was 1.02% higher at 11.91 Eur and UPM-Kymmene up 0.34% at 14.90 Eur.

Mills owned by Stora Enso have halted production today after employees walked out in protest at the company's plans to close plants and cut 1,700 jobs, according to Finnish media reports.

M-real B closed 1.03% lower at 3.86 Eur.

Moody's Investors Service said it has changed the outlook on M-real to negative from stable and affirmed the paper and packaging group's 'B3' corporate family rating (CFR).

The change of outlook reflects M-real's free cash flow generating capacity, that is weak even in today's benign macroeconomic environment and prone to further weakening in conditions of continuing cost inflation, adverse foreign exchange movements and sluggish price development, Moody's said.

Moving slowly back down to marginally warmer climes and to Switzerland where in Zurich shares closed in positive territory tracking Wall Street, with Swiss Re outperforming after offering 2.35  billion stg for certain of the UK insurance group Resolution plc's closed books, as part of an overall bid from Standard Life.

At the close, the Swiss Market Index was 45.47 points higher at 8,962.92 and the Swiss Performance Index was 33.71 points up at 7,319.94.

The Euro was higher at 1.6731 SFr and the Dollar fell to 1.1628 SFr.

Positive investor sentiment was underpinned by a rally on Wall Street on good third-quarter earnings, with focus on Swiss Re, which closed 1.6%, or 1.70 SFr higher at 106.30.

The insurer's share price surged in afternoon trade following its 2.35  billion stg offer to buy certain of Resolution's closed books operations from Standard Life, with investors relieved that the deal will not impact Swiss Re's 6  billion SFr share buyback programme.

The deal is conditional on Standard Life's completion of its takeover bid for Resolution.

Elsewhere in the sector, Zurich Financial added 1.25 SFr to close at 347.50, and Swiss Life fell 0.50 SFr to close at 314.50.

In other financials, Julius Baer rose 2.8%, or 2.60 SFr, to close at 94.65, but rivals underperformed. UBS was down 0.50 SFr, closing at 61.95, and Credit Suisse was 0.15 SFr lower, closing at 75.95.

Amongst the market's other losers, Adecco was the market's biggest decliner but was off earlier lows, falling 1.7%, or 1.20 SFr, to close at 69.60. Earlier, Citigroup downgraded its stance on Adecco to 'sell' from 'buy', citing the sharp decline in staffing demand in Europe since the beginning of the year.

Blue-chip pharmaceuticals were mixed across the board, with Roche falling 1.60 SFr to close at 200.00 and Novartis rising 0.20 SFr to close at 60.70.

Nestle closed 5 SFr higher at 538.

Outside the SMI, Swissquote rose 2%, or 1.40 SFr, to close at 70.50 after reporting a first nine-month net profit rise of 40.8% to 35.9  million SFr, with an increasing number of new customers and improved operational efficiency.

Siegfried was unchanged, closing at 193 SFr. Earlier the pharmaceutical company missed nine-month sales forecasts after reporting sales of 227.7  million SFr. Analysts had called for 236-239  million SFr.

Bucher rose 1.8%, or 5 SFr, to close at 277 amid price target hikes by analysts on the back of its forecast-beating nine-months results Thursday.

Across the border in Germany , Frankfurt saw its major share indices close higher as gains by automotive stocks VW and Continental and an early rally on Wall Street helped investors shrug off profit warnings from two TecDAX-listed companies that caused the tech-laden index to tumble.

The DAX closed 16.73 points or 0.21% higher at 7,949.17 points after trading between 7,919.20 and 7,970.36 today.

The MDAX rose 7.60 points or 0.07% to 10,589.34 points, while the TecDAX retreated 11.05 points or 1.10% to 989.11.

DAX futures added 12.00 or 0.15% to 7,997.00, while bund futures declined 0.08 or 0.07% to 113.87.

Automotive stocks led gains Friday, with auto supplier Continental adding 5.21 Eur or 5.38% to 102.01 Eur ahead of its third-quarter results to be released on Oct 31.

The tyre and auto parts manufacturer is expected to release solid third-quarter earnings on Wednesday, with investors awaiting statements on the process of the integration of Siemens AG's former VDO unit.

Third-quarter net profit likely rose 10.3% to 268.46  million Eur from 240.8  million, according to the average forecast of eleven analysts polled by Thomson Financial News.

Volkswagen rose 7.30 Eur or 4.18% to 181.80 Eur as the carmaker's consensus-beating third-quarter figures finally won out over less positive elements in today's earnings statement, which analysts and traders said called into question Europe's largest automaker's growth potential.

MAN shares gained 1.28 Eur or 1.08% to 120.14 Eur amid warmed-over rumours that peer Scania might soon launch at a takeover bid, with traders saying they had heard talk of an offer at 137 Eur per share.

Bucking the trend, Daimler shares were 0.96 Eur or 1.23% lower at 76.80 Eur correcting from yesterday's gains on the back of solid third-quarter results and perhaps also put under some pressure after WestLB downgraded its stance on the automaker to to 'add' from 'buy' while reiterating a 78 Eur-per-share target.

Elsewhere on the DAX index, Deutsche Telekom added 0.35 Eur or 2.51% to 14.28 Eur as its shares continued a six-day advance, which was bolstered yesterday by positive results from French peer France Telecom and after ABN AMRO upgraded its stance on the telecommunications giant to 'hold' from 'sell' in sector review.

Merck KGaA advanced 0.82 Eur or 0.96% to 86.22 Eur as the shares rebounded from pressure earlier this week after the pharma and chemicals company failed to allay investors' concerns that its liquid crystals business is set to encounter competitive headwinds.

On the other end of the DAX, Hypo Real Estate led decliners, dropping 0.86 Eur or 2.12% to 39.66 Eur.

Metro lost 0.53 Eur or 0.89% to 59.10 Eur, which traders attributed to a weak consumer climate index this morning and disappointing margin and sales growth figures from Dutch peer Ahold.

The GfK market research institute said its consumer climate index for Germany is forecast to fall to 4.9 points in November from 6.7 points in October, which was revised down from 6.8 points.

Over on the MDAX, SGL Carbon slumped 2.27 Eur or 5.32% to 40.41 Eur, continuing yesterday's declines after reporting an in-line third-quarter earnings report amid market disappointment that the carbon and graphite producer did not raise its forecasts as hoped.

MTU Aero Engines slid 1.76 Eur or 4.19% to 40.22 Eur, continuing a slump from yesterday which traders said could have been prompted by profit taking after the aircraft engine specialist released better-than-expected third-quarter results.

At the other end of the MDAX, K+S added 14.38 Eur or 11.06% to 144.38 Eur as the top performer on the index.

The TecDAX suffered significant declines paced by Conergy and QSC after both companies warned that their full-year profits would likely come in under previous guidance.

Conergy plummeted 16.93 Eur or 31.94% to 36.07 Eur after the solar energy specialist said late yesterday its 2007 profits are expected to drop due to lingering currency effects and uncertainty over progress on some of its larger projects.

QSC was 0.24 Eur or 7.32% lower at 3.04 Eur after the software company said it now anticipates revenues of about 325  million Eur for 2007, instead of the previous forecast of more than 350  million Eur, and an EBITDA of about 35  million Eur, instead of between 50-60  million Eur.

At the other end of the TecDAX, Epcos was 1.74 Eur or 14.81% higher at 13.49 Eur after the company said it will increase its dividend and WestLB has raised its stance on the shares to 'buy' from 'hold' and reiterated its target price of 15 Eur a share, which leaves some 25% upside to current prices.

Into France now where in Paris Share prices closed higher, coming off a small decline at lunchtime, as investors reacted to morning gains on Wall Street, where enthusiasm over corporate news outweighed concerns over soaring oil prices and a sliding Dollar.

The CAC-40 index finished up 34.57 points or 0.60% at 5,794.87.

Among CAC-40 stocks, 23 closed higher and 17 closed lower. On the Matif, November CAC-40 futures were trading at 5,801.

On the broader indices, the SBF-80 index closed down 16.56 or 0.24% at 6,939.51 while the SBF-120 ended up 20.19 or 0.48% at 4,224.70.

Friday's gains allowed the CAC-40 to wipe out losses from earlier in the week and end up 54.39 points or 0.95% on last Friday's close of 5,740.48.

Peugeot SA led CAC-40 risers, up 3.65 Eur or 6.31% at 61.46, lifted by its consensus-beating quarterly sales and other goods news in the auto sector.

French peer Renault SA rose 3.56 or 3.32% to 110.91, helped by Nissan's higher-than-expected contribution to Renault's earnings.

Vivendi SA also posted strong gains, ending up 1.10 or 3.66% to 31.14, helped by an upgrade to 'buy' from 'hold' at ABN Amro.

The enthusiasm pushed up telecoms operator Neuf Cegetel, in which Vivendi has a 40% stake. Neuf ended up 1.32 or 4.05% at 33.95.

In contrast, Dexia shed 0.52 or 2.40% to 21.13, leading fallers on the CAC-40.

The Franco-Belgian bank was affected by renewed worries about its exposure to subprime problems through its US unit Financial Security Assurance (FSA).

Accor also gave ground, dropping 0.81 or 1.22% to 65.42. The Paris dealer noted that the hotel sector has fallen out of favour on the markets after enjoying big gains in the early part of this year.

EADS was another significant faller as the aeronautics group reacted to the sliding Dollar. The strength of the Euro against the Dollar has become a serious financial burden on Airbus, which invoices its planes in Dollars but a major part of its costs in Euros.

EADS ended down 0.25 or 1.01% at 24.55.

Outside the CAC-40, TF1 saw profit-taking after publishing above-forecast third-quarter sales figures, as investors took advantage of a recent strong run on the back of government plans to liberalise broadcasting regulations.

TF1 shares closed down 0.52 or 2.60% at 19.49.

Back on the upside, SEB SA surged 7.59 or 6.05% to 132.99 after revealing a 41% jump in nine-month operating profit to 165  million Eur.

CA Cheuvreux upgraded the stock to '2 Outperform' from '3 Underperform', saying SEB's valuation is modest and the current price level 'is an excellent entry point'.

Theolia also starred among midcaps, adding 1.12 or 6.38% to 18.67. The group's decision to issue launch a maximum of 240  million Eur of convertible bonds has been warmly received by the market.

The renewable energy producer is also firmly in focus due to France's Grenelle Environnement summit, at which President Sarkozy yesterday pledged 1  billion Eur for the 'energy and motors of the future.'

Next door in The Netherlands Shares in Amsterdam closed higher, closely tracking Wall Street and aided by heavy trading in index heavyweight Royal Dutch Shell.

The AEX rose 1.22 points or 0.22% to 547.16, after trading in a range 542.77-548.29.

Ahold led decliners, shedding 5.36% to 10.24 Eur as third quarter earnings showed solid improvements in overall group sales, but margins and sales in the US disappointed.

ASML dropped 3.96% to 24.50 Eur while Vedior shed 3.05% to 15.24 Eur, continuing yesterday's sell-off after third-quarter earnings.

Corporate Express shed 1.18% to 7.52 Eur and Akzo Nobel dropped 0.86% to 54.43 Eur.

Randstad shed 0.64% to 38.86 Eur and Heineken lost 0.57% to 47.05 Eur amid market talk that Heineken and Carlsberg may have to raise their bid price for Scottish & Newcastle.

Hagemeyer dropped 0.22% to 4.63 Eur amid reports that a Hagemeyer shareholder has said that the Rexel takeover offer is too low.

TNT rose 0.42% to 28.40 Eur ahead of third-quarter earnings on Monday.

KPN rose 1.13% to 13.46 Eur ahead of earnings on Tuesday.

ArcelorMittal rose 1.32% to 56 Eur after it said it will buy Italian steel distributor Carminati.

Philips rose 1.34% to 28.67 Eur on a positive read-through from TSMC's third-quarter results in which Philips has a stake, traders said.

Royal Dutch Shell added 2.64% to 30 Eur amid high trading volumes as oil prices hovered around record highs.

Among midcap shares, Vopak dropped 4.17% to 40.65 Eur after a trading update which was deemed 'light' by analysts.

USG People dropped 2.07% to 19.90 Eur ahead of earnings on Monday.

Wessanen rose 0.94% to 10.73 Eur, Fugro rose 0.96% to 61.03 and ASMI added 2.08 pc tto 21.08 ahead of Monday's earnings.

Among small caps, Spyker crashed, dropping 6.17% to 3.80 Eur after the car maker said it expects an operating loss over the third quarter on the sale of its Formula 1 racing team.

And last but not least this week in the European review, we go into Belgium where in Brussels Shares closed flat with imaging technology company Agfa-Gevaert leading the gainers and financial services group Dexia the sharpest faller.

At the close, the Bel 20 was up 5.52 points or 0.13% at 4,399.21.

Agfa-Gevaert climbed 0.30 Eur or 3.28% to 9.45, followed by speciality materials group Umicore, up 3.31 Eur or 1.91% at 176.58.

Cofinimmo closed up 2.31 Eur or 1.82% at 128.90. The company posted nine-month results after the market close which showed net profit up to 126.1  million Eur from 86.6  million last year. It also upped its full-year dividend forecast by 4% to 7.75 Eur.

Dexia was the chief faller, down 0.53 Eur or 2.45% at 21.13, with analysts and traders saying the stock is suffering from general negative sentiment in the banking sector on the back of the ongoing sub-prime crisis.

Financial peers KBC and Fortis performed better, climbing 0.93 Eur or 1.00% to 93.64, and 0.20 Eur or 0.91% to 22.17, respectively.

Utility group Suez closed 0.46 Eur or 1.03% higher at 45.00, while brewer InBev gained 0.48 Eur or 0.74% at 128.90.

Steel cord and wire manufacturer Bekaert was 2.11 Eur or 2.16% lighter at 95.58.

Chemicals and pharmaceuticals group Solvay dropped 1.78 Eur or 1.70% to 103.20. Earlier, the group posted third-quarter results which beat expectations, with net profit rising to 218  million Eur from 181  million last year.

Telecoms operator Mobistar fell 0.33 Eur or 0.52% to 62.60. The group announced the departure of chief executive Bernard Moscheni and the appointment of chief financial officer Werner De Laet as interim replacement.

Outside the Bel 20, biotech group ThromboGenics fell 0.25 Eur or 2.84% to 8.55, semiconductors maker Melexis dropped 0.28 Eur or 2.45% to 11.14, and EVS Broadcast Systems fell 2.03 Eur or 2.72% to 72.50.

IT components manufacturer Option fell back after intraday rallies of over 7% to close up 0.11 Eur or 1.77% at 6.33.

CMB climbed 1.41 Eur or 2.28% to 63.17. The shipping group posted a rise in nine-months net profit last night and hinted at elevated performance to come.

Peer Exmar fell 0.46 Eur or 2.09% to 21.54. Last night, the company said its nine-month net profit fell to 22.0  million usd from 74.4  million last year.

Investment fund GIMV fell 0.61 Eur or 1.28% to 47.14. Earlier, it said it has launched leveraged buy-out (LBO) activities in France by signing a partnership deal with French Pragma Capital.

Under the agreement, GIMV said it will invest 40  million in the Pragma II buy-out fund.

UK Market - Vodafone closed in on the 200p level last touched six years ago, as the telecoms sector enjoyed a strong day.

Europe’s largest mobile phone group was boosted this week when better-than-expected figures from France Telecom were partly attributed to a strong showing in the UK. Vodafone shares have surged by a third in the past six months as investors have bought into the group’s defensive appeal and cash-generative profile.

ABN Amro on Friday raised its stance on Vodafone from “hold” to “buy” and said a more certain outlook for the company in Europe and its exposure to emerging markets made it one of the top picks in the sector.

While Vodafone closed up 2.1% at 193½p, its highest level for six years, Cable & Wireless gained 1% to 193.6p amid talk of a possible bid from Tata, the Indian conglomerate. Not to be left out, BT Group rose 2.2% to 327½p.

In the wider market, the FTSE 100 surged 85 points, or 1.3%, to 6,661.3 as the index continued to outperform the FTSE 250, which rose 29.1 points, or 0.2%, to 11,509.6. Over the week, the blue chips rose 2% and the mid-caps gained 1.8%.

Mining stocks once again set a strong pace as investors continued to buy into their exposure to emerging markets.

Xstrata gained 5.6% to £35.28 and Rio Tinto rose 4.3% to £44.17.

With oil hitting a new all-time high above $92 a barrel, BP shrugged off problems at its energy trading arm to record a gain of 2.7% to 629p, while Royal Dutch Shell rose 3% to £21.21.

The bid battle for Resolution took several new twists as the closed life fund group recommended a takeover from Standard Life. Not to be outdone, Pearl, which had already had one approach for Resolution knocked back, raised its offer to 720p and took its stake in Resolution to 24%.

While Resolution rose 2.4% to 726½p and Standard Life gained 0.8% to 278½p, jilted Friends Provident, which had hoped to merge with Resolution but is now left looking for a new suitor, lost 0.5% to 174.9p.

Bid speculation boosted Kingfisher, the owner of the B&Q home-improvement chain, which jumped 7.1% to 185.3p. Analysts said the slump in Kingfisher’s share price – currently 40% below its high for the year – was such that bid talk was inevitable. However, potential buyers remain scarce, with Home Depot of the US preoccupied with problems at home and private equity bidders handicapped by the credit squeeze.

Standard Chartered, the emerging markets-focused bank, rose 4.9% to £18.05 amid rumours of possible interest from Bank of China. At the end of a week when a leading Chinese bank bought a big stake in the largest bank in Africa, the rumour could not be totally dismissed, although the Chinese were quick to distance themselves from the speculation.

J Sainsbury lost 3.2 per to 565½p as Merrill Lynch questioned why Delta Two, which is bidding 600p-a-share for the supermarket group, was seeking an extra £500m of equity from the Qatar Investment Authority.

Charter lost 4.8% to £10.90 as Panmure Gordon cut its recommendation on the engineering group from “buy” to “hold” after “slow-down warnings” from rivals ITW and Lincoln Electric.

Japan & Asia Pacific - Most Asian markets rose Friday, with Hong Kong hitting its second straight record close and Japan getting a lift from Honda and Sony earnings.

Japan ese stocks rose as investors responded enthusiastically to positive earnings from Honda and Sony.

The Nikkei 225 average added 1.36% to 16,505.63 points, rebounding from Thursday's 0.5-percent loss.

Honda Motor Co. surged 8.9%. The country's 2nd largest automaker said after the market closed Thursday its profit climbed 63% in the latest quarter on solid sales of fuel-efficient cars.

Sony Corp. jumped 8.8% after the company reported Thursday afternoon its net profit shot up more than 40 times from the same period a year ago.

Other gainers Friday included brokerage firms, which were cheered by Nomura Holdings' smaller-than-expected loss reported Thursday. Nomura Holdings Inc. shares rose 4.1%.

Hong Kong ’s surging stock market broke through the pyschological threshold of 30,000 on the Hang Seng benchmark index on Friday, boosted by expectations of a cut in US interest rates.

The index hit a lifetime high of 30,562.63 before slipping back to end the day 1.8% higher at 30,405.22. That still represented a rise of 49.1% since the worst day of the credit turmoil in August and a 52.3% gain since the beginning of the year.

Hong Kong investors have been anticipating a flow of billions of Dollars of Chinese savings entering the stock market as Beijing gradually makes it easier for mainland investors to send money abroad.

The Hang Seng record close came after the territory’s monetary authority bought US Dollars for the second time this week, as the Hong Kong Dollar continued to rub up against the upper limit of its trading band.

Demand for the local currency, which is allowed to trade in a range of HK$7.75-HK$7.85 to the US Dollar, is surging as capital flows into Hong Kong’s stock market. Market turnover reached HK$157.4bn ($20.2bn) on Friday.

The Hong Kong Monetary Authority purchased $100m on Friday. But the HKMA said that this time banks had approached it to buy Hong Kong Dollars.

Investors in mainland Chinese stocks are wary of any further tightening measures after the economic growth figures.

But Chinese shares still rose as the Yuan's gains against the US Dollar boosted banks and property firms. The benchmark Shanghai Composite Index rose 0.5% to 5,589.63. The Shenzhen Composite Index rose 0.3% to 1,378.06.

Some institutional investors bought these stocks because these companies' assets are largely RMB-denominated.

Minsheng Bank jumped 4.7%, and China Merchants Banks rose 4%, while property firm China Vanke gained 4.9%, and Poly Real Estate Group rose 5.7%.

Elsewhere in the region, Thailand 's main stock index gained 0.1% to 894.57 in a hectic trading day. Gains in energy and banking blue chips pushed the SET index to an 11-year high at 911.60, but it quickly fell back as short-term investors cashed out.

Indonesia benchmark index on the Jakarta Stock Exchange rose 1.1% to 2,624.43. Traders said the market is likely to consolidate Monday after recent sharp gains.

In Malaysia The Kuala Lumpur Composite Index rose 1.5% to a record close of 1,398.35 on broad buying support by both local and foreign funds.

Philippine shares advanced as investors snapped up bargain stocks ahead of third-quarter earnings results and an extended weekend. The 30-company Philippine Stock Exchange Index inched up 0.45% to 3,784.88.

South Korean shares rose sharply Friday to a two-week high on a late session surge in some technology stocks. The Korea Composite Stock Price Index rose 2.6% to 2,028.06. The won hit its highest level in more than a decade against the US Dollar.

Banks and property companies lifted Singapore 's benchmark index, with analysts predicting further gains next week on strong blue chip earnings. The Straits Times Index rose 1.7% to 3,771.55 points

Into India now where the stockmarkets on Friday closed at all-time record high heaving a sigh of relief that all uncertainties surrounding the future of PNs and ODIs have been put to rest once and for all. The stringent controls imposed by the market regulator SEBI to weed out "dirty PNs" have been received well by the markets.

The Bombay Stock Exchange’s 30-scrip Sensitive Index settled for the week at a record high of 19,243.17 points registering a rise of 472.28 points or 2.52%. The 50-share Nifty of National Stock Exchange ended at 5,702.3 points with an increase of 2.39% or 133.35 points.

The trend looked positive and the business defied general expectations that the indices would slump since the new SEBI curbs have come into force. Some domestic brokers at Dalal Street claimed today’s purchases were by genuine buyers who have all along been complaining against rank speculators.

Down Under now and starting in Australia where the share market enjoyed a strong day of trading with mining and energy stocks leading the rally because of strengthening global commodity and base metal prices.

The benchmark ASX 200 rose 1.1% to close at 6,716 points, while the All Ordinaries closed 71 points higher at 6,700.

BHP Billiton rose 2% to $45.76 while shares in rival miner Rio Tinto went up 2.5% to close at $107.

The prospect of upcoming earnings reports helped National Australia Bank's shares increase 1.6% to close at $42.70.

Construction material suppliers like James Hardie and Boral suffered from the protracted US housing downturn, closing down 3% and 1.1% respectively.

Strong oil prices helped petroleum giant Woodside rally 2.4%.

Meanwhile Qantas shares gained five points to close at $6.01. The airliner yesterday revealed soaring jet fuel prices have prompted a review of its fuel surcharge on ticket prices.

And rounding out the Asia Pacific region this week we go to New Zealand where New Zealand share prices fell Friday, led down by leading stocks Telecom and Contact Energy.

The benchmark NZX-50 index fell 40.43 points or 0.95% to close at 4,226.71 on light turnover worth 83.6 million New Zealand Dollars.

Declining stocks outnumbered rises 62 to 40.

Contact Energy fell 19 cents to 9.05 Dollars after it told shareholders that earnings would be flat in the current year, as the company battled high gas prices and low wholesale power prices.

Top stock Telecom fell 11 cents to 4.31 Dollars after announcing it would spend 1.4 billion Dollars over five years to expand fast broadband to every town in the country.

Casino and entertainment firm Sky City was down two cents to 5.40 Dollars after it said it was quitting the sale of its Adelaide casino, while bidders sized the company up.

It said it was comfortable with its August projection of a 10 to 12% increase in profit in the current year.

Stock exchange operator NZX jumped 19 cents to 9.50 Dollars after it reported a 49% rise in third quarter net profit to 2.29 million Dollars.

Commodities - Crude oil hit a record high above $92 a barrel on Friday, driven higher by fresh geopolitical tensions in the Middle East, tight market fundamentals and increased options-related buying.

Nymex December West Texas Intermediate hit a peak of $92.22 a barrel before easing back to trade 85 cents higher at $91.28, up 3% this week.

With Turkey threatening military action against Kurdish militants in northern Iraq, Middle East tensions were further inflamed by news of a new round of sanctions against Iran by the US government. Iran is the second largest producer in the Organisation of the Petroleum Exporting Countries.

Although Opec insists the market remains well supplied, there are indications that the cartel has already started to ship more crude ahead of its planned supply increase of 500,000 barrels a day from November 1.

However, Opec’s supply assessment was undermined by a huge fall of 5.3m barrels in US crude inventories, announced on Wednesday, which provided hedge funds with fresh impetus to drive prices higher.

China, the world’s second largest oil consumer, complained about high oil prices at the start of its meeting with Opec this week, the first for two years.

Sam Bodman, the US energy secretary, called on Opec to raise production, and pressure for action is clearly mounting ahead of the cartel’s November meeting.

ICE December Brent hit a high of $87.30 before easing back to trade 32 cents higher at $87.80 a barrel, up 4.8% this week.

Gold rose 1.7% to $778.10 a troy ounce this week, touching a fresh 28-year high of $781.90 in the process, amid renewed Dollar weakness and concerns about inflation.

Speculators have built a record long position in gold in New York, betting on further price gains. This has increased concerns about the possibility of a price correction if speculators decide to take profits.

Platinum rose 0.9% this week to a record $1,454 a troy ounce, supported by supply disruptions in South Africa following a spate of mining deaths.

Mining operations are to be shut after fatal accidents pending investigations by South Africa’s Department of Minerals and Energy, and supply deficit is expected in the market this year as a result of output losses.

The Baltic Dry index, which tracks the cost of shipping dry bulk commodities, continued its record-breaking run. It smashed through the 11,000 level to 11,025 – up 2.1% this week – supported by robust demand for iron ore and coal from China.

Currencies - Another volatile week on the currency markets saw the Dollar fall to a record low against the Euro as fears mounted over the state of the US economy.

It had all started so differently, with the Dollar putting in its best one-day performance against the Euro in almost two years on Monday amid a broad-based sell-off in global equities.

The Dollar rallied across the board as the resulting fall in risk appetite saw speculators take off bets against the US currency, which according to data released from the Chicago Mercantile Exchange were approaching record levels.

Similarly, the Yen made strong gains as investors cut back carry trade positions, in which the low-yielding Japanese unit is sold to finance the purchase of riskier, higher-yielding assets elsewhere.

However, as equity markets regained their poise, the trend reversed, sending the Dollar and the Yen lower.

Analysts said the Dollar came under pressure as a string of weak economic data, including more bad news from the US housing market, offered further evidence of slowdown that was likely to prompt the Federal Reserve to cut US interest rates at its meeting on October 31.

The Dollar dropped to a record low of $1.4388 against the Euro on Friday, leaving it 0.6% softer against the single currency on the week. The Dollar also dropped to a three-month low of $2.0570 against the Pound Friday, before paring its losses to stand flat on the week at $2.0520. The Dollar lost 0.1% to SFr1.1620 against the Swiss franc over the week.

Surging oil prices, which powered to fresh record highs Friday, also hurt the Dollar and boosted the currencies of oil producing countries, pushing the Canadian Dollar to a 33-year high against its US counterpart.

The Canadian Dollar, which was also helped by expectation-beating Canadian retail sales figures, rose 0.4% to C$0.9630 on the week.

Soaring gold prices helped the Australian Dollar climb 2.9% to $0.9166 against the US Dollar over the week.

The Yen, however, fell 0.2% to Y114.30 against the Dollar as data from Japan revealed continued economic weakness.

Japanese price data released Friday showed deflation, with the core annual rate remaining negative in September for the eighth consecutive month.

It will be a hard sell for Japanese policymakers to justify a rise in interest rates anytime soon, which stand at 0.5%, at next week’s Bank of Japan meeting or the one in November.

The timing of the hike of course holds significance for interest rate markets, but for the Yen the greater consideration remains yield appetite. The exact monthly timing of a 25 basis point hike by the BoJ is neither here nor there when set against the still healthy spread that would be on offer against the high yielders.

The Yen fell 0.5% to Y164.30 against the Euro over the week, and 3% against the higher-yielding New Zealand Dollar to Y87.67.

But the Pound was flat against the Yen at Y234.40 on the week and dropped 0.5% to £0.7007 against the Euro after the Bank of England warned that the UK financial system remained vulnerable to shocks from the global credit squeeze.

In South Africa the Rand reached its best level in 17 months, at 6.5070 in morning trade against the Dollar on Friday, but receded a little during the day. The local unit was still floating on the announcement that Standard Bank will sell a 20% stake to the Industrial and Commercial Bank of China.

The rand was flat against the US Dollar and was bid at 6.5407 from its previous close of 6.5408. The Rand lost 0.25% against the Euro and was bid at 9.4013 from its previous close of 9.3774.

And as always, rounding out currencies here in China, we go to the RMB which this week broke the 7.50 mark against the US Dollar. The RMB ended the week at 7.4872 to US Dollar versus 7.4820 in OTC trade.

China - With its investment in Africa’s largest bank, Industrial and Commercial Bank of China has pulled ahead of its domestic rivals in a race that has only just begun.

ICBC is the world’s largest bank by market capitalisation and its $5.5bn (£2.7bn, €3.8bn) purchase of 20% of Standard Bank is the biggest foreign investment by a Chinese bank to date.

It is a sign of things to come, from not only China’s banks but also its sovereign wealth fund, its insurance companies and its revived brokerage sector.

Beijing has made no secret of its desire for its state-owned banks to look for overseas acquisitions so they can gain expertise and improve China’s own relatively backward banking system.

The government hopes to encourage more capital ­outflows to balance China’s ballooning trade surplus, reduce foreign exchange reserves and relieve appreciation pressure on the renminbi. For their part, the banks are flush with cash thanks to record profitability and the huge initial public offerings of the past two years. They would like to expand beyond their borders to reduce their exposure to risks of an eventual slowdown at home.

“Our current overseas presence doesn’t match ICBC’s profile in terms of its business capabilities and it doesn’t provide adequate capabilities for ICBC to withstand risks such as foreign exchange risk”, Jiang Jianqing, ICBC chairman, said on Thursday. “It is our intention to increase the current proportion of overseas business from 3% to 10% but we can’t do this through organic growth alone.”

Risks at home include the possibility that a frustrated government will take stronger measures to slow the roaring economy, which grew 11.5% in the first three quarters.

Increasing competition among China’s banks that all have the same domestic strategy is also a worry for China’s bank executives who all started their careers at the country’s central bank.

ICBC is differentiating itself with what may prove the most successful foreign acquisition strategy of any Chinese bank. Frustrated in its efforts to gain a banking licence in the US and wary of attempting a huge take­over in the developed world, ICBC “will focus on China’s bordering countries and regions, on places with financial centres and on emerging markets” for acquisitions, more of which are definitely on the cards, according to Mr Jiang.

Over the past year ICBC has tested the water by buying into small banks in Indonesia and Macau, before diving in with Standard.

There is a real business proposition for Chinese banks in Africa because outside the financial sector there’s been a lot of investment by Chinese companies and the relationship has become a lot closer.

By contrast, China Development Bank’s purchase of a stake in Barclays went awry after Barclays’ bid for ABN Amro foundered. If that deal had gone through CDB would have more than 8% of the combined Barclays-ABN for $14bn. In the end, it paid about $3bn for 3% of Barclays.

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China’s economy is on target this year to achieve its fastest annual growth rate since 1993 after continued strong expansion in the third quarter in spite of a raft of government measures to control investment and credit growth.

The economy grew at an annual rate of 11.5% in the third quarter on the back of robust investment and exports, only marginally slower than the 11.9% rate seen in the second quarter.

Growth is now on track to surpass 11% this year, which would be the fastest annual increase in output since the 13.1% achieved in 1993.

The figures suggest China’s powerful growth remains unchecked, even after five interest rate rises this year, directives to state banks to cool lending, and repeated calls by the central government for tighter enforcement of environmental rules.

Economists also said the growth figures confirmed that Beijing’s attempts to shift the focus of the economy to consumption and to cool investment in energy-hungry industries had not yet succeeded.

Wen Jiabao, the premier, reinforced the government’s message in a statement to the State Council on Wednesday, saying China needed to continue to control investment and credit growth. The government also said that inflation fell to 6.2% in September from an 11-year high in August of 6.5%.

However, Beijing continues to send mixed signals. Hu Jintao, the president and head of the Communist party, said in his address to the five-yearly party congress last week that high-speed growth remained the government’s core objective.

Chinese shares fell by nearly 5% on Thursday (although they did claw back 0.49% yesterday) on concerns about further interest rate rises and the launch of a potentially record-breaking initial public offering by PetroChina.

The Shanghai composite index dropped 4.8% to 5,562 points, the biggest one day drop since July, and has now fallen 9% from the record high it reached last week.

However, Chinese share prices are still up 90% since the start of the year and few analysts on the mainland believe that the downward movement of the last week is the start of a prolonged bear trend.

The announcement on Thursday that the Chinese economy is continuing to surge ahead at a rapid rate, growing 11.5% in the third quarter against 11.9% in the second quarter, prompted speculation that the government will take further measures to try and cool economic activity.

Shares were also driven lower on Thursday by the launch of PetroChina’s Shanghai initial public offering, which could be the biggest ever on mainland markets.

The state-owned oil group said that its shares would be priced between Rmb15 and Rmb 16.7, which began online subscriptions on Thursday and is expected to close early next month. If the shares are priced at the top of the range, the group will raise Rmb66.8bn, just ahead of the Rmb66.6bn raised by Shenhua Energy earlier this year in what was the biggest ever mainland share offering and the largest in the world so far this year.

PetroChina said on Thursday that the second cross-China pipeline it is planning to build will cost $13.6bn, however it also told investors that it will soon have news on a large gas discovery.