US Markets - Wall Street stocks pared early gains on Friday after new home sales hit their lowest rate in more than 12 years, raising fears that the declining housing market would constrain US economic growth.

Traders looked to buy into weakness in early trade after a sharp sell-off on Thursday but the major indices later turned negative as homebuilder stocks came under pressure. Investors bought energy stocks as crude oil prices climbed, but also showed a preference for consumer staples and utilities, indicating they remained in a defensive mood.

The S&P 500 rallied off its low for the session to close up 0.1% at 1,478.49 points, having gained as much as 0.8%. The S&P ended the week down 0.4%, a trading period shortened by Christmas.

The Nasdaq Composite fell 0.7% on the week to 2,674.46 points, while the Dow Jones Industrial Average was down 0.6% at 13,365.87.

Small-cap stocks fared poorly. The Russell 2000 fell 1.8% this week and is poised to underperform the S&P for the first time in eight years.

Homebuilders suffered sharp losses on Thursday after new home sales fell 9% to an annual rate of 647,000 in November, much more than economists had anticipated. The previous month’s sales figures were also revised sharply lower.

Although the number of unsold homes on the market fell, the slower sales rate increased the inventory backlog to a 9.3 month supply, a 5.7% increase

The S&P homebuilder index fell 3.2% to 358.18 for a 1.6% decline this week. KB Home fell 7.8% to $21.08 over the period.

Credit insurers fell sharply after Warren Buffett, the billionaire investor, prepared to launch a municipal bond insurance unit, posing a threat to monoline insurers struggling to cope with credit market turmoil.

US bond insurers have come under increasing pressure to shore up their capital levels amid rating agency threats of credit downgrades because of their exposure to high-risk debt securities.

MBIA fell 6.5% to $18.74 and Ambac Financial shed 5.8% to $25.12 this week.

Separately, Berkshire Hathaway, Mr Buffett’s conglomerate, agreed to buy a reinsurance unit from ING Group, the Dutch financial services company, for about $433m. Berkshire this week also purchased a controlling stake in Marmon Holdings, the manufacturing and services group.

There was more reassuring news for the industrial sector after two reports showed a pick-up in business activity in the Midwest and New York this month.

Financials were again a drag on leading indices this week after Goldman Sachs warned it expected three banks, Citigroup, Merrill Lynch and JPMorgan, to share $33.6bn in writedowns in the fourth quarter. Merrill fell 4.6% to $52.97 in spite of securing a $6.2bn capital injection from Singapore’s Temasek Holdings and Davis Selected Advisers. Traders were disappointed Merrill had sold stakes at a discount to its market price.

Sallie Mae fell 1% to $19.65 after the troubled lender sold $1bn of convertible securities and $2bn of common stock to pay off sour derivative bets.

Energy stocks made solid gains as concerns about supply and a spike in geopolitical tension caused crude oil prices to surge back towards $100 a barrel.

Among the chief beneficiaries were Hess, the oil producer and refiner, up 4.1% at $101.98 and Transocean, the world’s largest offshore drilling company, 1.5% higher at $146.02. Weatherford International, an oilfield services company, rose 2.9% to $70.44.

Companies in the materials sector also profited from a spike in commodity prices. Alcoa rose 1.4% to $36.86 while United States Steel climbed 3.9% to $119.77.

The transport sector continued to struggle as energy costs looked poised to soar. Airlines felt particularly heavy selling pressure.

JetBlue, the low-cost carrier, fell 6.3% to $6 while UAL, parent of United Airlines, declined 3.5% to $34.49 this week.

Retailers were also in focus as investors studied early indicators for the important Christmas shopping period.

Macy’s, the department store operator, fell 4% to $25.48 this week and Dillard’s lost 3.5% to $18.78.

European Markets - The FTSE Eurofirst 300 was 0.1% lower over the week at 1,506.09 points in thin trade on either side of the Christmas holiday.

Energy and resources stocks provided a ray of light, boosted by surging crude oil and commodities prices.

German shares closed slightly higher Friday after a quiet last trading day of the year. The market withstood a lower Wall Street close yesterday and on major Asian stock exchanges, to complete a strong year on a positive note.

The German DAX advanced 21.82% during 2007.

The Frankfurt Stock Exchange closed exceptionally early at 2.00 pm.

The DAX closed 28.72 points, or 0.36%, higher at 8,067.32 points after trading between 8,068.95 and 7,991.91.

The MDAX gained 77.94 points, or 0.80%, to 9,864.62 points, while the TecDAX was down 1.04 points, or 0.11%, at 974.19 points.

DAX futures advanced 68.50 points, or 0.85%, to 8,144.50, while bund futures won 0.13 points, or 0.12%, to 112.80.

Leading blue-chips higher, Adidas rose 1.32 Eur or 2.64% at 51.26.

MAN shares gained 2.39 Eur or 2.15% at 113.80, as the stock continued to gain after the company confirmed last Friday that it hiked its voting rights in Scania AB to 15.57% from 14.83% by swapping 3.6  million B shares in the Swedish truckmaker for A shares, which have 10 times more voting power than B shares.

Fresenius Medical Care advanced 0.56 Eur, or 1.55%, at 36.69, after the US FDA last night said it approved treatment using the medical company's blood-thickening solution Voluven in patients who have had massive blood loss.

Infineon was the worst performer on the German large-caps index, losing 0.09 Eur, or 1.10%, at 8.07. Traders said the losses were due to window-dressing efforts, as fund managers sold shares in the worst performer of the DAX index during 2007.

Shares in Deutsche Postbank were 0.45 Eur, or 0.74%, lower at 60.75 as the worst-performing financial stock.

Peer Hypo Real Estate slipped 0.25 Eur, or 0.69%, at 36.10.

Over on the MDAX, Techem fell 4.30 Eur or 7.13% at 56.00 as the worst performer, while Rheinmetall added 2.68 Eur or 5.18% at 54.38

GPC Biotech lost 0.10, or 3.56%, at 2.71, as the worst performer on the TecDAX, while Versatel gained 1.52 Eur or 6.09% at 26.48 as the best performer among tech stocks.

Across to France now where in Paris Share prices finished flat in thin holiday trading.

The CAC-40 index finished 0.23 points lower at 5,627.25.

Among CAC-40 stocks, 18 closed higher and 22 closed lower. On the Matif, January CAC-40 futures were trading at 5,642.00.

On the broader indices, the SBF-80 index closed 1.09, or 0.02%, lower at 6,313.50 and the SBF-120 ended down 0.23, or 0.01%, at 4,065.76.

Air France-KLM was in the spotlight after Italian economy minister Tommaso Padoa-Schioppa said he is advising Alitalia to start exclusive talks with Air France-KLM for a binding offer to merge the two airlines. Air France-KLM rose 0.38, or 1.62%, to close at 23.85.

Alitalia's board had already recommended the Air France offer over the one submitted by AP Holding's Air One. The economy minister also said the sale procedure envisages an eight-week period for exclusive talks with Air France-KLM.

Accor was the day's biggest gainer, ending the session 1.28, or 2.39%, higher at 54.75. Essilor also gained 0.49, or 1.13%, to close at 43.81.

Utility stocks outperformed in the bearish market environment, with Gaz de France ending the session 0.31, or 0.77%, higher at 40.64 and EdF closing 0.28, or 0.34%, stronger at 81.55. EdF also announced this morning it has finalised the sale of its Mexican assets, valued at 1.45  billion usd, to Spain's Gas Natural.

Elsewhere in the energy sector, Total ended the session 0.38, or 0.67%, higher at 56.72 on the back of a surge in oil prices following the assassination of Pakistan's Benazir Bhutto.

Societe Generale ended the session 0.11 or 0.11% higher at 98.99. The French bank announced this afternoon it has signed an agreement to launch a life insurance joint venture in India. Fellow banking stock Dexia ended the session 0.14 or 0.82% higher at 17.27, while BNP Paribas slipped down 0.09, or 0.12%, to close at 74.50 and Credit Agricole edged lower to close 0.10, or 0.43%, at 23.04.

Capgemini continued its slide as it shed speculative gains sparked by talk of a takeover bid from India's Wipro. The stock lost 0.61, or 1.40%, to close at 42.96.

STMicroelectronics also continued to suffer after yesterday's announcement that its joint venture with Intel has been postponed to the first quarter of next year as the two groups have had difficulties obtaining the necessary financing. The stock was 0.06, or 0.61%, lower at 9.85 at the close.

Alcatel-Lucent posted the CAC-40's biggest losses of the day, closing 0.14 or 2.73% lower at 4.98, as concerns sparked by STMicroelectronics' announcement spilled over to other technology stocks. The stock has been hard hit because of fears over its exposure to the US economy, as well as disappointment over the slow progress of the integration between Alcatel and Lucent.

EADS recovered from lows earlier in the session to close 0.11, or 0.50%, to close at 22.02. Renewed concerns about its exposure to the Dollar had offset a report in this morning's Les Echos that the aerospace and defence group's Airbus unit is ahead of target in its cost-cutting plans.

Hopping across to Belgium now where in Brussels Shares closed higher on thin and directionless trade from a lack of corporate news, with real estate group Cofinimmo heading the blue-chip gainers.

At the close, the Bel 20 was up 8.82 points or 0.21% at 4,147.19.

Cofinimmo was up 3.79 Eur or 3.03% at 129.00 Eur.

For the heavyweight financials, Dexia was up 0.21 Eur or 1.23% at 17.29 Eur. KBC Group was down 0.38 Eur or 0.39% at 95.88 Eur and Fortis was down 0.04 Eur or 0.22% at 18.24 Eur.

KBC said its asset management arm is 'looking for any opportunities' in India, but declined to comment on local press reports that Union Bank of India has shortlisted it as a potential partner for its mutual fund businesses.

Fortis said it has received a banking license from the Japanese Financial Services Authority and will expand its global merchant banking operations there from next year from Jan 31.

A spokesman for Fortis said the licence is in line with the bank's strategy to selectively expand in Asia.

Fortis Haitong Investment Management said it has won regulatory approval to launch its first fund product under China's qualified domestic institutional investor scheme.

Brewer InBev was up 0.46 Eur or 0.81% at 57.38 Eur and supermarket group Delhaize rose 0.09 Eur or 0.15% to 59.08 Eur.

Colruyt was up 0.19 Eur or 0.12% at 162.72 Eur. After the market group, the discount supermarket group said it has acquired 100% of Enco Catering Services for an undisclosed price.

Colruyt said the group would be complementary and it sees 'further growth potential' of poultry products in retail.

It also said the acquisition may also 'serve as a catalyst' for the further development of the foodservice activities of Collivery, the delivery service of Colruyt.

For the fallers, telecoms group Belgacom was down 0.33 Eur or 0.97% at 33.75 Eur. Utility Suez fell 0.01 Eur or 0.02% to 47.17 Eur.

In The Netherlands Shares in Amsterdam closed lower in quiet trade, but off intra-day lows, as disappointing data on US new home sales pressured stocks on Wall Street, while Wolters Kluwer led AEX decliners, market sources said.

The AEX closed down 0.74 points or 0.14% at 515.69, after opening at 517.95, reaching a mid-afternoon high of 516.92 and a very late afternoon low of 515.52.

Publisher Wolters Kluwer led decliners as it shed 0.94% at 22.13, but at the opposite end of the index, peer Reed Elsevier added 1.42% at 13.55.

Among financials, Fortis fell 0.33% at 18.21 amid news the company received a banking license from the Japanese Financial Services Authority and said it will expand its global merchant banking operations there from next year.

ING lost 0.26% at 26.78 amid news the company sold its reinsurance unit NRG at a loss for about 300  million Eur.

Peer financial Aegon bucked the negative to gain 0.41% at 12.18.

Oil and energy heavyweight Shell fell 0.79% at 28.81 amid reports the oil company and its consortium partners had to pay a fine of 2-4  billion usd to Kazakhstan.

Heineken fell 0.32% to 44.26 as it said it will acquire Syabar Brewing company in Belarus and amid reports Scottish & Newcastle might be open to going to the negotiating table should Heineken and Carlsberg up their bid price for the UK brewer.

On the midcap, Oce fell 2.07% at 12.32 Eur to lead decliners.

Among blue chip gainers, Akzo Nobel added 1.16% at 54.18, while peer DSM rose 0.56% at 33.25.

TNT rose 0.46% at 28.18 amid news it will start a number of new projects in 2008 to standardise 'as far as possible' the collection, preparation and delivery of mail, and contribute to the already announced annual savings targets.

On the midcap, tech stock ASMI lifted 3.26% to 15.86.

In Zurich Swiss shares moved closed lower on its last trading day in 2007 as weaker-than-expected US new home sales data weighed on sentiment.

The Swiss Market Index closed 33.73 points down at 8,484.46, while the Swiss Performance Index was down 18.98 points at 6,925.44.

The Euro dropped to 1.6611 sfr, while the Dollar eased to 1.1290 sfr.

Overall, the Swiss bluechip index closed 301.28 points lower as compared to the first day of trade this year, when the index closed at 8,765.74.

Sharpest fallers Friday included Syngenta, down 3.50 sfr or 1.2% at 288.50, Nestle, down 3.50 sfr at 520.00, and Swiss Re closing 0.45 sfr lower at 80.45.

Banks were also down, with Julius Baer shedding 1.05 sfr, or 1.1%, to 93.60, and Credit Suisse easing 0.40 sfr to 68.10.

UBS dropped 0.20 sfr to 52.40. Earlier the group said that its Global Asset Management will not proceed with its planned acquisition of Standard Chartered Bank's mutual funds management business in India.

Any costs accruing to UBS through abandonment of the planned transaction will be negligible and will have no material impact on UBS' earnings, the bank said.

Among the pharma heavyweights, Novartis eased 0.25 sfr at 62.10, while Roche ended the year flat at 195.60 sfr.

The few gainers included Nobel Biocare, up 4.25 sfr, or 1.4%, at 303.00, Synthes up 0.60 sfr at 140.60, as well as Adecco closing 0.20 sfr higher at 61.25.

Outside the SMI, Micronas closed flat at 11.20 sfr, after the group said it will discontinue its activities in the area of set top boxes for IPTV as part of its restructuring efforts aimed at streamlining its product portfolio in the consumer division.

Into Austria now and Vienna where Shares closed slightly lower, albeit in very light trade, on the last day of trading for 2007 with losses in financials, and Telekom Austria outweighing gains in OMV and voestalpine.

The stock exchange will be closed on Monday, Dec 31 and Tuesday, Jan 1, and trade will resume as normal on Wednesday, Jan 2.

The ATX closed down 0.21% or 9.66 points at 4512.98. The ATX Prime closed 0.02% or 0.38 points down at 2,128.73.

Pulling the blue chip index lower, Telekom Austria shares retreated 1.50% to 19.03 Eur, albeit in well below average volumes.

Financial stocks also pressured; heavyweight Erste Bank shed 1.02% to 48.50 Eur after being named by Merrill Lynch as one of its interim 'least preferred' banking shares, while Raiffeisen International dropped 1.09% to 103.60 Eur.

RHI slipped 0.32% to 28 Eur after gaining almost 6% yesterday on speculation its majority shareholder MS Stiftung will be obliged to make a mandatory takeover bid for the company next year.

Ending the session lower after the release of poor US housing data this afternoon, Wienerberger closed down 2.49% at 37.93 Eur.

Shares in Austrian Airlines led the leaders in terms ofpercentage, last dealing up 4.17% at 6.25 Eur. Observers were at a loss to explain the strong advance in the airlines shares, which gained despite the rising cost of fuel.

Andritz followed, only shortly behind, closing 4.15% higher at 41.45 Eur after a string of orders across Asia and in Australia reported in December helped support the share.

Oil and gas major OMV closed up 2.01% at 55.42 Eur after oil prices held close to the one month highs hit yesterday.

Oil prices were supported today by fresh geopolitical tension after Pakistan opposition leader Benazir Bhutto was assassinated yesterday, and as US crude oil stocks tightened.

Also closing higher on the back of strong crude oil prices, Schoeller Bleckmann Oilfield rose 3.25% to last deal at 61.57 Eur.

In-line with steel sector peers voestalpine gained for the second day to close 1.62% higher on the day at 49.45 Eur.

Elsewhere on the broader ATX Prime index, shares in fellow airline SkyEurope tumbled 5.98% to 1.73 Eur on oil prices and after the company announced it had received a 15  million Eur loan from its majority shareholder York.

Shares in insurance company Uniqa ended slightly down at 20.95 Eur. The company said today it had boosted its holding in a Ukrainian insurance company Credo-Classic to 61% from 35.

Shares in Scandinavia closed the last session of the year slightly higher across the board, with Sweden closing the full year in negative territory for the first time since the 2000-2003 bear market.

The OMX Stockholm index closed up 0.72% at 351.84, while the OMX Copenhagen index closed up 0.66% at 446.69, with the Olso OSEAX index climbing 0.72% to 569.94.

In Stockholm, the biggest market in the region, the main index lost 6.04% in 2007.

Nordic and Baltic bourse owner OMX closed flat at 261.50 SKr. It said it will comply with ruling stipulated by The Swedish Tax Board in 2004, and as a consequence, it will carry a VAT surcharge of around 85  million SKr as a one-off operating cost in the fourth quarter of 2007.

It said the surcharge will have no cash flow effect. For 2008, OMX estimates a negative impact on operating income of about 3  million SKr.

Among other shares heavily traded in Stockholm, Sandvik closed up 1.60% at 111 SKr, Handelsbanken A closed up 1.47% at 206.50, and Hennes & Mauritz B up 1.42% at 392.50.

In Oslo, Tandberg Storage closed up 39.77% at 2.46 NKr, and Tandberg Data closed up 25% at 2.75 NKr. The sharp increases in the share prices caused the Oslo bourse to temporarily restrict trading in the shares while investigated the share price movements. The sharp gains left traders puzzled.

In Oslo, the oil related companies continued to do well supported by the firm oil price, with StatoilHydro closing up 1.32% at 168.90 NKr, SeaDrill up 1.92% at 132.50, but with insurer Storebrand closing down 1.22% at 56.70.

In Copenhagen Vestas extended Thursday's over 4% gains, climbing 1.85% to 552 DKr. The share continued to benefit from bullish sentiment ahead of an expected strong 2008, and from a slew of recent big order wins.

Among other big shares in Copenhagen, AP Moller closed up 2.06% at 54,400 DKr, rebounding from yesterday's 3% fall, with Novo Nordisk up 0.45% at 335 DKr, and Danske Bank down 1.25% at 199.75 DKr.

In Finland Shares rose Friday in a light and uneventful session, ending a turbulent year on the bourse, with M-real and Huhtamaki the day's notable gainers.

The OMX Helsinki 25 index of top stocks gained 0.42% to 3,010.11. The index finishes the year up 3%, and well off a high of 3,379.03 that was reached in July before the first rumblings of the credit crunch were felt.

Nokia dropped 0.86% to 26.52 Eur, though it finishes as the exchange's biggest blue chip gainer in 2007.

The handset maker's market value soared by over 70% as investors applauded market share growth and an ambitious advance into Internet services.

Other fallers in Friday's session were insurer Sampo, down 1.20% at 18.08 Eur, and engineer Outotec, down 1.29% at 37.60 Eur. Outotec soared 68% in 2007, its first full calendar year on the bourse.

Papermaker M-real provided relief today, jumping 6.56% to 3.25 Eur after a late rally, as did packaging group Huhtamaki, which rose 4.77% to 8.12 Eur.

Huhtamaki, on the search for a new chief executive to help improve its fortunes, was 2007's biggest heavyweight decliner, its market value plunging 45%.

Another casualty was Uponor, which lost 39% as signs of a slowing construction market prompted investors to dump stock in the plumbing and heating systems supplier.

Down to The Med' now and starting in Spain where Share prices closed lower, unaffected by a broadly positive early showing on Wall Street, as investors squared positions at the close of the year.

The IBEX-35 index closed the year down 73.90 points at 15,182.30, after trading in a range of 15,124-15,251.

Telefonica fell 0.29 Eur or 1.29% to 22.22, while amongst other blue chips, Santander put on 0.03 to 14.79 and BBVA was up 0.03 at 16.75. Other leading banks were on offer, however, with Sabadell down 0.02 at 7.41 and Popular off 0.08 at 11.70.

Repsol YPF extended yesterday's gains, up 0.10 at 24.38, while amongst other gainers AGBAR put on 0.05 to 27.53.

Real estate and constructors were broadly on offer, with Colonial leading the losers to fall 0.64 to 1.88, extending yesterday's heavy slide.

According to today's press, the real estate company's board has called for its chairman to resign amid the poor performance of its share price which has shed almost 36% in the last three months.

Amongst other property issues, Renta Corporacion fell 0.67 to 15.28, while Montebalito fell 0.69 to 9.30. Astroc pared earlier losses to add 0.16 to 5.00.

Ferrovial led the builders lower, down 1.28 at 48.12, on ongoing concerns about possible strike action at its BAA unit's UK airports. ACS fell 0.38 to 40.65 and Acciona was off 1.80 at 216.85.

Sacyr bucked the trend, however, rising 0.10 to 26.60 and FCC was up 0.10 at 51.40.

Corp Dermoestetica dropped 0.34 to 7.33, amid mixed investor sentiment towards the news of the sale of its British arm Ultralase to private equity firm 3i for 174.5  million stg.

Neighbours Portugal saw Shares close the last session of the year lower, retreating from earlier gains, pressured by blue chips Portugal Telecom and EDP, while conglomerate Sonae and builder Soares da Costa outperformed.

The PSI 20 index closed down 56.84 points at 13,038.34 after trading in a range of 13,038-13,140.

Telecoms were weak, with heavyweight PT shedding 0.07 Eur to 8.98.

Smaller peer PT Multimedia was down 0.17, or 1.81%, at 9.23. PTM said that BES has cut its stake in its share capital to 3.97% versus 8.97% after selling about 15  million shares in over-the-counter transactions on Dec 20. PTM did not disclose the identity of the buyer or buyers of the stake, or any other financial details.

BES shed 0.06 to 15.04.

In the same sector, Sonaecom was down 0.07 or 2.01% at 3.42, extending recent weakness.

Meanwhile, Sonae gained 0.06, or 3.16%, to 1.96. Analysts deemed positive the company's announcement of the timetable of the spin-off and listing process of its Sonae Capital unit.

Yesterday, Sonae said shares traded on the stock market from Jan 4 will no longer give shareholders the right to the shares of Sonae Capital. ESR analysts said that during this period of trading with the rights, they expect a positive impact on the shares.

Also among gainers, Soares da Costa rose 0.02 to 2.08. Caixa BI reinitiated coverage on the stock with an 'accumulate' recommendation and a 2.45 target, praising the company's international profile and diversification plans.

Among energy stocks, EDP shed 0.01 to 4.45, retreating from earlier gains after news that state-owned bank CGD has hiked its stake to 5.24% from 4.90%. BPI analysts said the news is 'neutral to positive' for EDP as it represents a reinforcement by a key shareholder.

Galp shed 0.34 Eur, or 1.79%, to 18.69, retreating from recent gains supported by more positive E&P newsflow from Brazil.

Among banks, blue chip BCP edged up 0.01 to 2.94. BCP said its superior board supports a list of potential candidates for its executive board headed by Carlos Santos Ferreira, former chairman of state-owned bank CGD, confirming earlier media reports.

Into Italy now where Milan shares ended marginally higher, outperforming other European bourses, led by Alitalia and Fiat, but dealers noted that trading was lacklustre on the last trading session of the year.

The Mibtel index ended up 0.58% at 29,402, while the S&P/Mib index finished 0.55% higher at 38,554 on volumes worth some 2.414  billion Eur.

Alitalia surged 8.29% to finish at 0.801 Eur, after the Italian economy ministry gave its go-ahead to the ailing airline to start a phase of exclusive talks, that will last eight weeks, with French carrier Air France-KLM.

Fiat ended up 2.48% at 17.70 after news that the government decided to insert incentives to scrap old cars in favour of buying newer and less polluting ones in its end-year decree.

Without the incentives market experts had forecast a double digit fall in new car registrations this year. The measure was initially supposed to be part of the 2008 budget law, but the government decided not to insert it due to opposition from the Green party, which is part of the ruling coalition.

Prysmian posted a end-of-session rebound ending up 3.11% at 16.89 after a period of weakness that started at the beginning of Nov when Korea's Taihan Eelctric Wire announced the purchase of a 9.9% stake

Among utilities, AEM finished up 3.11% at 3.1375 on its last day of trading. From Jan 2, the share will be listed as A2A, following its merger with ASM Brescia SpA, which will also be de-listed. ASM shares ended up 0.28% at 4.99.

Cement and construction stocks were generally stronger with Italcementi up 1.46% to end at 14.63, Buzzi Unicem adding 1.56% to finish at 18.93 and in the construction sector Impregilo adding 1.72% to finish the year at 4.62.

There was profit taking on Finmeccanica, which shed 1.21% at 21.97 and on Mediolanum, which after gaining yesterday as much as 10%, fell 0.61% to finish the year at 5.495.

And last - but by no means least - we turn to Athens where Greek Shares recovered earlier losses to close higher after Wall Street's positive open, albeit in light trade.

The Athens Stock Exchange will close two hours early on Monday, at 3 pm local time, and will resume normal trading hours on Wednesday, following the New Year's holiday.

Friday, the ASE general index closed 0.2% higher at 5,152.1 and the blue chip index closed little changed at 2,741.6. Mid- caps and small caps both closed 0.2% higher at 6,209 and 1,047.1, respectively.

Advancers outnumbered decliners 117 to 113, while 92 remained unchanged in below-average trade of roughly 180  million Eur.

Refiner Hellenic Petroleum led blue chip gainers and grew 1.8% to 11.2 Eur, rebounding after falling 1.7% in trade yesterday.

Lottery operator OPAP also recovered loss ground from yesterdays session and grew 1.5% to 27 Eur.

Electricity utility Public Power Corp lost 1.1% to 34.9 Eur after jumping 1.4% yesterday. In a press release, it clarified and explained the four areas under consideration for its potential Memorandum of Understanding with Germanys RWE. PPC also added that it is not looking for a strategic investor and said it will consider proposals for cooperation from other energy companies.

Titan Cement closed 0.6% higher at 31.2 Eur after announcing yesterday that its unit Interbeton will acquire 100% of ready-mix cement maker Domiki Beton.

Chemicals company Neochimiki slid 0.5% to 20.62 Eur. It announced that it will merge by absorption with its 100% owned units Lamda Lamda, Petrosol, Monochem and Neochimiki International.

UK Market - Cairn Energy was among the few stand-out features when the London market closed lower for the first time in seven sessions.

Shares in the India-focused oil exploration company spent a second session at the top of the FTSE?100 leader board. They rose 3% to a record high of £30.90, extending gains this week to 8.8%, as the crude price closed in on $100 a barrel. Traders said Cairn shares had also been supported by takeover rumours.

RS Sharma, chairman of ONGC, India’s state oil company, said this week that it could raise $20bn (£10.5bn) to buy stakes in big oil and gas companies. ONGC has been mooted many times as a possible bidder for Cairn, which is developing the giant Rajasthan field in north-western India through its Cairn India subsidiary.

The firmer crude price helped Tullow Oil rise 1% to 656p and BG Group gained 0.9% to £11.52.

In the wider market, leading shares closed lower in quiet trading. The final scores showed the FTSE 100 down 20.9 points, or 0.3%, at 6,476.9 with the heavyweight banking sector responsible for most of the decline. Goldman Sachs warned on Thursday that more subprime writedowns would be revealed in the new year.

The FTSE 250 advanced 42 points, or 0.4%, to 10,650.3. Market turnover was poor on the last full trading day of 2007 with only 1bn shares changing hands. Over the week the FTSE?100 gained 42.8 points, or 0.7%, and the FTSE 250 rose 118.7 points, or 1.1%.

Forth Ports provided the day’s speculative feature. Its shares firmed 0.5% to £19.30 as bid rumours continued to swirl. The talk was that the company had received an approach from Babcock & Brown, the Australian investment group, which was pitched at just over £24 a share and Macquarie, a rival Australian finance house, was also running the slide rule over the company.

Forth runs seven commercial ports in the UK. It also owns a substantial property portfolio in Edinburgh. In September, the company submitted the biggest planning application in the city’s history for the regeneration of Leith Docks.

Friends Provident advanced 1% to 159p as investors built positions before next month’s strategic review. The life assurer, whose merger with Resolution fell apart this year, is deciding whether to break itself up.

Resolution fell 0.1% to 711p in spite of news that the Office of Fair Trading will not refer Pearl’s £5bn acquisition of the company to the Competition Commission.

Kesa Electricals was one of the top performers in the FTSE 250, rising 5% to 234p on news that it was in exclusive talks to sell But, its French furniture arm, for €550m (£406m). Traders said the disposal would allow Kesa to focus on its core electricals division, comprising Darty in France and Comet in the UK, and the mooted price was good.

Capital & Regional, the property manager and investor, was 5.7% lower at 391¾p amid reports that Westfield had shelved plans to sell out of its £530 million UK shopping centre fund after failing to find a buyer. Telecity, the data centre operator, eased 1.3% to 294p as investors moved to lock in profits. Telecity has been a stellar performer since it floated in October at 220p. The stock has been pushed higher by overseas investors who view Telecity as cheap compared with Equinix, its US rival.

Tradus, the online auction company that recently recommended an £18 a share cash offer from South Africa’s Naspers, ticked up 0.1% to £18 on vague counter-bid hopes.

Alibaba.com, China’s biggest e-commerce company, plans to expand into Europe through acquisitions, according to David Wei, its chief executive, and is looking to spend about 60% of the $1.7bn raised at the time of its flotation last month.

Northern Rock, the stricken mortgage lender, eased 3.2% to 83p in spite of RAB Capital announcing it had raised its holding to 7.5%.

Japan & Asia Pacific - Asian stock markets fell Friday after the assassination of Pakistani opposition leader Benazir Bhutto heightened geopolitical risk, sending Wall Street sharply lower and leading Japan to an almost 2% decline on its final day of trade for the year.

The Karachi Stock Exchange is closed for three days as the nation observes a period of mourning for the slain politician. Bhutto was hoping to be re-elected premier in next month's elections and was campaigning when she was shot by an assassin who then blew himself up.

Friday's shortened half-day session saw the Nikkei 225 shed 1.7%, or 256.91 points, to 15,307.78.

The year's final trading day in Friday saw exporters such as Canon Inc among the main drags on the market, with investors discouraged by a firmer Yen and worries about the subprime issues and the US economy's outlook.

Tokyo stocks also fell out of favour because foreign investors were disappointed by Japanese firms' mindset such as a willingness to adopt anti-takeover measures and the government's slowness in implementing structural reforms.

In other trading Friday, Japan's widely quoted Topix index, which tracks all First Section stocks on the Tokyo Stock Exchange, fell 24.26 points, or 1.6%, to 1475.68. Japanese markets will be closed for extended New Year's holidays and is slated to reopen 4 January.

Decliners outnumbered gainers 1,478 to 170, with 76 issues unchanged.

Volume traded was 881 million shares, compared to 1.37 billion shares for a full-day session yesterday.

Japan's weak economic data released before the market open added to the downbeat sentiment.

The government said household spending in Japan dropped 0.6% in November against expectations for a 0.4% rise. November industrial output fell 1.6% on less chip shipments.

Mitsubishi UFJ Financial lost 34 Yen or 3.1% to 1,047, while Mizuho Financial Group Inc was down 16,000 Yen or 2.9% at 534,000.

Toyota Motor Corp shed 120 Yen or 1.9% to 6,040. Sony Corp dropped 140 Yen or 2.2% to 6,200. Canon Inc fell 140 Yen or 2.6% to 5,200.

Japan Airlines Corp was down 15 Yen or 5.6% at 255 Yen after the Nikkei reported that Japan's largest carrier will call for a capital infusion of 100-150 billion Yen from major creditors and business partners in order to accelerate its turnaround efforts.

Suzuki Motor Corp was 80 Yen or 2.3% lower at 3,370 Yen. The Nikkei said the Japanese automaker will spend around 100 billion Yen on doubling its dealerships to 1,000 by 2010 and making India its primary market.

In Hong Kong Share prices closed lower amid geopolitical worries following the assassination of Pakistan opposition leader Benazir Bhutto, with investors also fretting about weak US economic data.

A fresh rise in oil prices added to the gloomy mood, while the settlement of December futures contracts also kept trade cautious.

Property stocks saw continued profit-taking after recent gains driven by a strong sector outlook.

China Eastern Airlines and Air China bucked the trend on hopes that a strengthening RMB will reduce debt servicing costs on their US-Dollar denominated loans.

Among other bright spots, Bank of East Asia (BEA) was up after news that a unit of Spain's La Caixa is increasing its stake in the local lender to 8.89% from 4.34%.

The market will have a half-day session on Monday ahead of the New Year.

The Hang Seng index closed down 472.33 points or 1.7% at 27,370.60, off a low of 27,296.86 and high of 27,678.40. For the week, the index is down 256 points or 0.93%.

Turnover was low at 78.22  billion $HK.

The property sub-index fell 821.09 points or 2.19% to 36,664.82.

China Eastern was up 0.22 $HK or 3.13% at 7.26 and Air China rose 0.20 $HK or 1.88% to 10.86, while BEA was up 1.40 $HK or 2.72% at 52.90.

South Korean shares closed lower on Friday, the last trading day of the year, as investors cut their positions following the release of downbeat industrial output data.

Institutional window-dressing emerged mid-way after president-elect Lee Myung-Bak said he will remove most corporate investment-related regulations on enterprises. But the upside was capped as South Korea's November industrial output data released in the afternoon missed market expectations.

According to official data, industrial output fell by a seasonally-adjusted 0.2% in November, after expanding at its fastest pace in six months in October, due to slower production of semiconductor chips and vehicles.

The November output came in below the 0.4% rise forecast by seven economists polled by Thomson Financial.

The KOSPI index closed down 11.49 points or 0.6% at 1,897.13, after trading between 1,890.81 and 1,911.67.

Trading volume was unusually thin, with 226 million shares worth 3.6 trillion Won exchanging hands.

Advancers outpaced decliners by 463 to 333.

Institutions and foreign investors were net buyers of shares worth 15.2 billion Won and 31.9 billion Won each while retail investors were net sellers of 76.3 billion Won.

Samsung Securities dropped 14,000 Won or 2.5% to 556,000 Won, hurt by the heavy losses in US chipmakers.

LG Philips LCD jumped 1,700 Won or 3.6% to 49,500 Won, with investors attracted to its positive earnings outlook.

Hyundai Motor rose 600 Won or 0.9% to 71,600 Won and Kia Motors ended flat at 10,100 Won. The two carmakers under the Hyundai Auto Group announced its revenue target of 70 trillion Won next year, up 9.4% from this year.

Banks initially enjoyed institutional interest as global credit concerns eased but they succumbed to the selling pressure in the end. Kookmin Bank fell 800 Won or 1.2% to 69,000 Won and Shinhan Financial slipped 200 Won or 0.4% to 53,500 Won.

Lotte Shopping surged 170,000 Won or 11.2% to 1.690 million Won, driven by Lotte Group's aggressive expansion in overseas market.

China A-shares closed lower on profit-taking ahead of the New Year holidays, with heavyweights such as PetroChina and ICBC lower in the last trading session of the year, dealers said.

The benchmark Shanghai Composite Index closed down 47.33 points or 0.89% at 5,261.56.

Turnover fell to 133.68  billion RMB from 147.04 in the previous session.

The Industrial and Commercial Bank of China (ICBC) shed 0.08 RMB to 8.13, and China Life Insurance Co Ltd declined 1.36 RMB to 57.66.

Ping An Insurance (Group) Co of China Ltd lost 3.24 RMB to 105.00. The insurer said it will lead a consortium to invest about 16  billion RMB in an express railway linking Beijing and Shanghai.

PetroChina Co Ltd fell 0.43 RMB to 30.96, and China Petroleum & Chemical Corp (Sinopec) lost 0.58 RMB to 23.43.

China United Telecommunications Corp Ltd declined 0.21 RMB to 12.08, after surging 8.28% yesterday on hopes its restructuring will go forward because of a government decision to accelerate the implementation of 3G.

Sichuan Changhong Electric Co Ltd, a major TV maker, tumbled 0.32 RMB to 8.63, after the China Securities Regulatory Commission (CSRC) rejected the company's 400  million-share private placement plan.

Pacific Securities Co Ltd, based in southwestern China's Yunnan province, soared 33.92 RMB or 424% to 41.92, on its first trading day in Shanghai after a backdoor listing via Unida Co Ltd.

Airlines saw some interest as a stronger RMB is seen reducing their foreign debt burden. The central bank today set the RMB's daily reference rate at a record 7.3046 to the Dollar.

China Eastern Airlines Corp Ltd surged 1.35 RMB to 21.29, and Shanghai Airlines Co Ltd added 0.60 RMB to 17.47.

Zhejiang Supor Cookware Co Ltd rose by the 10% daily trading limit to 49.06 RMB, after French kitchen equipment maker SEB said it will offer a special stock dividend of 10 shares for every 10 held in Zhejiang Supor by public shareholders.

The Shanghai A-share Index fell 49.85 points or 0.89% to 5,521.49 and the Shenzhen A-share Index was down 6.82 points or 0.45% at 1,520.99.

The FTSE/Xinhua China A 50 Index was down 158.67 points at 20.444.89 and the FTSE/Xinhua China A 200 Index was down 92.53 points at 15,070.72.

China B-shares closed slightly lower in the last trading day of the year after a sell-off on Wall Street following the assassination of Pakistan opposition leader Benazir Bhutto.

Telecom stocks were hit by profit-taking. The sector soared Thursdayday after China's cabinet urged regulators to improve their implementation of the third-generation (3G) mobile network rollout.

The Shanghai B-share Index fell 0.93 points or 0.25% to 365.93 on turnover of 514.98  million usd and the Shenzhen B-share Index fell 2.23 points or 0.31% at 709.69 on turnover of 362.57  million $HK.

Eastern Communications Co Ltd declined 0.014 usd to 0.726, after it gained 6.17% yesterday.

Shanghai Erfangji Co Ltd lost 0.012 usd to 0.712.

In Shenzhen, Nanjing Postel Telecommunications Co Ltd fell 0.09 $HK to 4.70, following a 9.61% jump Thursday.

Luthai Textile Co Ltd shed 0.16 $HK to 7.44.

China Vanke Co Ltd fell 0.44 $HK to 20.25.

The FTSE/Xinhua China B 35 Index was down 38.64 points at 11,932.34.

In Taiwan, Taipei's Share prices closed an erratic session higher as position-building more than offset profit-taking after opposition leader Ma Ying-jeou Won another court victory that effectively dispelled worries that he could be prevented from running for president in the March election.

Taiwan's High Court cleared Ma, the Kuomintang candidate, of corruption charges, upholding the ruling of a lower court made in August.

The weighted index closed up 83.23 points or 1.0% at 8,396.95, moving in a range between 8,269.32 and 8,460.18.

Turnover was 114.74  billion $NTD.

The weighted index ended the week with a gain of 455.51 points, or 5.74%.

Risers led decliners 1,335 to 634, with 463 stocks unchanged.

A total of 42 stocks closed limit-up and 45 limit-down.

The heavily weighted financial and electronics sectors were up 1.04% and 0.92%, respectively.

Old-economy industrials reacted even more markedly to the Ma ruling, with the construction sector surging 5.26% and food gaining 3.43%.

The paper sector was up 2.71%, textiles up 1.46%, and plastics/petrochemical up 1.01%.

The cement sector underperformed with a 0.28% fall.

The Taiwan Dollar closed the morning at 32.488/Dollar, compared with the previous close of 32.526.

Highwealth Construction gained 1.85 $NTD or 6.95% to 28.45 and Shihlin Paper added 2.05 $NTD or 6.95% to 31.55. Both were limit-up.

Uni-President was 1.35 $NTD or 3.29% higher at 42.35.

Taiwan Semiconductor Manufacturing, whose share repurchase program runs till Jan 13, was down 1.20 $NTD at 60.50.

MediaTek was up 2.00 $NTD at 402.50 after it decided to fix employee bonuses at 25% of its net profit from 2008.

LCD makers were mostly higher, with AU Optronics up 2.60 $NTD or 4.30% at 63.00 and Chi Mei up 0.65 $NTD or 1.48% at 44.60.

Taishin Financial was down 0.30 $NTD or 2.26% at 13.00 after proposing a 1.3-for-1 share swap with Chang Hwa Bank, which closed up 0.35 $NTD or 2.03% at 17.60.

Evergreen Marine was up 0.40 $NTD at 28.30 on a report that it expects improved profits in 2008 for the container shipping industry as excess capacity becomes less of a problem.

Philippine shares closed Friday, the final trading day of the year, lower as investors cashed in gains from recent sessions ahead of a four-day New Year break.

The pullback followed a four-day rally that was driven mainly by portfolio adjustments by fund managers before the year ends and which brought the benchmark index to two-week highs.

The 30-company composite index fell 46.04 points or 1.3% to 3,621.60. It gained 21.4% in 2007 despite the turbulence in financial markets worldwide over a US housing slump and related credit crunch.

The all-share index was down 26.37 points or 1.2% at 2,216.75.

There were 75 decliners and 44 advancers, while 58 were unchanged.

A total of 2.4 billion shares valued at nearly 4 billion Pesos changed hands.

Philippine markets will be closed on December 31 and New Year's Day. Trading will resume on Wednesday.

Philippine Long Distance Telephone Co (PLDT), the country's biggest company by market value, was down 5 Pesos or 0.2% at 3,175 Pesos, snapping a four-day rise.

Other recent winners also retreated, with property developer Megaworld Corp down 30 centavos or 7.4% at 3.75 Pesos. Ayala Land Inc, the country's biggest real estate company, fell 50 centavos or 3.4% to 14.25 Pesos.

San Miguel Corp's A-shares, restricted to Filipinos, fell 50 centavos or 0.8% to 59 Pesos. Its B shares lost 50 centavos or 0.8% to 59.50 Pesos.

Malaysian shares closed a skittish session higher Friday, with the key index settling in positive territory on last-minute buying of index heavyweights.

But volume was thin, reflecting caution across regional markets about geopolitical risks triggered by the assassination of Pakistan's opposition leader and former prime minister Benazir Bhutto.

The Kuala Lumpur Composite Index (KLCI) closed up 9.22 points or 0.6% at 1,447.04, off a low of 1,431.38. For the week, the KLCI was up 43.48 points or 3.1%.

The FTSE Bursa Malaysia 30-large cap index rose 52.95 points or 0.6% to 9,362.68 but the FTSE Bursa Malaysia was down 8.42 points or 0.1% at 6,686.93.

Decliners led advancers 425 to 416, with 328 stocks unchanged and 185 counters untraded.

Trading volume was 663.2 million shares, valued at 1.29 billion Ringgit.

Sime Darby, the world's largest listed palm oil producer, rose 20 sen or 1.7% to 11.90 Ringgit.

Kuala Lumpur Kepong, which owns oil palm estates in Indonesia and Malaysia, gained 30 sen or 1.8% to 17.30 Ringgit and mid-sized planter Asiatic added 30 sen or 3.6% to 8.60 Ringgit.

On the Malaysian derivatives exchange, CPO futures continued to rise after it hit an intraday high of 3,150 Ringgit per metric ton yesterday. The benchmark contract for March delivery was last at 3,115 Ringgit, up 18 Ringgit.

Bumiputra-Commerce Holdings, which operates CIMB Bank, the second-largest bank in Malaysia, gained 10 sen or 0.9% to 11.00 Ringgit after the company announced that its 64%-owned Indonesian unit Bank Niaga will merge with Bank Lippo, an Indonesian bank owned by Khazanah Nasional, the investment arm of the Malaysian government.

State-owned flag carrier Malaysia Airlines was steady at 4.82 Ringgit. The airline said Thursday it has received a statement of objections from the European Commission for alleged anti-competitive practices in air freight.

Among other index heavyweights, national power company Tenaga was up 5 sen or 0.5% at 9.60 Ringgit, Telekom Malaysia was flat at 11.30 Ringgit and Maybank, the largest bank in Malaysia, was down 10 sen or 0.8% at 11.80 Ringgit.

At the close, the Malaysian Ringgit was quoted at 3.3160/3210 against the US Dollar. Three-month interbank rates were quoted at 3.55/58% and the overnight rates were at 3.47/50.

Indonesian shares closed slightly higher Friday, the last trading day of the year, with the main index recouping its early losses on last minute buying of big caps.

Investors sold shares at the opening after Wall Street fell sharply Thursday in reaction to the assassination of Pakistani opposition leader Benazir Bhutto, which stoked fears the political unrest could spread to the Middle East and disrupt oil supply.

The composite index closed up 6.12 points or 0.2% at 2,745.83.

The LQ45 index was up 0.22 points at 599.82.

Volume was 5.24 billion shares worth 7.22 trillion Rupiah. The heavy volume was largely due to the crossing of more than 2 billion PT Truba Alam shares worth more than 3 trillion Rupiah.

Gainers led decliners 123 to 94, while 52 stocks were unchanged.

The Indonesian Rupiah was trading at 9,400/9,405 to the Dollar against 9,418/9,423 late Thursday.

The market's strong performance was mainly led by energy and resource-based stocks, helped by higher commodity prices.

Today's key gainers included index heavyweight Telkom, which rose 150 Rupiah or 1.5% to 10,150 Rupiah. The stock is lagging behind other big caps.

Palm oil producer Astra Agro gained 250 Rupiah or 1.3% to end the year at a fresh high of 28,000 Rupiah after the strong surge in crude palm oil prices this year. Its parent Astra International rose 500 Rupiah or 1.9% to 27,300 Rupiah.

Bucking the trend, Bank Mandiri fell 25 or 0.7% to 3,500 Rupiah, Bank Central Asia lost 150 or 2.0% to 7,300 Rupiah and Bank Danamon dropped 100 or 1.2% to 8,000.

Coal giant Bumi Resources shed 50 or 0.8% to 6,000 Rupiah.

Singapore shares closed lower Friday after the assassination of Pakistani opposition leader Benazir Bhutto and bleak US economic data triggered a sharp fall on Wall Street overnight.

The Straits Times Index fell 31.38 points or 0.9% to 3,445.82, after trading between a low of 3,441.96 and a high of 3,463.38 points. The index was up 1.4% week-on-week

Trading volume was 1.21 billion shares valued at 1.16 billion Singapore Dollars.

Decliners outnumbered gainers 376 to 325, with 1,034 stocks unchanged.

The Singapore market will trade half-day on Monday and will be closed on Tuesday in observance of the New Year holiday.

Banking shares were lower, with DBS Group down 34 cents at 20.72 Dollars, United Overseas Bank down 6 cents at 19.72 Dollars and Oversea-Chinese Banking Corp 9 cents lower at 8.26 Dollars.

Among blue chips, Singapore Telecommunications added 2 cents to 3.92 Dollars while Singapore Airlines fell 24 cents to 17.10 Dollars, ST Engineering was down 5 cents at 3.70 Dollars and Singapore Press Holdings eased 4 cents to 4.46 Dollars.

Property heavyweights were also lower amid concern that housing demand may soften next year. CapitaLand was down 19 cents at 6.21 Dollars, City Developments shed 16 cents to 13.98 Dollars, Keppel Land retreated 11 cents to 7.28 Dollars and Wing Tai fell 6 cents to 2.70 Dollars.

Thai shares closed higher on Friday led by energy-linked stocks but sentiment was weak throughout the last day of trading.

The Stock Exchange of Thailand (SET) composite index rose 6.04 points or 0.7% to 858.10, while the blue-chip SET-50 index added 3.86 points to 630.73.

Gainers led decliners 216 to 118 on Friday, with 130 stocks unchanged, on turnover of 2.5 billion shares worth 17.4 billion baht.

Energy shares alone account for nearly 30% of the Thai stock market.

Thailand's biggest energy firm PTT rose 4.00 baht to 376.00 and its subsidiary PTT Exploration and Production gained 3.00 to 164.00.

The kingdom's top lender Bangkok Bank was unchanged at 118.00.

Thai Airways International edged up 0.25 to 39.25, but Thailand's biggest mobile phone operator, Advanced Info Service, fell 1.00 to 97.00.

Thai financial markets are closed Monday and Tuesday due to public holidays. Trading will resume on Wednesday.

Indian shares closed marginally lower in the absence of large scale buying by funds, but mid-cap, small-cap and realty space shares enjoyed positive trends.

The Bombay Stock Exchange's 30-share Sensex dipped slightly by 9.77 points or 0.05% to 20,206.95, while the National Stock Exchange's 50-share S&P CNX Nifty fell 0.06% to 6,078.05 points.

On the BSE-30, realty developer DLF was the biggest gainer after it rose 5.31% to 1,063.70 Rupees and Wipro was the main looser after it shed 3.52% at 529.95 Rupees.

Among Nifty shares, shares of the state run aluminium company National Aluminium Co Ltd gained the most as it rose 4.06% to 500.00 Rupees and IT major Wipro was the biggest loser shedding 3.99% at 527.60 Rupees.

Australian shares finished in the red on Friday, the last full trading day for 2007.

The S&P/ASX 200 recovered some earlier losses in the afternoon session to close down 11 points or 0.2% at 6,339.9, its highest point for the day, after trading as low as 6,294.8.

The benchmark index was up 92.9 points or 1.5% for the week, which was reduced to three days because of the Christmas and Boxing Day holidays.

The All Ordinaries was 2.7 points or 0.04% lower at 6,423.7.

The S&P/ASX 200 March futures contract was down 15 points at 6,364.

Volume traded was relatively light, with many dealers extending their Christmas holidays to next week. About 832.9 million shares worth 2.5 billion Australian Dollars changed hands.

Decliners outnumbered gainers 537 to 527 with 361 counters unchanged.

The yield on the 10-year bond fell 0.017percentage point to 6.398% while the 90-day bills rose 0.04percentage point to 7.268%.

Emerging iron ore miner Fortescue Metals Group was the biggest mover in the market, surging as much as 21.5% after splitting each share into 10. Fortescue closed up 1.27 Dollars or 17.6% at 8.47 Dollars.

Fortescue received a query from the Australian Stock Exchange on Thursday in relation to the more than 22% increase in its share price since the share split on December 18. The company said it is not aware of any particular reason for the share price movement.

Gold miners added to recent gains after gold for February delivery rose 2.30 Dollars to 831.80 Dollars an ounce. Newcrest Mining jumped 64 cents or 2% to 32.19 Dollars and Lihir Gold added 4 cents or 1.2% to 3.53 Dollars.

Bhutto's death sparked an increase in the oil price, pushing oil producers Woodside Petroleum up 49 cents or 1% to 50.43 Dollars and Santos up 40 cents or 2.9% to 14.05 Dollars.

Santos also announced that Brantas PSC has successfully defended claims brought against it by the Indonesian Forum for the Environment in relation to a gas exploration well in East Java that began spewing mud in May 2006, inundating villages and farmland. Santos has an 18% non-operating interest in Brantas PSC.

Mining heavyweight BHP Billiton was down 59 cents or 1.4% at 40.51 Dollars and rival Rio Tinto was off 1.41 Dollars or 1% at 134.00 Dollars.

The major banks were mixed, with National Australia Bank finishing 25 cents or 0.7% weaker at 37.79 Dollars and Westpac down 2 cents or 0.1% at 27.89 Dollars.

Commonwealth Bank jumped 36 cents or 0.6% to 58.88 Dollars and Australia & New Zealand Banking Group closed up 12 cents or 0.4% at 27.52 Dollars.

New Zealand shares closed lower in quiet trade Friday, led by market heavyweight Telecom.

The benchmark NZX-50 dropped 32.63 points or 0.8% to 4,036.00 on turnover worth 27.48 million New Zealand Dollars.

Telecom accounted for more than a third of the share value traded, falling 7 cents to 4.37 Dollars.

Other blue chips were mixed. Contact Energy fell 20 cents to 8.25 Dollars, Fletcher Building closed even at 11.33 Dollars and Auckland Airport was 1 cent lower at 2.92 Dollars. Sky TV slipped

6 cents to 4.53 Dollars.

Air New Zealand gained 2 cents to 2.02 Dollars despite having disclosed the previous day that it is one of 25 airlines subject to a European Union investigation into alleged price fixing of air cargo rates and surcharges.

Commodities - Oil prices pushed higher this week as concerns over the health of the US economy were overshadowed by a bullish combination of geopolitical events and falling US stockpiles.

Nymex West Texas Intermediate began a fresh assault on the $100-a-barrel level, hitting a one-month high of $97.79 on Thursday.

The assassination in Pakistan of Benazir Bhutto unleashed a fresh wave of speculative buying as geopolitical tensions in Asia and the Middle East intensified. On Wednesday, Turkey attacked Kurdish targets in northern Iraq, while Russia’s sale of an anti-aircraft missile system to Iran also ruffled some feathers.

Meanwhile, Thursday’s US inventory data revealed a further drop in the country’s crude oil stockpiles below the five-year average.

Since the end of June, US crude oil inventories have fallen by more than 60m barrels, and they are still falling relative to normal seasonal patterns.

By midday in New York on Friday, the US benchmark oil price was up 4.4% over the week to $97.40 a barrel, while Brent crude in London was 3% higher at $95.50 a barrel.

Gold pushed to a month high as investors ploughed into safe havens. And with the Dollar back on the slide – recording its worst week against the Euro in more than a year – most precious metals were well supported.

Spot gold rose to $837.45 a troy ounce, a weekly gain of 3.3%. Platinum hit a record $1,542 an ounce during Thursday’s volatile session, and ended the week 0.9% higher at $1,535.

Base metals got a boost this week after China declared on Wednesday that from January 1 it would scrap import duty on copper and aluminium.

Weak US data, including retail sales numbers and durable goods orders, prompted fears of slowing demand from the world’s biggest consumer and sparked a sell-off towards the end of the week.

But three-month copper on the London Metal Exchange remained 0.6% higher over the week, ending Friday at $6,830 a tonne. Three-month aluminium rose 0.4% to $2,419 a tonne. Wheat prices fell 3.8% to 912¾ cents a bushel this week as profits were taken after driving through $10 a bushel for the first time last week.

Currencies - The Dollar put in its worst performance in more than a year this week as miserable US economic data combined with thin trading conditions to halt the currency’s recent strong run.

Analysts said weaker US housing and durable goods orders figures had helped to cement expectations that the Federal Reserve would cut US interest rates at its January meeting.

Meanwhile, Thursday’s assassination of Benazir Bhutto, the Pakistan opposition leader, prompted a sharp rise in risk aversion, putting further pressure on the Dollar.

Over the week, the Dollar fell 2.4% to $1.4713 against the Euro, lost 2.5% to SFr1.1275 against the Swiss franc and fell 1% to Y113.00 against the Yen.

The Dollar also fell 0.5% to $1.9940 against the Pound on the week.

However, Sterling lost ground elsewhere, falling to a record low against the Euro as further evidence emerged of weakness in the UK housing market.

Figures from Nationwide Building Society on Friday showed UK house prices fell 0.5% in December, following on from an 0.8% drop in November.

Nationwide said the UK housing market had weakened “significantly” in the closing months of 2007, with most indicators now showing demand was responding to past increases in UK interest rates.

Analysts said the rising risk that the UK housing market could be heading for a sharp correction maintained pressure on the Bank of England to cut interest rates again early in 2008.

Over the week, the Pound fell 1.8% to £0.7377 against the Euro, its weakest level since the launch of the single currency in 1999. It fell 1.9% to SFr2.2478 against the Swiss franc and eased 0.4% to Y225.20 against the Yen.

Meanwhile, the RMB advanced as the Chinese authorities appeared to mount a concerted effort to speed up the appreciation of the currency.

The RMB rose 0.9% to Rmb7.3041 against the Dollar on the week, its largest weekly gain since it was de-pegged from the US currency and revalued in July 2005.

Elsewhere, the South African rand climbed 3.3% to R6.7800 against the Dollar over the week, helped by a sharp narrowing in the country’s trade deficit in November.

China - Beijing on Friday approved the launch of China’s first gold futures contracts, with simulated trading on the Shanghai Futures Exchange set to begin on Wednesday.

The exchange is expected to begin selling real RMB-denominated contracts soon after and is preparing for huge demand from the rapidly expanding number of Chinese producers and consumers.

The contracts will help Chinese companies to hedge against fluctuations in the global gold price and allow them to have more influence in setting those prices.

Gold futures trading globally is conducted on a host of exchanges, with the Comex division of the New York Mercantile Exchange and the Tokyo Commodity Exchange the leading venues.

Contracts are also traded in regional centres including Australia, Dubai, South Africa and India. China has witnessed a gold rush in recent years as gold exploration and production processes are modernised and output is ramped up.

The country may even beat Australia, South Africa and the US to become the world’s largest producer of gold this year, according to estimates from the China Gold Association and Australian mining research company Surbiton Associates.

Gold use in jewellery in China jumped 24% from a year earlier to 221 tonnes in the first nine months of 2007, overtaking the US to make China the second largest consumer after India, according to figures from the World Gold Council.

The launch of RMB-denominated gold futures is excellent news for the gold mining industry in China because producers will be able to hedge against their gold production and manage their finances better.

The Shanghai exchange, one of the country’s three commodities futures exchanges, has already set the size of its gold futures contracts at 1,000 grams per lot and established a 5% limit on daily price movements as well as a minimum margin requirement of 7% of the gold contract value.

China’s gold production has risen more than 20 tonnes in each of the past four years and will exceed 260 tonnes in 2007

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China's tax revenues have soared by about 30% this year, state media reported on Wednesday, driven by rapid economic growth, bumper corporate profits, more effective collection and a crackdown on evasion.

Tax revenue growth of this level would be China's highest in more than two decades.

Beijing's bulging coffers mean it enjoys increased fiscal freedom, with preparations already under way to raise the individual income tax threshold and to expand spending aimed at easing the growing wealth gap between urban and rural areas.

Beijing announced on Wednesday a raft of measures to cut duties on imports of commodities and manufactured products, although it also raised some export taxes. Duties to be cut include those on petrol, alumina, coal, cotton and coffee-makers. Those rising cover iron and steel products.

State media quoted Xiao Jie, the new head of the tax administration, as saying that 2007 tax income before export value-added tax rebates was expected to be about Rmb4,900bn ($666bn, €463bn, £337bn), up from Rmb3,763bn last year.

“The tax collection rate has been raised through vigorous reorganisation and standardisation of tax procedures and widening of targeted inspections and punishment,” Xinhua news agency quoted Mr Xiao as saying.

The growth in revenues leaves the government well placed to weather the impact of unifying from January 1 the corporate income tax rate for domestic and foreign-invested companies at 25%.

This will raise the rate for foreign-invested companies but cut that of domestic ones, whose income tax payments climbed to Rmb619bn in the first three quarters of this year from Rmb555bn in all of 2006, according to tax administration data. Stamp tax income also soared this year after the government in May tripled the tax on securities trading to 0.3%. Stamp tax revenues were Rmb162bn for the first nine months of 2007 compared with Rmb38bn for all of 2006.

Legislators are this week reviewing a plan to raise the individual income tax threshold from Rmb1,600 to Rmb2,000 a month. State media has quoted Xie Xuren, finance minister, as saying the increase would cut the tax take by Rmb30bn.

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The shares of Chinese telecoms companies listed in Hong Kong surged yesterday on what the industry's regulator and a government researcher called speculative reports about the long-awaited introduction of 3G mobile services.

While Beijing blamed journalists for misreading its telecoms policy signals, the share moves were a sharp reminder of the notorious lack of transparency surrounding regulators' plans for the world's biggest telecoms market by number of subscribers.

Shares in Chinese operators and equipment companies climbed by up to 7% after a government statement about wireless technology was interpreted as a step towards the start of 3G services.

Officials have for years been engaged in heated but secret debate about when and how to issue 3G licences to China's state-controlled but internationally listed operators, leaving observers desperate to know their intentions.

So the State Council, China's cabinet, attracted attention when it issued an ambiguous statement on Wednesday night saying that it had judged a “new broadband wireless mobile communications network” to be “basically mature and ready for implementation”.

But while some media interpreted the statement as referring to 3G, the Ministry for Information Industry, the regulator, on Thursday said it was actually about development of post-3G wireless data technologies.

Speculation surrounding the State Council announcement followed local reports that a research body under the powerful National Development and Reform Commission had offered “strong support” for the break-up of number two mobile operator China Unicom, with its network to be split between the two leading fixed-line operators.

But a senior researcher with the NDRC's Institute of the Economic System and Management condemned suggestions that the report reflected government intentions or policy.

In the absence of greater policy clarity, however, Chinese telecoms stocks are likely to continue to be vulnerable to speculation.

China Telecom, which is the country's biggest fixed-line operator and seen as likely to benefit most from getting a mobile licence, jumped 6.26% to close at HK$6.28 on Thursday. Smaller fixed-line rival China Netcom rose 3.44% to HK$24.05.

The prospect of stronger competition for dominant wireless operator China Mobile sent its shares down 2.26% to HK$138.6, but Unicom climbed 3.57% to HK$17.98. ZTE, China's second largest telecoms provider, was up 7.02%.

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China's central bank has told the nation's lenders to limit new loans next year to the same level as in 2007 as the government struggles to rein in the economy and slow rising prices, a senior regulator who asked not to be named said on Wednesday, confirming earlier reports by the Financial Times.

As first reported in the Financial Times, the government has decided to limit the amount of new loans for state-owned banks such as Industrial and Commercial Bank of China, China Construction Bank and the Agricultural Bank of China.

These banks were given new loan quotas in 2007 of Rmb365bn, Rmb350bn and Rmb310bn respectively, Reuters reported on Wednesday. The new lending quota for the Bank of China will be slightly lower than the Rmb280bn it was granted in 2007, the regulatory source said.

Some banks have argued that the restrictions are too tight and they will have to carry out major restructuring if they are to maintain their current high levels of profitability.

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A group of insurance companies led by Ping An Insurance, China's second-largest life insurer, will invest more than $2bn in a high-speed railway line connecting Shanghai and Beijing, the company said on Friday.

The consortium of insurers, including Italy's Generali and five other large Chinese firms, will take a stake of nearly 14% in the company established to build the high-speed line. Construction begins next month and is expected to cost Rmb220bn by the time the line is completed in 2013.

The deal marks a diversification in the investment strategy of Chinese insurers into infrastructure projects and comes a year after China Life Insurance, the country's largest insurer, began making large investments in domestic power grids and other infrastructure on a pilot basis.

In the past two years the government has lifted most of the stringent investment restrictions on domestic insurers and has even started to encourage the largest to start looking abroad

Last month, Ping An became the first Chinese insurer to make a large offshore investment when it paid more than $2.6bn for 4.2% of Fortis, becoming the Belgo-Dutch financial group's largest single shareholder.

The other Chinese members of the consortium investing in the high-speed rail line are PICC Property and Casualty, Taikang Life, Tai Ping Life, China Reinsurance, and China Pacific Insurance, which made its debut this week on the Shanghai stock exchange to become the third publicly listed Chinese insurer.

A number of large Chinese banks, including Bank of China, Industrial and Commercial Bank of China, China Construction Bank and China Development Bank were all in discussions to invest in the Shanghai-Beijing rail line, according to earlier Chinese media reports, but none of them appear to be included in the project.

The 1,318km high-speed railway will be the world's longest, according to Ping An, and will allow trains to travel up to 350 km per hour between the country's two largest cities, halving travel time from the current 10 hours.