US Markets - Wall Street registered slight declines Friday as Wall Street finished the third quarter on a cautious note.

The Dow Jones industrial average fell 17.31, or 0.12%, to 13,895.63. The Standard & Poor's 500 index lost 4.63, or 0.30%, to 1,526.75. The Nasdaq composite index declined 8.09, or 0.30%, to 2,701.50.

For the week: The Dow is up 66.44, or 0.48%. The S&P is up 1.00, or 0.07%. The Nasdaq is up 30.28, or 1.13%.

For the quarter: The Dow is up 487.01, or 3.63%. The S&P is up 23.40, or 1.56%. The Nasdaq is up 98.27, or 3.77%.

US stocks dropped slightly Friday, paring the biggest September advance since 1998, on concern that credit- market losses may worsen after a private group said more Americans are missing mortgage payments.

Wells Fargo & Co., the second-largest US home lender, and Washington Mutual Inc., the country's biggest thrift, helped lead bank shares lower for the sixth time in seven days. UnitedHealth Group Inc. and Humana Inc. declined on expectations they may lose Medicare customers because prices in some areas are too high to be reimbursed by the government.

The Mortgage Insurance Companies of America said defaults on privately insured home loans climbed 30% last month from year-earlier levels, adding to evidence that home foreclosures may continue to rise. Insured borrowers more than 60 days behind on their payments rose to 58,441 in August, Mortgage Insurance Companies of America said.

Wells Fargo dropped 40 cents to $35.62. Washington Mutual fell 56 cents to $35.31. MGIC Investment Corp., the largest US mortgage insurer, lost 36 cents to $32.31.

UnitedHealth Group declined 83 cents to $48.43, its lowest since Aug. 10. Humana fell $1.25 to $69.88. The two largest providers of Medicare drug plans for the elderly together may lose more than 1 million low-income enrollees next year.

Stocks fell to their lows of the day after Fed Bank of St. Louis President William Poole said markets shouldn't ``bake into the cake'' the prospect of more rate cuts. He said he sees initial signs that credit-market turmoil is easing and the US economy is likely to grow at a ``moderate'' pace in the next few years.

Financial shares also dropped after the rate that banks charge each other for overnight loans in Pounds rose 20 basis points to 6%, the highest in 10 days, British Bankers' Association figures showed. The corresponding Libor rate for Dollars rose 21 basis points to 5.30%. One basis point is 0.01%age point.

Federal funds, the US overnight interbank lending rate, traded at 5.25%, above the central bank's target rate of 4.75%, according to ICAP Plc, the world's largest interdealer broker.

Northern Rock Plc fell in London trading on speculation that it accounted for most of the 7.75 billion-Pound ($15.7 billion) increase in loans granted by the Bank of England to financial companies in the past two weeks. The U.K. lender sought emergency funds after rising financing costs hampered its ability to extend new mortgages.

Financial stocks in the S&P 500 decreased 0.4% as a group and contributed the most to the broader index's decline. The S&P 500 Financials Index has dropped 6.8% this year for the steepest decline among 10 industries.

Almost two stocks declined for every one that rose on the New York Stock Exchange. Some 1.3 billion shares changed hands on the Big Board, 19% less than the three-month daily average.

3Com Corp. surged $1.26, or 34%, to $4.94. The maker of computer-networking equipment that has been losing money since 2000 agreed to a $2.2 billion takeover bid from Bain Capital LLC and a former Chinese partner. Bain said it will pay $5.30 a share, 44% more than yesterday's closing price.

General Motors Corp. climbed 24 cents to $36.70. The biggest US automaker's new contract with the United Auto Workers was unanimously approved by a panel of union officers, clearing the way for a ratification vote by rank-and-file members.

Target Corp. rallied $1.87 to $63.57. Merrill Lynch & Co. said investors should buy shares of the second-largest US discount chain because it may sell its $7 billion credit-card portfolio and buy back more of its own stock.

The Russell 2000 Index, a benchmark for companies with a median market value of $647 million, dropped 1.1% to 805.45. The Dow Jones Wilshire 5000 Index, the broadest measure of US shares, lost 0.3% to 15,362.02. Based on its decline, the value of stocks decreased by $61.6 billion.

European Markets - Europe's leading exchanges ended slightly lower, wrapping up a third quarter where stocks pulled back as the crisis in the credit markets weighed on financial stocks, but solid gains in the commodity sector helped put a floor under declines.

The Dow Jones STOXX 50 fell 2.07 points or 0.1% to an unofficial close of 3,820.33, while the STOXX 600 came off just 0.10 point, or 0.03% to 377.86.

Europe has if anything done worse, or certainly no better than the US in a quarter where the main problem was a US-centric one - namely subprime coming home to roost. And whenever there is something to worry about the European market gets more rattled than Wall Street at the moment it seems; it's not as deep a market.

In the third quarter, the STOXX 50 fell 3.2% while the STOXX 600 Index dropped 4%.

In the third quarter, the Dow Jones 600 Banks Index fell about 10%. In contrast, the DJ 600 Basic Resources Index rose over 7%. The oil and gas sector dropped in line with the broader market, with the DJ 600 Oil and Gas Index falling about 4%.

Let's start this week in Europe in France where Paris Share prices closed lower as investors claimed profits in the wake of disappointing French economic data and a morning drop on Wall Street, where soaring oil prices and a plummeting Dollar weighed on sentiment.

The CAC-40 index finished down 17.68 points or 0.31% at 5,715.69.

Among CAC-40 stocks, 18 closed higher and 22 closed lower. On the Matif, October CAC-40 futures were trading at 5,712.

On the broader indices, the SBF-80 index closed down 0.38 or 0.01% at 6,709.18 while the SBF-120 ended 11.09 or 0.27% lower at 4,155.26.

Data showed consumer confidence dropped sharply in September, and confirmed a slowdown in second quarter GDP to a sluggish 0.3% quarter-on-quarter rise.

BNP Paribas analysts said household confidence had collapsed in France, adding 'this is very bad news for consumer spending in coming months.'

After a two-day rally on the CAC-40, the negative macro signals prompted widespread profit-taking from investors.

Banks were among falling stocks as uncertainties persist over the impact of the current credit turmoil.

Societe Generale fell 2.48 Eur or 2.06% to 117.68, Credit Agricole shed 0.20 or 0.73% to 27.05, while Dexia slipped 0.12 or 0.56% to 21.26.

BNP Paribas fared better, rising 0.43 or 0.56% to 76.74, after the bank's CEO said yesterday there would be no negative surprises in third-quarter corporate and investment banking earnings.

The big faller on the CAC-40 was Alstom, which gave up some of its recent speculation-fuelled gains after Les Echos reported that government-commissioned studies had cast doubt over the merger with Areva.

Alstom ended down 6.08 or 4.09% at 142.57, while Areva dropped 20.65 or 2.83% to 709.35. Bouygues, which is reportedly part of the government's plans to merge Areva with Alstom, fell by 0.70 or 1.14% to 60.49.

According to Les Echos, a study conducted by McKinsey said the deal would not generate direct synergies, while a separate study by HSBC found a tie-up would be difficult to put into action due to the lack of a precise value for Areva.

Separately, SG Securities questioned the value of a merger deal for Alstom, downgrading the stock to 'hold' from 'buy'.

Elsewhere, Danone extended yesterday's losses, falling 0.80 or 1.43% to 55.20. The group has been hit by a series of downgrades this week, as analysts question its short-term prospects given rising milk costs and a higher cost of financing for the Numico acquisition.

On the upside, Alcatel-Lucent regained some of its recent losses amid speculation that Patricia Russo has been issued an ultimatum by her board.

The Financial Times reported Russo had been given one month to submit an emergency turnaround plan in the wake of the latest profit warning, which was widely interpreted as a sign she could be forced to step down.

The shares ended up 0.30 or 4.35% at 7.20.

EADS climbed 0.49 or 2.33% to 21.56, helped by an upgrade to '2 Outperform' from '3 Underperform' at CA Chevreux.

The broker also raised its target price to 30 Eur from 17 Eur, citing 'a better pricing environment, (the) first take-off of two major programmes, A380 and A350, lower R&D costs and a better cash-flow profile.'

The weak Dollar is a real issue but can be addressed efficiently, the broker said in a note to clients.

Outside the CAC-40, Atos Origin soared at the end of the session after the IT services firm announced it is in exploratory talks with Engineering Ingegneria Informatica SpA over a deal to exchange its Italian operations for a minority stake in the Italian group, as well as to set up a wider global alliance.

Atos shares closed up 1.09 or 2.74% at 40.80, after climbing as high as 41.41 after the announcement.

Atos has been under pressure from investment fund Centaurus, which has just under 10% of the French group, to consider a takeover after talks earlier in the year with unnamed parties failed to produce a deal.

Back on the CAC-40, Lagardere SCA added 0.61 or 1.03% to 59.69. Le Monde reported, citing unnamed sources, that the group has set a deadline of October 6 for offers to acquire its network of Virgin stores in France, with PPR unit Fnac and investment fund Butler Capital both potential bidders.

In Frankfurt, German shares closed higher led by TUI, while positive investor sentiment lifted the prices of some technology and financial stocks. The DAX ended up 7.71 points or 0.10% at 7,861.51 after trading in the 7,790.23-7,880.42 band.

The MDAX was down 63.41 points or 0.61% at 10,334.74, while the TecDAX added 5.77 points or 0.60% at 966.06.

DAX futures were down 3.50 points or 0.04% at 7,994.50. Bund futures advanced 0.25 or 0.22% to 112.68.

Dealers said TUI, up 0.76 Eur or 4.20% at 18.84, benefited from a Handelsblatt newspaper report that said US financial investor Guy Wyser-Pratte has acquired a 1% stake in the company.

Infineon, up 0.32 or 2.72% at 12.09, was the second best performer. Other tech stocks were higher, with SAP adding 0.31 or 0.76% at 41.05 and Siemens gaining 0.19 or 0.20% at 96.42.

Financials were all in positive territory, led by Hypo Real Estate, up 0.68 or 1.73% at 39.88.

Bucking the trend was Merck KgaA, which ended down 5.40 or 6.00% at 84.60. Deutsche Bank downgraded its stance to 'hold' from 'buy' and reduced its target price to 91 Eur from 96 as it believes market expectations for Merck's LCD operations are too high, although there may be some upside potential in its pharma divisions.

Automotive stocks were mostly lower, with truck maker MAN leading the sector with a loss of 2.06 or 1.98% at 102.05. BMW followed suit with a loss of 0.75 or 1.63% at 45.23.

UBS downgraded its stance on BMW to 'neutral' from 'buy' and lowered its price target to 50 Eur per share from 55, saying the car maker's plans to boost margins and sales volumes are convincing but the results won't be seen for quite some time.

Among the MDAX stocks, Patrizia Immobilien led advancers with a gain of 0.53 or 5.19% at 10.74.

Celesio was the biggest loser, losing 4.04 or 8.36% at 44.26 after the company said it is no longer expecting to achieve double-digit growth in pretax profit for the years until the end of 2010 due to 'unexpected drastic measures' taken by the UK Department of Health.

Stada Arzneimittel ended 0.23 down or 0.50% at 45.73. It said it will restructure the sales and marketing business of its German generics, including cutting 230 sales jobs, and will book a 29  million Eur one-off restructuring cost, mostly in the third quarter. On the TecDAX, Freenet, up 1.05 or 5.80% at 19.15, was the top performer.

Financial Times Deutschland said in a prerelease of tomorrow's edition, citing sources, that Drillisch and United Internet have started to look into the books of Freenet with a view to acquiring some of its businesses.

United Internet was up 0.54 or 3.54% at 15.79. Bear Stearns initiated coverage of the company with a 'outperform' rating and a price target of 18.5 Eur per share. QSC lost 0.17 or 4.37% at 3.72.

Into The Netherlands now where Shares closed lower in Amsterdam, tracking negative trends on Wall Street while Hagemeyer surged on renewed M&A speculation, according to market sources.

The AEX closed 1.26 points or 0.23% lower at 540.98 after opening at 542.14 and trading in a range of 537.72-542.75.

TomTom was 2.68% weaker at 54.51 Eur while Unilever shed 1.90% at 21.65.

Fortis closed 1.85% lower at 20.65 amid news that it has sold its 4% stake in Banco Comercial Portugues, while the consortium it shares with the Royal Bank of Scotland and Banco Santander in bidding for ABN Amro made news by saying it reserves the right lower the minimum acceptance threshold for its offer below the current 80%.

Among Fortis' financial peers, ING was up 0.29% at 31.13 Eur, Aegon was 0.15% lower at 13.43 and takeover target ABN Amro was on the rise, gaining 0.14% at 36.95.

Corporate Express lost 1.42% at 7.64 while Ahold closed 0.84% lower at 10.60, unmoved by a price target upgrade to 11.5 Eur from 11.0 at KBC. The supermarket group was also in the news because its Schuitema unit announced the appointment Theo Janssen as its financial director.

KPN, which was upgraded to 'add' from 'hold' at Petercam and reiterated at 'buy' at ING this morning while both brokerages said Deutsche Telekom's acquisition of Orange Netherlands could lead to a reduction in competitive intensity in the Dutch mobile market, closed 0.57% lower at 12.17.

Lead blue-chip gainer Hagemeyer closed 12.50% higher at 3.24 Eur after soaring throughout the afternoon on speculation of a potential takeover, with traders mentioning Rexel as a potential predator. An ING analyst said he was sceptical and Hagemeyer itself declined to comment.

ASML closed 1.53% higher at 23.25 ahead of its impending reverse stock split while its midcap semiconductor sector peer ASMI closed 0.60% lower at 20.01.

TNT ended the day 1.03% higher at 29.40 after starting it with a price target downgrade at Petercam, while Heineken was 0.94% firmer at 46.02 and Philips, which held a conference yesterday in which it said its lighting division expects to continue its current growth path, added 0.92% at 31.68.

CSM led midcap decliners, losing 2.97% at 14.74 while Oce slipped 2.96% to 14.74, Van der Moolen lost 1.86% at 3.17 and Wessanen was down 1.81% at 10.33.

Among other decliners in the news, Stork closed 1.06% lower at 45.70 Eur amid reports that a former politician is acting as negotiator for a state-run Chinese company for a possible takeover of Stork's Aerospace division. Stork confirmed that the company was approached, but said the proposal was dismissed.

Biotechnology group Crucell led gainers, closing 2.49% higher at 14.41 after announcing that it has discovered antibodies to treat and prevent the H5N1 avian flu virus.

Heijmans climbed 2.05% at 32.39 while construction peer BAM closed 0.86% stronger at 18.69 after announcing that a consortium it is part of has won a rail contract in Belgium worth over 300  million Eur, half of which is for BAM.

Ordina was 1.33% firmer at 12.98 while its IT peer Getronics was flat at 6.20 Eur.

Standing out among local issues, Spyker closed 7.46% lower at 3.35 after underperforming throughout the day mid reports that Friesland Bank is demanding that the struggling Dutch car maker prioritise the repayment of its 5  million Eur loan.

Smallcap financial Van Lanschot outperformed and closed 1.09% higher at 72.50. Earlier, the share was upgraded to 'hold' from 'reduce' at Rabo Securities.

Next door in Belgium Brussels Shares closed marginally lower, pulled down by bancassurer Fortis which said shortly before market close that it had sold its stake in Portugal's BCP to help fund the consortium's proposed buy of ABN Amro NV.

The Bel 20 was off 1.07 points or 0.02% at 4,326.36.

Fortis closed down 0.39 Eur or 1.85% at 20.65. The bancassurer said it has sold its remaining 144  million shares in Portugal's Banco Comercial Portugues SA to international investors, but did not give a price for the stake.

Earlier, the share was upped to 'buy' from 'hold' at Theodoor Glissen.

The RBS-led consortium said its offer for ABN Amro will remain open until 3 pm CET on Oct 5, unless the offer period is extended.

Peer Dexia closed down 0.14 Eur or 0.65% at 21.24.

Supermarket Delhaize lost 1.20 Eur or 1.75% to 67.20, whilst metals group Umicore dropped 2.38 Eur or 1.40% to 167.60.

In positive territory, Belgacom added 0.54 Eur or 1.69% to 32.54, whilst Mobistar rose 0.38 Eur or 0.62% to 61.35.

The Belgian telecoms regulator BIPT's unexpected decision to suspend its 2008-2009 transition mechanism (glide-path) to reduce mobile termination rates (MTRs) appears to be good news for Belgacom SA rivals Mobistar and KPN NV's Base, analysts said.

KBC rose 0.31 Eur or 0.32% at 96.48. The bank acquired a 75% stake in Bulgaria's EIBank for 295  million Eur. This complements the bank's 85% of Bulgaria's DZI Insurance; it said earlier this month it intends to buy the remaining 15%.

Agfa-Gevaert was up 0.16 Eur or 1.20% at 13.50; it was upgraded to 'hold' from 'sell' at ING, where the target price was cut to 13.5 Eur from 14.0. BlackRock Group sells 3.1% stake.

Outside the Bel 20, Mitiska SA fell 0.05 Eur or 0.44% to 11.35. Bank Degroof has downgraded its rating on the Belgian investment group to 'accumulate' from 'buy' on a lower share price to net asset value (NAV) discount following last night's first-half results.

KBC Securities analyst Nathalie Sierens maintained her 'buy' rating and upped her target price to 12.50 Eur from 11.00, saying in a note to clients that the target price upgrade was 'entirely driven by the higher value attributed to (Mitiska unit) AS Adventure,' which saw sales up 23% and recurring EBITDA up 26%.

Across in Switzerland Zurich's Swiss shares closed higher with gains in the blue-chip banking sector offsetting negative sentiment from Wall Street, which turned lower on mixed US economic data.

The Swiss Market Index closed 47.53 points higher at 8,933.48 and the Swiss Performance Index closed 42.91 points up at 7,262.53.

The Euro rose to 1.6608 SFr and the Dollar was lower at 1.1670 SFr.

Although the Swiss market is still sensitive to economic developments in the US, the Swiss banking sector helped the index to sustain gains, said a Zuercher Kantonalbank trader.

UBS rose 0.45 SFr at close at 62.60, and Credit Suisse rose 0.50 SFr to close at 77.30. Julius Baer was off earlier lows, rising 0.80 SFr to close at 87.05.

The market's gainers also included fellow heavyweight Nestle, up 4 SFr to close at 523.

Pharmaceuticals were mixed, with Novartis adding 0.25 SFr to close at 64.25 after its diabetes drug Galvus gained EU approval, with analysts welcoming the news.

Rival Roche was unchanged, closing at 211.10.

Amongst the market's underperformers were Nobel Biocare, down 1.75 SFr to close at 315.25, extending yesterday's losses amid some uncertainty over the dental implant maker's US growth prospects.

Adecco fell 0.50 SFr to close at 68.85. Earlier, the employment group said it will enter the watch industry market to capitalise on strong staff demand.

Outside the SMI, Lonza rose 1.1%, or 1.40 SFr to close at 127.00 after the market welcomed news that the group's 2007 performance will top its guidance.

Bank Vontobel described Lonza management's comments on current business developments and the company's mid-term potential as 'reassuring'.

Santhera rose 1 SFr to close at 108 after it said that the US Food and Drug Administration (FDA) has granted a fast-track designation to its comPound SNT-MC17 (idebenone) for the treatment of Friedreich's Ataxia (FRDA).

Neighbours Austria saw Vienna shares close lower, with a further decline by oil and gas conglomerate OMV, as well as sentiment-related losses by fellow index heavyweights Raiffeisen International and Erste Bank, weighing on Vienna's indices.

The ATX closed down 0.41% or 18.59 points at 4,527.30. The ATX Prime closed down 0.89% or 19.61 points at 2,186.02.

OMV closed lower for a fourth consecutive day, shedding 1.10% to 46.83 Eur as the market's negative reaction to its pursuit of MOL continued. Hungary's Financial Supervisory Authority yesterday said it has fined OMV 100,000 Eur for 'misleading MOL's shareholders' in relation to its indicative offer of 32,000 forints per MOL share.

Fellow index heavyweights Raiffeisen International and Erste Bank also ended trading lower, slipping 0.49% to 102.50 Eur and 0.39% to 53.45 Eur, respectively, on the generally more negative sentiment for Europe's financial stocks yesterday.

Analysts at Sal. Oppenheim yesterday reiterated their are duce' rating and target price of 94.00 Eur for Raiffeisen.

Industrial share RHI posted the sharpest loss for the day, slumping 3.15% to 32.28 Eur.

BWIN shares declined 2.91% to 16.70 Eur as the online gaming provider took part in the downward trend among its European peers.

Austrian Airlines shares lost 2.20% to 7.10 Eur as the carrier announced it will raise its fuel surcharges as of October 1 to reflect higher kerosene prices.

Further decliners in the ATX included Mayr-Melnhof Karton, 2.64% lower at 77.50 Eur, Flughafen Wien, whose shares dipped 2.11% to 72.44 Eur, and Schoeller-Bleckmann Oilfield, which ended its first week in the index by dipping 1.84% to 59.70 Eur.

Intercell reversed solid gains earlier in the session to close down 0.51% to 25.27 Eur, as the vaccine specialist company announced Novartis holds 15.9% of its voting rights following the completion of a capital increase of 4.8  million shares.

Wienerberger led gainers on the ATX, rising 0.83% to 43.86, on news construction spending in the US in August had risen 0.2%, beating forecasts of a decline.

Shares in A-TEC Industries closed trading up 0.56% to 133.90 Eur. Russian oligarch Victor Wechselberg yesterday denied reports of possible co-operation between him and majority shareholder Mirko Kovats with regard to A-TEC's stake in Norddeutsche Affinerie.

Wiener Staedtische shares rose 0.51% to 49.00 Eur as reports suggested the insurance conglomerate has joined in the bidding for Ukraine's USG.

On the ATX Prime, Immoeast shares slumped 4.14% to 7.64 on reports that Morgan Stanley had cut its target price to 7.40 Eur from 9.10 Eur while reiterating its 'underweight' rating.

Fellow property stock CA Immobilien Anlagen declined 2.00% to 18.59 Eur, as yesterday's cooler investor sentiment for the sector outweighed reports that Sal. Oppenheim has initiated its coverage of the share with a 'buy' rating and target price of 20.50 Eur.

Shares in Bene dropped 3.45% to 5.31 Eur on the back of the office furniture producer's half-year results, which came in below expectations and led Sal. Oppenheim to announce that it is likely to review both its target price and rating for the stock.

Into Scandinavia now and starting in Sweden where Stockholm shares closed slightly higher, with 200-year old Nordic investment bank Carnegie soaring after the regulator demanded the dismissal of its chief executive, chairman and much of its board.

The OMX Stockholm index closed up 0.45% at 391.79, while the OMX Stockholm 30 index closed up 0.35% at 1,221.54. Turnover was 28.33  billion SKr.

The main sub-indices movers today were: telecommunication services up 1.51%, retailing up 1.67%, and materials up 0.62%. The major movers within these indices were: TeliaSonera up 1.75% at 58, Hennes & Mauritz B up 1.25% at 319, and SSAB A, down 3.26% at 237.50.

Carnegie closed up 11.09% at 135.25, after its chief executive, Stig Vilhelmson, resigned in the wake of a damming report by the Swedish regulator Finansinspektionen (FI), which fined the bank 50  million SKr, and demanded it replace its chief executive, chairman and members of its board following a trading scandal.

FI said it came close to revoking Carnegie's licence but settled on a warning and the fine after the bank presented an action plan for change.

The FI judgement follows Carnegie's admission that three traders exaggerated trading gains during the period 2005-7, resulting in the bank overstating profits by 227  million kronor.

Carnegie's share price has fallen sharply since the overstated profits scandal broke earlier this year.

Securitas B closed up 0.30% at 84.50. The company said its Loomis unit will appeal a decision by the Stockholm County Administrative Court to suspend its licence to operate cash handling services in Sweden from March 1, 2008.

The courts ruling is based on concerns over the training of staff and their safety in the wake of a series of robberies.

Scania B closed down 0.63% at 157. Volkswagen has been given an exemption by the Swedish Securities Council to acquire more than 49.99% in Scania without having to make a bid for the company.

VW was previously allowed to acquire up to a 49.99% voting stake in Scania without being obliged to make a bid.

VW currently holds a 20% capital stake and a 36.4% voting stake in Scania.

In Copenhagen neighbours Denmark saw their Share prices close lower, led down by Danisco on profit taking and a cut target price, and by Novozymes and FLSmidth, brokers said.

The OMXC20 index closed 2.07 points lower at 499.93 and the OMXCB Benchmark index fell 2.50 points to 475.30.

The OMXC All Share index closed 1.83 points lower at 485.83 on turnover of 4.63  billion DKr.

Danisco closed 11 DKr lower at 406.5 on profit taking following gains yesterday and after sugar peer Tate & Lyle warned that rising corn prices and the weak Dollar will weigh on profitability in its sugar division.

In addition, ABN Amro cut its target price for the group to 450 DKr from 470 DKr but kept its 'hold' rating, while Danske Equities repeated both its 'hold' stance and 420 DKr target following the EU sugar reform.

Novozymes shed 9 to 657, while Carlsberg B added 6 to 714.

FLSmidth was 13 lower at 556 on profit taking after rising to record levels in each of the past six sessions.

Bavarian Nordic was up 15.5 at 448 after the stock was initiated at Jyske Bank with a 'buy' recommendation and a target price of 649 DKr. The broker sees the company's pipeline potential as not yet reflected in its current share price.

Coloplast fell 4 to 497. The group now holds 8.3% of its total share capital after buying shares for 500  million DKr in the second part of a share buyback programme announced in March, ending that programme.

Novo Nordisk B was 5 lower at 631 and Lundbeck shed 2.5 to 142.

Nordea Bank was 1.5 higher at 91, extending recent gains on reports of SEB placing a bid for shares in the bank.

Danske Bank rose 0.25 to 212.25, while Topdanmark fell 6 to 860 and TrygVesta was down 1.5 at 419.

Elsewhere, Vestas Wind Systems shed 8 to 413, William Demant Holding was down 13.5 at 462 and GN Store Nord fell 0.5 to 53, while AP Moller-Maersk A added 300 to 71,000 and the B-shares were up 100 at 71,5800.

Into Norway now where Oslo Share prices closed higher, led up by Pertra and Revus Energy following an oil discovery in the North Sea, brokers said.

The OSEBX Benchmark index closed 1.46 points higher at 496.29 and the OSEAX All Share index added 2.31 points to 575.15.

Total turnover amounted to 17.85  billion NKr.

Pertra closed 7 NKr higher at 80. The group announced an oil discovery in its wildcat well in the North Sea, located between the Sleipner Ost and Varg fields. Pertra owns 45% of the licence for the field.

Revus Energy, which has 20% of the licence, added 1.75 to 69.5.

Norsk Hydro rose 3.25 to 234.5 and Statoil was up 1.75 at 183.75. Sanford Bernstein repeated its 'outperform' rating on Norsk Hydro, while Credit Suisse said it was worth a buy as an aluminium producer.

Bernstein noted that Norsk Hydro merges its oil and gas interests with Statoil from Oct 1 - the new oil and gas entity to be called StatoilHydro - from which date Norsk Hydro itself continues as a pure aluminium producer.

Bernstein said the restructuring leaves Hydro well positioned for a late-cycle aluminium price rebound.

Credit Suisse, meanwhile, repeated its 'neutral' stance with a target price of 210 NKr on Norsk Hydro, but recommended it could be bought as a pure aluminium play after the de-merger on Monday.

Acergy shed 1.75 to 160.25. The group was awarded a contract valued at about 58  million usd by Norsk Hydro on behalf of the Ormen Lange licences, but dealers said a second broker downgrade in two days outweighed this news.

Danske Markets downgraded the stock to 'reduce' from 'hold'. Yesterday, the share fell after Pareto cut its stance on the stock to 'hold' from 'buy' following better performance than its peers.

TGS-Nopec Geophysical fell 3 to 110.5. ABN Amro initiated coverage of the stock at 'buy'. The broker expects a strong period from the second half of 2007 through to the end of 2009, driven by good prospects for lease sales and significant synergy benefits from the proposed merger with Wavefield Inseis, which shed 0.75 to 56.

Petroleum Geo-Services was 0.5 lower at 155.5, while Seadrill added 0.5 to 121.25.

Golden Ocean fell 0.05 to 36.15, while Jinhui Shipping was up 2.75 at 76.75 on new rises for bulk transport rates, which lifted the Baltic Dry Index to yet another record today.

Norske Skog was down 1.3 at 57.7. The group will cut costs and improve profitability by cutting its European newsprint production by 200,000 tonnes in 2008.

The plan for 2008 'will be very important in our efforts to increase Norske Skog's profitability,' said chief executive Christian Rynning-Toennesen.

The stock fell yesterday after UBS cut its target price to 65 NKr from 85 in a Paper & Packaging review, according to dealers. UBS repeated its 'neutral' stance and expects lower newsprint prices.

Yara International shed 1.75 to 170.5.

Aker added 3 to 381 after DnB NOR Markets raised its target price on the stock to 410 NKr a share from 390, on a reiterated 'buy' stance, as the broker revised its valuation of the stock.

Kongsberg Automotive shed 0.8 to 36.2. The auto parts maker is to start talks with trade unions to close its Aamotfors plant in Sweden, which has 90 staff, and shift the production to Poland, the company said on Friday. The company must cut costs because of continuing pressure on margins in the European car industry and production is seen as cheaper in Poland.

Odim was unchanged at 72.75. The group won an offshore supply vessel equipment order, worth some 24  million NKr, to deliver its Odim WBRS work boat reception system to two stand-by vessels under construction for Danish shipowner Esvagt.

Q-Free rose 0.2 to 14.8. Yesterday, the electronic toll collection system supplier won a contract worth 80  million NKr in Thailand.

DnB NOR Markets, which has a 'buy' and a 16 NKr target price on the stock, said the long-awaited order gives better visibility in relation to the broker's 2008 estimates for the company.

'The work starts in October this year and will continue for 16 months, with income being booked on an ongoing basis,' the broker said.

Aker Kvaerner was up 1 at 171.75, while Aker Yards shed 0.5 to 63.5 and Tomra Systems fell 1.8 to 39.

Schibsted was unchanged at 284. The group bought 35% of Metronome Film & Television from Endemol Finance for 145  million SKr and now owns all of Metronome, the biggest independent Nordic TV and film production house.

Metronome posted sales of 1.1  billion SKr in 2006 and an operating profit of 22  million SKr.

Orkla fell 1.4 to 96.3.

Elsewhere, Telenor rose 1.75 to 108 and DnB NOR added 1.2 to 82.7, while Storebrand shed 0.3 to 83.8 and Renewable Energy Corporation was 9.5 lower at 248.5.

And rounding out the Nordic arena we go to Finland where Helsinki shares closed little changed, with gains in a selected group of key stocks, including big banks, offsetting losses in another group of blue-chips led by Nokia.

The OMX Helsinki 25 ended up 0.02% at 3,323.68, while the OMX Helsinki closed 0.12% lower at 12,290.15. Volume was 1.365  billion Eur.

Nordea, the top blue chip gainer yesterday on M&A speculation, closed up 1.58% at 12.21 Eur. OKO added 0.49% to 14.50 Eur.

Engineering stocks closed lower on profit-taking. Wartsila B finished down 2.14% to 48.05 Eur, Konecranes 2.08% lower at 28.21 Eur, and Metso 0.84% lower at 48.30 Eur.

Metso said it will book a small gain in its third-quarter on the divestment of its German press and energy business, which it finalised today, but did not reveal the value of the transaction.

Nokia closed down 0.26% at 26.66 Eur.

Nokia Siemens Networks said it has won a 61.5  million Eur 3G network expansion and services contract from Taiwan's Chunghwa Telecom. In forestry, Stora Enso R was up 0.81% at 13.66 Eur.

The company said its third-quarter operating earnings will get a one-time 10  million Eur boost from the sale of land and property in Germany to a unit of SEGRO, the UK-based industrial park developer.

The site in Reisholz is currently home to two paper production machines, which are to be scrapped following their closure by the end of the year. Sector peer UPM-Kymmene ended 0.36% firmer at 16.96 Eur.

Elsewhere, Kesko B finished 2.10% lighter at 46.59 Eur.

The group said its international technical trading unit Kauko-Telko has bought Finland's OptiKem Ltd to strengthen its paper and pulp chemicals business, but gave no financial details.

Down into The Med' now and starting in Athens where Greek Shares ended slightly higher, consolidating the market's recent sharp advance, as gains for Public Power Corp (PPC) and Hellenic Telecoms (OTE) more than offset losses for Greek Postal Savings Bbank (GPSB) and EFG Eurobank.

The ASE general index closed 0.4% higher at 5,123.3, and blue chips closed little changed at 2,702.1.

Mid caps ended up 1% at 6,604.4, and small caps finished 0.6% higher at 1,124.4.

Decliners outnumbered advancers, 134 to 117, with 77 unchanged in heavy volume of about 600  million Eur

Electricity utility PPC jumped 5% to end at 27.8 Eur after broker Merrill Lynch lifted its target price by 5 Eur to 27 Eur saying it was on the right road and there may be tariff reform since the conservative government was re-elected.

Telecom incumbent OTE closed up 2% to 26 Eur in heavy trade after its second largest shareholder Marfin Investment Group said that it was a long term strategic investor in OTE and wants a seat on the board.

GPSB dipped 1.9% to finish at 15.4 Eur on reports that the Greek state will be looking for a foreign European strategic investor and will not be selling down its 44 stake in the near term since it is focusing on the bank's transformation and restructuring.

EFG Eurobank closed down 1.6% to 24.66 Eur and mobile operator Marfin Popular Bank ended down 1.2% to 9.6 Eur, both on profit taking.

Bottler Coca-Cola HBC finished up 3% to 40.5 Eur continuing its positive trend on bullish technicals to a new historic high. The stock has risen 49% over the last 52 weeks mainly as a result of late in the session buying from foreign institutionals.

Mid cap pharmaceutical company Alapis rose 2.3% to end at 2.2 Eur on sources saying it is eyeing acquiring 100% of Romanian company Labormed for between 80 to 100  million Eur.

In Madrid Spanish shares closed flat on the last trading day of the quarter as Wall Street pared earlier losses, with heavyweights such as Telefonica and main banks a mixed bag, while Mapfre outperformed after Cheuvreux selected the stock as a top pick.

The IBEX-35 index ended off 5.10 points at 14,576.50, after trading in a range of 14,460-14,618.

Heavyweights were mixed, with Telefonica gaining 0.07 Eur to 19.63, while main banks suffered as Santander lost 0.05 to 13.63 and BBVA gave up 0.04 to 16.44.

Earlier, local newspaper rumour columns cited fresh speculation Santander may launch a bid for BBVA, while a separate column reported an expected 4  billion Eur capital hike by Santander may be cut to 2.5  billion.

Outperforming the broad market, Mapfre climbed 0.14 or 4.62% to 3.17 after Cheuvreux added the stock to its sector top picks list with a 4.8 Eur price target.

Selected builders continued to rebound, with ACS up 0.37 at 38.70, extending strong gains yesterday, Acciona up 1.55 at 190.70 and Sacyr Vallehermoso 0.26 higher at 24.54.

Media issues were under pressure, with Sogecable shedding 0.12 to 25.44 after a cut to 'neutral' from 'overweight' at JP Morgan, while Telecinco lost 0.31 to 18.41 and Antena 3 dropped 0.21 to 12.94.

Among smaller caps, Puleva Biotech soared 0.17 or 8.02% to 2.29, but was off a high of 2.48, after parent Ebro Puleva, down 0.54 or 3.62% at 14.38, said it is unaware of any corporate moves or any significant event that would affect the unit's share price movement.

And bringing Europe to a close this week we go to Italy where in Milan Share prices closed lower, tracking the trend on international share markets this afternoon, led by Alleanza after Generali denied any minority buy-out plan, and Banco Popolare on unconfirmed credit worries.

The Mibtel index lost 0.30% to 31,020, and the S&P/Mib was off 0.42% to 39,889. Turnover was an estimated 6.038  billion Eur.

Alleanza fell 5.02% to 9.335 Eur after Generali's 2007-2009 business plan yesterday evening included no mention of a buyout of Alleanza minorities and today Generali officials specifically denied any plan for this.

Generali fell 0.39% to 30.86.

Brokers said the Generali business plan included few surprises on earnings targets in its plan or on reorganisation of its Italian operations, while German restructuring gains are not particularly large.

Fondiaria-SAI rose 0.06% to 32.93.

Banco Popolare was down 2.15% to 15.71, continuing to suffer despite yesterday's company denial of any credit worries, brokers said.

One broker pointed to weak performance at Banco Popolare's Italease affiliate and at its recently merged Banca Popolare Italiana unit, for which he said it paid too high a price.

Banca Italease was up 0.76% to 13.10.

Unicredito was down 0.74% to 6.00, while Intesa Sanpaolo was up 0.41% to 5.415.

Fiat lost 1.76% to 21.21, coming off its lows when Morgan Stanley placed a 0.4% stake at 21.1 Eur, an operation completed during the afternoon. An analyst said weak consumer demand could curb Fiat earnings growth.

Finmeccanica gained 0.99% to 20.43 after the US Government Accountability Office confirmed a 2  billion usd order for military transport planes a Finmeccanica consortium won in June.

In addition, Finmeccanica officials said the US Air Force will re-open bidding for a 15  billion usd helicopter tender, won initially by Boeing.

Ansaldo STS rose 4.06% to 9.79 after upbeat comments on order intake, including a 426  million Eur order for a Naples metro. Analysts said they expect the company to meet its order target by year end.

Other gainers included Mondadori, up 1.50% to 6.785 and Saipem up 0.81% to 29.92. Lottomatica was up 0.48% to 25.35 on reports the government will ease possible penalties in a slot machine probe.

Enel lost 0.38% to 7.94. Societe Generale maintained its 'buy' with a 9.0 Eur target in new research, supported by its Endesa acquisition.

UK Market - London’s FTSE 100 gave up brief opening gains on Friday as Tate & Lyle tumbled after a trading update and Northern Rock resumed its decline after two sessions of gains.

The last trading session of a highly volatile third quarter saw the blue-chip FTSE 100 trading at 6,471.3, down 0.2% on the session. Over the quarter, the senior index was down 1.8%, but up 11% from its year low, hit on August 17.

The mid-cap FTSE 250 stood 0.3% lower at 11,011.5 - down 5% over the quarter, but up 6.1% from its year low.

In the banking sector, Northern Rock was again under pressure after it emerged that it owed the Bank of England close to £8bn since been given access to emergency loans nearly two weeks ago. The troubled mortgage lender had climbed strongly during the previous two sessions on speculation of a rescue bid, but Friday’s news pushed the shares 5.3% lower to 184p.

Tate & Lyle, the sugar and sweetener producer, fell 24% to 420p after warning on its outlook due to higher European corn prices and a poor performance in its sugar trading. The company added that the weak Dollar would also hit profits.

Enterprise Inns said it was too early to fully assess the likely impact on profits of the smoking ban enforced in England and Wales since July. The company said average core earnings per pub increased by more than 6% over the past year.

The shares, however, fell 1.6% to 590p on concerns over delays to its £750m debt refinancing, postponed due to volatile markets.

JJB Sports, the mid-cap retailer, reported a 38% slide in first-half profit due to the comparative period last year getting a boost from the World Cup. The shares climbed 5.8% to 155½p after the company said its second half was likely to be similar to that of a year ago after revenues in the last eight weeks climbed 4.9%.

Tullow Oil was the biggest winner on the main index, up 1.3% to 593p after crude prices extended to more than $83 a barrel, having fallen below $80 earlier in the week.

Miners were among the worst performers after ratings downgrades by UBS. The Swiss bank lowered its recommendation on Antofagasta from ”neutral” to ”sell”, driving the shares down 2.6% to 770p. Vendanta Resources and Kazakhmys, which were both lowered from ”buy” to ”neutral”, fell 2% to £20.16 and 2.3% to £14.21, respectively.

Japan & Asia Pacific - Asian Markets closed mixed on Friday as pre-holiday period sentiment to take hold of many markets.

In Japan the Nikkei closed down 0.3% at 16,785.69 as investors exercised caution ahead of the Bank of Japan's closely-watched Tankan business sentiment survey results on Monday.

Economic data released were mainly within market expectations, but some players focused on signs the economy is on firmer footing and some others focused on perceived signs of weakness.

Meanwhile, shares of carmakers, which were mixed in the morning, generally edged higher after Mitsubishi Motors upgraded its earnings guidance for the first half.

Hong Kong shares closed Friday mixed, but the benchmark index ended the third quarter at a record high, amid expectations of further rate cuts in the US and greater fund inflows from China.

Local investors are optimistic that the mainland government will make important announcements easing its investment policy over the Golden Week celebrations starting October 1.

The benchmark index closed up 77.32 points or 0.3% to a record 27,142.47 after a volatile session. The index shed some 166 points earlier in the day.

Volume reached 16.99 billion shares worth a record 148.58 billion Hong Kong Dollars.

Decliners led gainers 495 to 492, while 128 stocks were unchanged.

Chinese stocks led the market higher with the Hang Seng China Enterprises index up 373.45 points or 2.2% at 17,017.94.

Oil stocks rose sharply as oil traded above 83 US Dollars a barrel in Asia on Friday on concerns that a new storm developing in the Gulf of Mexico could disrupt oil production.

CNOOC, the locally listed arm of China National Offshore Oil Corp, was up 58 cents or 4.7% at 13.06 Hong Kong Dollars while PetroChina, the listed arm of the mainland's largest oil producer China National Petroleum Corp gained 68 cents or 4.8% to 14.74 Dollars

Property stocks fell as China tightened mortgage lending rules on the mainland. The Property Index was down 172.40 points or 0.5% at 32,515.57.

Into China now where the Major index of the Chinese mainland surged 2.64% on Friday, boosted by the return of money from a huge IPO and by a spectacular listing by drilling and oil equipment firm China Oilfield Services.

The benchmark Shanghai Composite Index ended the day at 5,552.301 points, after hitting a fresh all-time high of 5,560.417. Friday's close left it up 106% since the start of this year.

Gaining Shanghai stocks far outnumbered losers by 783 to 60. Turnover in Shanghai A shares was 137.6 billion RMB (US$18.3 billion), which was moderate but still sharply higher than Thursday's two-month low of 95.1 billion.

China Oilfield Services almost tripled from its initial public offer price to close at 39.90 RMB, far exceeding analysts' expectations of a jump of 50%. That left it at a premium of over 130% to its Hong Kong-listed H shares, one of the biggest premiums for a dual-listed share.

The stock will only be included in the index in mid-October, but its strength improved sentiment throughout the market.

Shenhua, China's top coal producer, drew a record 2.66 trillion RMB in subscriptions early this week and when the money from unsuccessful retail applications was unfrozen on Friday, some of it immediately returned to the stock market.

And there is considerable concern among some investors about soaring valuations for stocks.

In its latest tightening measure, the government on Friday announced a series of steps to cool the property market, including a ban on banks lending to developers found to have been hoarding land, and a rise in the down payment requirement for purchases of second homes.

Analysts said the steps could have a modest impact in slowing the rise of property prices.

But property shares, which had already fallen early this week as details of the steps were leaked, rose on Friday. The biggest listed developer, China Vanke, rose 3.25% to 30.20 RMB after sliding 7.23% over the previous two days.

The coal sector was strong, with Pingdingshan Tianan Coal Mining up its 10% daily limit to 48.91 RMB, partly because Shenhua's IPO stimulated interest in the sector.

Shipping shares surged after the Baltic Dry Index jumped more than 1% to another record high on Thursday. China COSCO Holdings soared 10% to 45.06 RMB.

Insurance stocks led the financial sector up, with China Life climbing 6.88% to 62.41 RMB.

Across in Taiwan Shares closed almost flat as late profit-taking eroded gains spurred earlier by Wall Street's overnight advance and purchases by fund managers to boost their portfolios for the end of the quarter.

The weighted index closed down 0.02% at the day's low of 9,411.95.

In South Korea the Kospi closed up less than 0.1% at 1,946.48 as investors were reluctant to make major commitments ahead of the weekend and after a five-day run-up that saw the main index gain nearly 100 points.

The market managed to close higher because of window dressing by institutions as the third quarter draws to a close and fund managers adjust portfolios.

In the Philippines the Manila market closed mixed, with investors opting to cash in gains in index heavyweight Philippine Long Distance Telephone Co (NYSE:PHI) (PLDT) following its recent record run, while building up their positions in other blue chips.

PLDT fell 1.0% to 2,910 pesos, off a new record high of 2,950 pesos.

Although PLDT's fall weighed heavily on the main index, it was partly offset by further gains in Ayala Corp on expectations that the conglomerate's key subsidiaries will continue to deliver growth.

The Philippine composite index ended down 0.1% at 3,572.90.

Singapore shares closed Friday mixed as investors consolidated their positions following a record-breaking run that took the benchmark index above the 3,700 points for a time earlier this week.

Chinese stocks listed in Singapore bucked the broader market decline, with the shares rising at double-digit rates on optimism that the mainland's economy will maintain its robust growth despite an economic slowdown in the US.

The Straits Times Index closed down 8.54 points or 0.2% at 3,706.23, after trading between 3,679.59 and 3,726.53. For the week, the index was up 4.6%.

Gainers led losers 522 to 292, with 850 stocks unchanged.

Volume was 3.10 billion shares worth 3.78 billion Singapore Dollars.

Malaysian shares closed flat Friday with investors cashing in earlier gains ahead of the weekend but sentiment remained fairly positive, evident in higher volumes after thin trading this morning.

The Kuala Lumpur Composite Index (KLCI) closed up 0.64 point at 1,336.30.

For the week, the KLCI was up 30.36 points or 2.3%.

The FTSE Bursa Malaysia 30-large cap index was down 4.76 points at 8,413.45 while the second board index gained 0.33 point or 0.3% to 105.79.

Gainers led losers 428 to 401, with 295 stocks unchanged and 206 counters untraded.

Trading volume was 1.27 billion shares, valued at 2.12 billion Ringgit.

Indonesian shares closed lower Friday led by big-cap banks as investors cut their positions on caution ahead of September CPI data due out on Monday.

Ten out of 11 economists polled by Thomson Financial predict that the consumer price index (CPI) rose between 6.6% and 7.2% year-on-year in September, faster than the 6.51% rise in August.

Higher food prices due to increased demand during the Muslim fasting month of Ramadan was likely the key factor behind the increase, they said.

The composite index closed down 19.62 points or 0.8% to 2,359.21. For the week, the index rose 23.72 points or 1.0%.

Volume was 4.35 billion shares worth 4.21 trillion Rupiah.

Decliners led advancers 114 to 73, while 61 stocks were unchanged.

The LQ45 index was down 3.31 points at 498.71.

In Bangkok Thai share prices closed marginally higher Friday as foreign investors chased gains in energy-linked shares with world oil prices nearing historic peaks.

Sentiment was also upbeat following a central bank report showing robust export growth in August.

The Stock Exchange of Thailand (SET) composite index rose 2.45 points or 0.29 percent to 845.50 and the blue-chip SET-50 index added 2.01 points to 616.03.

Losers outnumbered gainers 171 to 149, with 128 stocks unchanged, on turnover of 2.2 billion shares worth 21.7 billion Baht.

Indian share prices rose 0.82 percent on Friday to an eighth straight record close in volatile trade amid mixed global trends.

The Mumbai stock exchange Sensex rose 140.54 points or 0.82 percent to a record 17,291.1, beating the previous best of 17,150.56 on Wednesday. The Sensex hit a new intraday high of 17,361.47, surpassing the earlier record of 17,188.4. Dealers said the markets will remain volatile and a correction is expected.

The world’s sixth largest steel maker Tata Steel rose 55.7 Rupees or 7.02 percent to 850.3, led by media reports that the Tata Group will earn more than half its revenues from overseas the year ending March, after the purchase of Anglo-Dutch giant Corus Group in April this year.

India’s largest private sector aluminium firm Hindalco rose 7.9 Rupees or 4.81 percent to 172 Rupees while India’s biggest bank State Bank of India rose 64.7 rupees or 3.43 percent to 1,950.7 Rupees. 

The Australian share market closed at a fresh record high, for the third time this week, on speculation that the US Federal Reserve will cut interest rates again. The major averages opened higher and continued to gain to set new life-time highs. However, the major averages gave off some of the gains going into close of the trading session. The benchmark S&P/ASX 200 index ended up 29.7 points or 0.5% at a record closing high of 6,567.8, surpassing the previous record close of 6,538.1. The broader All Ordinaries index closed up 32.9 points or 0.5% at 6,580.9.

On the economic front, TD Securities-Melbourne Institute survey indicated that the inflation for the year ending September rose 3.0%, while private sector credit increased 1.5% on month in September.

Energy stocks were higher, with Woodside Petroleum gaining 2.6% and Santos gaining 0.33%. Banks closed mixed. National Australia Bank slipped 0.20%, Commonwealth Bank fell 0.76%, ANZ rose 1.00% and Westpac added 1.10%. While investment bank Macquarie advanced 0.72%, Babcock & Brown slipped 0.11%.

Casino group Sky City Entertainment added 3.5% after it allowed an unnamed party to examine its books ahead of a possible offer. In the retail space, Wesfarmers gained 1.1%, while Coles Group closed unchanged.

In New Zealand Sky City's 3% rise and a firm Telecom failed to offset general weakness on the New Zealand sharemarket yesterday, after markets elsewhere notched up gains.

The benchmark NZSX-50 index fell 6.91 points to 4268.90, on turnover totalling a hefty $212.7 million.

Sky City shares jumped after the company announced it had agreed to due diligence by what it called a "credible" party interested in a potential takeover, at a significant premium to the share price at the time of the approach.

The casino, hotel and cinema company's shares hit a high of 541 before closing up 17c at 522, on turnover of 15.3 million shares.

Other blue chips were generally weaker, with Fletcher Building down 17c at 1269, Contact Energy off 15c at 919, and Auckland Airport down 3c at 313.

On the back of a stronger New Zealand Dollar, Fisher & Paykel Healthcare fell 4c to 330 and F&P Appliances lost 1 cent to 356, while Sky TV - which imports most of its programming - rose 16c to 576.

Telecom was up 3c at 447, as investors digested the Government recommitment this week to split the company into three units.

Air New Zealand rose 5c to 247, following positive operating numbers for last month, and with shareholders approving its fleet purchase.

Other stocks to rise were Tourism Holdings, up 10c to 240, PGG Wrightson, up 3c at 193, Nuplex, up 8c at 734, and Sanford, 5c higher at 435.

On the decline were Infratil, down 7c at 297, Steel & Tube, down 19c at 430, Port of Tauranga, down 5c at 670, and Mainfreight, down 10c at 670.

Southport had the largest slide, down 7% or 20c to 270, while Cadmus Technologies posted the biggest rise of 14%, or 2c, to 16c.

Commodities - Gold rose on Friday to the highest level since 1980 as the US Dollar scavenged new lows against the Euro and oil prices headed near record territory.

Commodities were set to end the third quarter with substantial gains, despite a bumpy ride through August when concerns about the availability of credit roiled financial markets. Crude prices rose on Friday, while industrial metals and agriculture futures traded mixed.

Meanwhile, gold breached $750 an ounce as investors sought shelter in precious metals from the inflationary signs of rising oil prices and a weakening Dollar. The Dollar's decline against the Euro has been precipitous this week, as the greenback has slid to a fresh low for seven straight trading days. On Friday, the European currency purchased a record $1.4207.

There also were signs of strong gold demand from India this week. India, the world's largest gold consumer, is in the midst of its wedding and festival season, a traditional time of gold-buying for gifts and investment. The country's economy has been robust, and the Indian rupee has strengthened as a result.

December gold advanced $11.60 to $751.50 an ounce at midday on the New York Mercantile Exchange - the highest since an ounce fetched more than $850 in January 1980, according to Thomson Financial data. December silver jumped 32 cents to $13.965 an ounce.

Gold's recent climb has been fast and sharp. Jon Nadler, senior analyst with Kitco Bullion Dealers, cautioned in a note to clients that gold 'is also taking on some ominous and purely speculative features that may not see it correct in orderly fashion, or end too well.'

Oil prices headed for a strong finish to the quarter as crude extended the sharp gains a day earlier despite a general lack of fundamental, bullish news. The current supports for oil remain the Dollar's continued decline, a slight shortage of supply at a key delivery point in Cushing, Okla., and unrest in the oil-producing region of Nigeria, JPMorgan analysts said in a report.

A rise in speculative buying, typical at the month's and quarter's end, also helped prices rally, Pawlicki said.

Light, sweet crude for November delivery gained 42 cents to $83.30 on the Nymex, shy of the all-time peak $83.90 reached last week. Gasoline futures slipped 1.64 cents to $2.0775 a gallon.

Elsewhere, industrial metals traded in a narrowly mixed range. Nickel and zinc prices dipped about 1% on the London Metal Exchange. Copper edged higher in London and New York

In Chicago, corn and soybean futures gave back a portion of the huge gains made a day earlier, while wheat continued its rise. Strong export demand for US agriculture products has prodded prices of soybeans to three-year highs and wheat to an-all time record. The wheat market, in particular, has been strained by shrinking global supplies, which has supported a rash of buying of US grain.

December wheat rose 5 cents to $9.38 a bushel on the Chicago Board of Trade. Corn for December delivery fell 11.25 cents to $3.755 a bushel, and November soybeans dropped 10.5 cents to $9.985 a bushel.

Currencies - The Dollar finished a tumultuous third quarter on the currency markets firmly on the back foot, hitting a record low against a raft of currencies.

The Dollar index, which tracks its value against a basket of six leading currencies, dropped to a low of 77.378 on Friday, its weakest level since the Federal Reserve launched the data series in 1973.

Analysts said weak US data, including a plunge in house sales to their lowest in nearly decade and a drop in consumer confidence to a two-year trough, had heightened expectations that the Federal Reserve would cut interest rates further.

The Dollar fell to a series of fresh record lows against the Euro during the week. A loss of 1.1% to $1.4230 took its losses against the single currency to 5.8% over the quarter.

Analysts said the Euro was supported by data for consumer price inflation in the Eurozone, which rose by an annual 2.1% in September. That was the highest in more than a year and above the European Central Bank’s 2% target.

Meanwhile, the Dollar fell 1% to $2.04 against the Pound, dropped 0.4% against the Swiss franc to SFr1.1670, and eased 0.5% to Y114.90 against the Yen.

The Yen came under pressure as stock markets continued to stabilise following the Fed’s aggressive cut in US interest rates.

Analysts said the resultant rise in risk appetite was accompanied by renewed impetus for carry trades, in which the low-yielding Yen is sold to fund the purchase of riskier, higher-yielding assets elsewhere.

Over the week, the Yen dropped 0.5% to Y163.50 against the Euro, 1.9% to Y101.72 against the Australian Dollar, and 1.6% to Y86.97 against the New Zealand Dollar.

The Yen also fell 0.5% to Y234.10 against Sterling. But the Pound lost ground against the Euro and hit its lowest since January 2005, as concerns about the health of the UK financial system lingered. Over the week, the Pound fell 0.2% to £0.6980.

Elsewhere, the increase in risk appetite boosted emerging market currencies. The Turkish Lira rose 1.5% to TL1.2084 against the Dollar, the Brazilian Real climbed 1.6% to R$1.8375, and the South African Rand gained 1.7% to R6.8625.

The Australian Dollar moved little against its European and Asian counterparts in trading on Friday afternoon in New York. Meanwhile, the Australian currency saw strength versus the Dollar. The Australian Dollar moved with little economic news from the area. The Aussie reached a mark of 0.8875 as action progressed into the afternoon.

The Canadian Dollar extended recent gains against the US Dollar yesterday as the greenback tested bids around the C$ 0.9940 level and was capped around the $1.0020 level. 

And rounding out currencies as always here at home where the Chinese RMB appreciated sharply vis-à-vis the US Dollar as the greenback closed at CNY 7.5061 in the over-the-counter market, down from CNY 7.5146.  People’s Bank of China reported it will increase the flexibility of the RMB and keep the RMB’s value “basically stable.” PBOC also reported it will maintain a moderately tight monetary policy and sees 2007 CPI growth at 4.6% with GDP growth at 11.6%.  Versus the Yen as the single currency tested bids around the ¥162.65 level and was capped around the ¥163.80 level.

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Last week’s interest rate cut by the US Federal Reserve might have been cheered by markets but it came at an awkward time for Hong Kong, which pegs its own currency to the greenback.

A 50 basis points cut in the Fed funds rate to 4.75% was a tonic for America’s crisis-struck economy. But it was not what most doctors would have ordered for a small territory of 7m people enjoying average annual gross domestic product growth of 7% over the past four years, a stock market up more than 35% this year and soaring property prices.

To keep the Hong Kong Dollar in a trading band set at HK$7.75-7.85 to the US Dollar, the Hong Kong Monetary Authority, the de facto central bank, has surrendered control of its interest rates to the Fed since 1983, when the peg was adopted.

That is fine when US and Hong Kong economic cycles are in sync. During the depths of the territory’s last economic downturn in 2003, the Fed funds rate was conveniently just one%. But with Hong Kong now “enjoying its best period of sustained growth since the late 1980s”, according to John Tsang, its financial secretary, the latest rate cut is just more fuel on the fire, and further exacerbated by a chronically weak US Dollar.

If interest rates continue to go down and the US Dollar weakens further, we will experience expansionary consequences in Hong Kong I am sure.

For now, none of Hong Kong’s financial or business leaders is suggesting it is time to scrap the peg and even the most tentative contemplation of such a step within government circles would be treated as the most precious of state secrets.

But the territory’s ever closer economic union with the Chinese mainland, combined with the return of serious inflationary pressures for the first time in 10 years, is raising more and more questions about one of Hong Kong’s most sacred cows.

The peg has been sustainable for 24 years now and I don’t see anything which has made it less sustainable. Perhaps the question should be: Is it still optimal?

Those who argue that the peg is less optimal than ever can point to the Chinese RMB, which Beijing has allowed to increase gradually against the US Dollar since 2004. The Chinese currency crept through the symbolic level of Rmb7.8 to the US Dollar last year, ­making it more valuable than the Hong Kong Dollar, and has continued to strengthen at a slow but steady rate.

The most important consequence for Hong Kong has been higher import prices for the vast imports of food and consumer goods from China. Year-on-year food prices grew 3.6% in July and 4.6% in August.

This has yet to make a major impact on Hong Kong’s general rate of inflation, which Mr Tsang says could creep up to 2% this year against the government’s original projection of 1.5%. Even so, the financial secretary now says “the spectre of inflation” is one of his greatest concerns, and in particular its impact on the poor.

For a city with one of the world’s highest per capita GDP figures, Hong Kong has a surprisingly low median income, equivalent to just $15,400 (€10,900, £7,600) a year, and the poor bear the brunt of any cost-of-living increases while those better-off enjoy returns from soaring values of property and financial assets.

China - Shares in China Construction Bank rose by a less-than-expected 32% on their first day of trading on the Shanghai market on Tuesday, indicating that the burst of recent flotations may be starting to damp investor demand.

Although such a share price increase would be considered large in many markets, it is well below the first-day jump enjoyed by several other Chinese companies in recent months.

The shares of China Citic Bank, Bank of Nanjing and Bank of Communications nearly doubled on their first day of trading in Shanghai.

CCB raised Rmb58bn ($7.7bn) from the Shanghai listing, making it the largest ever flotation on the mainland market.

After rising as much as 40% in early trading, the shares closed at Rmb8.53, up from an opening price of Rmb6.45. The offering drew a record Rmb2,260bn in subscriptions – nearly 40 times the amount the bank was trying to raise.

The government has recently approved a number of large share offerings by well-known state-owned companies, partly in an attempt to slow down a stock market that has been on a remarkable two-year run, with share prices rising more than fivefold.

Officials are worried that the market could develop into a large bubble – with some foreign analysts saying one already exists.

The record for the largest initial public offering could shortly be broken after Shenhua Energy, China’s largest coal-miner, was given permission this week to raise as much as Rmb66.6bn from an upcoming listing.

PetroChina has also won regulatory approval for its plan to launch a large Shanghai equity offering.

Analysts said the more modest response to the CCB listing also reflected the fact that investors could now choose between half a dozen large banks on the Shanghai market.

The CCB debut helped pull down mainland share prices by 1% on Tuesday, with the Shanghai Composite index closing at 5,425 points.

The market was also driven lower by the news that Cathay Pacific had abandoned plans to buy a stake in China Eastern Airlines, which reduced the prospects for more consolidation in the airline sector.

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China is to impose a quota on investments on the Hong Kong stock market – which will reduce capital outflows to a fraction of the $100bn-plus forecast when its outward investment scheme was announced last month.

Liu Mingkang, chairman of the China Banking Regulatory Commission, said there would be no limit on individuals. But he said there would be tight controls on the total amount.

Mr Liu said there would be a “quota in general” and when that was reached, the State Administration of Foreign Exchange would reassess market activity.

“They can lift and readjust the quota if necessary and appropriate – it’s a flexible ceiling,” he said.

It was the first mention from Beijing of a quota on its plan to allow individuals to invest in foreign stocks. Chinese officials refused to disclose the level of the quota but it is reckoned to be lower than the amount of investment expected by the Hong Kong market, which has soared in anticipation of a flood of mainland Chinese money.

The benchmark Hang Seng Index has risen 26% since the SAFE announcement.

The new scheme, known as the “through-train to Hong Kong stocks” was announced by SAFE on August 20 and required investors to open trading accounts with Bank of China’s branch in the eastern city of Tianjin.

SAFE said investors would be allowed to open accounts from any BoC outlet in the country and buy an unlimited amount of foreign exchange for the purpose. But the scheme has been delayed by disagreement between SAFE, the CBRC, the central bank and the securities regulator.

The central bank’s focus is on draining liquidity from the economy and making the currency more flexible. The securities regulator wants to avoid extensive overseas investment that could damage the booming domestic stock market, which most analysts regard as overpriced.