US Markets - Stocks stumbled in the final session of a tumultuous week Friday as the Yen rallied against the Dollar and concerns about the US economy still dogged investors after Tuesday's huge drop.

The Dow Jones industrials logged their worst weekly performance in more than four years; until this week, the stock market had gone more than 45 months without a drop of more than 2% in a single session.

The Dow, as it had Thursday, poked tentatively into positive territory Friday before retreating as the Yen furthered its gains and investors failed to shake their unease.

Larger economic concerns such as the ascendent Yen have dominated Wall Street for much of the week after Tuesday's worldwide selloff that sent the Dow down 416 points and rattled investor confidence about the state of the US economy.

Stocks again wobbled Friday after the Yen broke through a key resistance level of 116.80. The Dollar fell 0.92% to 116.86 Yen.

Concerns lingered about a decline in the Yen carry trade, which refers to the process of borrowing Yen to acquire assets with greater yields in other currencies. A slowdown could hurt liquidity worldwide. Concerns about Japanese interest rates also weighed on investors.

A well-received profit report from American International Group Inc. kept the Dow industrials from falling further Friday; the insurer and pharmaceutical company Merck & Co. were the only two advancers among the index's 30 stocks. Merck, which received a mixed verdict Friday in a trial over its former painkiller Vioxx, finished up 20 cents at $44.19.

According to preliminary calculations, the Dow fell 120.24, or 0.98%, to 12,114.10. The Dow has fallen seven of the last eight sessions.

Broader stock indicators also fell. The Standard & Poor's 500 index fell 16.00, or 1.14%, to 1,387.17 and the Nasdaq composite index slid 36.21, or 1.51%, to 2,368.00.

For the week, the Dow fell 3.3%, the S&P 500 lost 4.4% and the Nasdaq fell 5.9%. For the Dow and the S&P 500, it was their worst weekly performance since the week ended July 19, 2002. And for the Nasdaq, it was the poorest weekly showing since the week ended Sept. 21, 2001, the first week of trading after the 9/11 terror attacks.

Bond prices rose sharply as economic concerns lingered and raised hopes for an interest rate cut. The yield on the benchmark 10-year Treasury note fell to 4.51% from 4.55% late Thursday. The Dollar was mixed against other major currencies, while gold prices fell sharply.

Investors seemed somewhat cheered by the final Reuters/University of Michigan consumer sentiment reading for February, even as it fell to 91.3 from 96.9 from January. Earlier this week, the Conference Board said its own measure of consumer confidence reached a 5 1/2 year high.

With little of the economic data that has at turns boosted and deflated sentiment this week, investors again looked abroad for direction. Performance of overseas markets has taken on renewed importance this week after a nearly 9% drop in the Shanghai Composite Index helped touch off the worldwide selling and sent US stocks reeling. The major US indexes each lost more than 3% Tuesday, erasing $632 billion in shareholder equity, according to S&P.

St. Louis Federal Reserve President William Poole said in remarks prepared for a speech Friday in Santiago, Chile, that rising energy prices wouldn't necessarily lead to an economic slowdown if monetary policy were laid out carefully.

With trading less frenetic than in previous days, investors had some time to parse individual stocks as they looked for bargains.

AIG's fourth-quarter profit rose sharply from a year earlier when the world's largest insurer spent $1.64 billion to settle charges over its accounting practices. Profits were slightly below Wall Street's forecast though investors were likely pleased by the company's announcement it would repurchase $5 billion in stock in 2007. The company also is targeting a 20% annual increase in its dividend. AIG rose $2.13, or 3.2%, to $69.54.

Dell Inc. rose 17 cents to $23.18 after the computer maker's profit fell 33% amid weak laptop sales. While revenue fell more than expected, the overall results weren't as sour as some investors had feared.

Gap Inc. fell 63 cents, or 3.3%, to $18.40 after the company's fourth-quarter earnings dropped 35% amid problems that include its newest chain, which the company plans to close.

Declining issues outnumbered advancers by about 3 to 1 on the New York Stock Exchange, where volume came to 1.86 billion shares, compared with an unusually heavy 2.22 billion shares traded Thursday.

The Russell 2000 index of smaller companies fell 15.59, or 1.97%, to 775.44.

European Markets - In Europe, the FTSE Eurofirst 300 suffered its biggest weekly fall since March 2003, dropping 5.2%. In London, the FTSE 100 fell 4.55%, or more than 300 points, to 6,116.2 ? also its worst week since March 2003.

Germany saw its markets Shares close lower Friday with Deutsche Telekom leading the blue-chip decliners on negative broker comments.

At the close, the DAX 30 index was 36.92 points or 0.56% lower at 6,603.32, having moved between a low of 6,554.05 and a high of 6,703.04.

The MDAX was down 30.82 points or 0.32% at 9,533.46, while the TecDAX slipped 1.26 points or 0.16% to 795.91.

DAX futures were down 28.00 points or 0.42% at 6,609.00, while bund futures gained 0.18 points or 0.15% to 116.48.

Deutsche Telekom dropped 0.31 Eur or 2.38% to 12.73 Eur as the telecoms giant's disappointing full-year figures and a new corporate strategy, both released yesterday, failed to impress investors and prompted two bearish broker notes from Merrill Lynch and Morgan Stanley.

Merrill Lynch cut its stance on Deutsche Telekom to 'sell' from 'buy' and Morgan Stanley downgraded its recommendation to 'equal-weight' from 'over-weight', while reducing its price target to 13.50 Eur per share from 15.30.

E.ON dropped 1.23 Eur to 96.40. E.ON sources in Spain said earlier the German utility has not requested permission from stock market regulator the CNMV to buy Endesa SA shares on the market, contrary to a Spanish media report.

Peer RWE was up 0.03 Eur at 76.28.

Financials and insurers Allianz, Munich Re and Deutsche Bank were all lower after analysts said continued losses could hurt their large investment portfolios.

Allianz dropped 1.61 Eur to 157.25, Munich Re was down 0.83 Eur at 117.67 and Deutsche Bank slid 1.11 Eur to 97.79.

Bucking Friday's trend, Deutsche Boerse climbed 3.21 Eur or 2.10% to 156.00 after the exchange operator announced record-setting trade figures for February.

Deutsche Boerse said combined turnover in February on its Xetra exchange and its trading floor was 206.1  billion Eur, representing a rise of 58% year on year.

Xetra trading revenues grew 64% to 190.7  billion Eur, with 15.5  billion Eur of floor trades.

Linde gained 1.33 Eur to 77.11 after it released better-than-expected full-year figures ahead of schedule. The industrial gases and engineering company said its EBITDA more than doubled to 3.830  billion Eur from 1.705  billion.

EADS dropped to the bottom of the MDAX index, down 1.11 Eur or 4.50% at 23.53. France's Foreign Minister Philippe Douste-Blazy said talk of the possibility the state of Qatar will take a stake in aerospace and defence group EADS is 'premature'.

Last month, market rumours Qatar's state investment agency is eyeing a 10% stake in EADS sent shares in the group higher.

On the other end of the index, Heidelberger Druckmaschinen jumped 1.55 Eur or 5.00% at 32.56 after Goldman Sachs lifted its stance on the printing machine specialist to 'buy' from 'neutral'.

Into France now where in Paris shares closed down amid mixed early trade in the US, leaving investors, already spooked by the plunge on markets worldwide this week, unwilling to maintain positions over the weekend.

The CAC-40 index ended down 33.70 points or 0.62% at 5,424.70. 27 CAC-40 stocks closed down, 11 up and two were unchanged.

On the Matif, March CAC-40 futures were trading down 31 points or at 5,432, while the Euro was at 1.3175 usd.

Lagardere was the biggest faller among blue chips, falling 3.43 or 5.53% at 58.55. The share had surged almost 7% in closing trade yesterday due to a dealer's inputting error.

EADS fell 0.99 or 4.02% at 23.63, hit by market scepticism about the group's ability to push thorugh its Power8 restructuring programme, with unions planning a half-day protest stoppage in France Tuesday.

In a fresh blow to the group's credibility, the last remaining customer for its A380 freight planes, UPS, confirmed it wants to cancel its order as soon as contractually possible, explaining that it is 'no longer confident' Airbus can meet a new delivery deadline agreed just last week.

Arcelor Mittal was down 1.54 or 3.76% at 39.46 in heavy trading, as investors took profits following the stock's 7% jump Thursday.

On the upside, Vallourec leaped 8.41 or 4.60% at 191.06 on bargain-hunting ahead of its full-year results on Tuesday, when it is expected to announce net profit doubled in 2006.

The shares have sunk over 13% in the year to date.

Air Liquide gained 2.72 or 1.61% at 171.43 after UBS raised its target price to 187 Eur from 180, while maintaining its 'neutral' rating. The broker said it had upped its forecasts for earnings per share growth after the company, reporting 2006 results this week, announced it is aiming for an increase of 10-13% per year in EPS for the next five years.

Carrefour also bucked the general negative trend, adding 0.47 or 0.91% at 52.00 as speculation continued over a possible leveraged buy-out.

Capgemini was up 1.19 or 2.33% at 52.21 recouping some of its heavy losses since Monday.

Second-line stock Sodexho gained 0.69 or 1.33% at 52.60 after it was upgraded to 'buy' by Merrill Lynch, with the broker arguing that the recent market correction offers a buying opportunity.

In Belgium yesterday the Brussels market bucked the European trend by rising slightly.

At the close, the Bel 20 was up 4.26 points or 0.10% at 4,272.02.

Heading the climbers, specialty minerals group Umicore rose 3.76 Eur or 2.97% to 130.56.

InBev was up 1.43 Eur or 2.78% to 52.93 as three analysts lifted their target price for the shares following the brewing giant's positive full-year earnings report Thursrday.

ING raised its target price to 51 Eur from 46.8 Eur, Credit Suisse to 57 Eur from 52 Eur, and Rabo Securities to 57 Eur from 52 Eur.

Chemicals and pharmaceuticals group Solvay edged up 1.03 Eur or 0.95% to 109.78, while supermarket group Delhaize inched up 0.19 Eur or 0.30% to 63.70.

Among the heavyweight financials, Dexia was up 0.14 Eur or 0.66% to 21.51, after the financial services group posted full-year and fourth-quarter results yesterday showing a 42% rise in net profit due to one-off items.

Shares in both KBC Group and Fortis were down. Fortis was 0.12 Eur or 0.38% lower at 31.48, while KBC was off 0.72 Eur or 0.79% at 90.68.

Belgacom headed the fallers, heading south by 0.50 Eur or 1.54% at 32.00. The Belgian telecommunications group posted higher-than-expected full-year and fourth-quarter net earnings, but warned its mobile services sales would drop in 2007.

Healthcare group Omega Pharma edged down 0.27 Eur or 0.47% to 57.57 as analysts digested the healthcare group's new five-year business plan. Pharmaceutical and biotechnology group UCB inched down 0.01 Eur or 0.02% to 48.36.

Elsewhere, utility Suez was off 0.47 Eur or 1.29% at 35.89.

Outside the Bel 20, Option was up 0.17 Eur or 1.25% at 13.79. ING Securities upgraded Option to 'buy' from 'hold' and raised its target price to 17 Eur from 16 Eur on its reassuring guidance and strong visibility after full-year net profit announced yesterday exceeded analysts' expectations.

Distrigas was 21.00 Eur or 0.50% higher at 4,221.00.

Meanwhile, bedding and foam manufacturer Recticel was the sharpest faller, slipping 0.70 Eur or 7.00% to 9.30. The company said it has halted talks to sell its interior trim operations to Nordwind Capital due to failure to agree terms.

Shares in The Netherlands closed lower for the fourth consecutive day, tracking Wall Street amid investor nervousness about the US economy, while Getronics made strong gains amid bargain-hunting.

The AEX closed 1.76 points or 0.37% lower at 480.20, after trading in a range of 477.07-486.19.

Getronics made strong gains, adding 3.50% to 6.21 Eur, amid bargain-hunting following steep losses after a week of bad news for the company and on its first day of trading as a midcap share.

ABN Amro rose 2.58% to 27.02 Eur, mainly due to bargain-hunting after losses during the week, while dealers commented that renewed takeover rumours by Royal Bank of Scotland hardly weighed and amid reports that ABN Amro has hired the services of four banks to offer advice against shareholder TCI.

Philips put on 2.57% to 27.59 Eur and KPN rose 2.27% to 11.28 Eur.

Fortis rose 0.74% to 31.47 Eur, while Aegon dropped 0.55% to 14.46 Eur and ING shed 1.69% to 31.35 Eur.

Randstad dropped 1.92% to 53.60 Eur on its first day of trading on the blue chip AEX index and after market peer Adecco reported mixed full-year results, dealers said.

ASML dropped 1.05% to 17.86 Eur, with investors ignoring a positive note on the company by brokerage ABN Amro, and Buhrmann dropped 1.09% to 10 Eur, while Royal Dutch Shell dropped 2.43% to 24.45, leading decliners.

Among midcap shares, VastNed Retail gained 2.04% to 75 Eur while Fugro gained 1.37% to 35.45 Eur.

Corio shed 0.40% to 67.89 Eur after initially opening higher after it said it bought new property in Turkey, while Wereldhave dropped 0.83% to 92.28 and Binckbank led decliners, dropping 1.82% to 14 Eur on its first day of trading on the AMX Midcap index.

On local markets, Arcadis shed 0.70% to 47.95 Eur, after initially gaining somewhat on reports by AFX News that it has been awarded a feasibility study contract in the US.

Into Switzerland now where in Zurich Shares closed slightly higher, wrapping up a volatile trading session and led by Nobel Biocare, Clariant and Nestle, but with Adecco the top faller after mixed fourth-quarter results.

The Swiss Market Index closed 16.80 points higher at 8,789.71, and the Swiss Performance Index was up 16.48 points at 6,977.27.

The Euro was slightly lower against the Swiss franc at 1.6045, as was the Dollar, at 1.2177 SFr.

Trading was marked by a high degree of volatility; still, the Swiss Market Index finally ended in positive territory after four consecutive negative sessions.

Focus was on Adecco, down 3.70 SFr or 4.6% at 77.35 SFr, the top faller here, after fourth-quarter operating profit and sales fell short of expectations, even though net profit was better than forecast due to a tax benefit.

Top gainer here was Nobel Biocare, up 7.50 SFr or 1.9% at 410.75 SFr, followed by Clariant, up 0.35 SFr ir 1.9% at 19.25 SFr.

Nestle reversed recent losses, ending 8.25 SFr or 1.8% higher at 466.75 SFr, still benefiting from its recent strong set of full-year results.

Among pharmas, Novartis gained 0.15 SFr at 76.45, while Roche gained 0.1 wSFr at 217.3, both stocks reversing earlier losses.

Elsewhere among insures, Zurich Financial was down 2.50 SFr at 340.75 SFr, after announcing that its US unit Farmers Group Inc (FGI) has signed an agreement to buy auto insurer Bristol West Holdings Inc (BRW) for 712  million usd excluding fees.

Peer Swiss Re added 0.40 SFr at 107.9 SFr.

Elsewhere among financials, UBS was down 0.50 SFr at 71.50 SFr, and Credit Suisse was 0.45 SFr lower at 84.5 SFr.

Outside the SMI, Straumann gained 2.25 SFr at 323.50 SFr, as investors welcomed its 100  million Eur acquisition of Germany's Etkon.

Sulzer added 73 SFr or 5.0% at 1,530 SFr after saying earlier it has sought to enter discussions with the board of UK group Bodycote International Plc with a view to making a recommended cash offer of 325 pence per share, an offer the UK group rejected, saying it undervalues the company.

In Scandinavia, Sweden saw Stockholm shares closed slightly higher on bargain hunting after days of declines.

The OMX Stockholm index closed up 0.79% at 378.38, and the OMX Stockholm 30 gained 0.73% to 1,159.55. Turnover was 31.19  billion SKr.

The main sector movers were industrials, which closed up 1.30%; banks, up 0.72%; and telecommunication services, 1.18% higher.

The major movers within these sectors included Volvo B, up 2.97% at 554 SKr bid; SEB A, 1.88% higher at 217; and TeliaSonera, up 0.87% at 58.25.

Hennes & Mauritz B closed up 0.41% at 368. The retailer said it is to launch a limited line of bohemian chic beachwear inspired by Kylie Minogue, who will also be the face of the upcoming advertising campaign.

Neighbours Denmark also saw Copenhagen Share prices close higher, lifted by Carlsberg on news it has been selected as a strategic partner of the Vietnamese brewery Habeco, and by DFDS after its full-year earnings report.

The OMXC20 index closed 5.32 points higher at 455.59 and the OMXCB Benchmark index rose 4.13 points to 433.52.

The OMXC All Share index closed 3.26 points higher at 434.08 on turnover of 5.58  billion DKr.

Carlsberg B closed 5 DKr higher at 585. The group has been selected as a strategic partner of the Vietnamese brewery Habeco (Hanoi Brewery Corp). The partnership is expected to materialise in a number of areas, with the joint investment in brewery projects being the most significant. Carlsberg will get 10% of Habeco's shares when the Vietnamese brewery is privatised.

Novozymes rose 7.5 to 486.5, following news it will establish R&D operations in India through the construction of laboratory and office facilities in Bangalore. Completion is expected in mid-2008.

Danisco was unchanged at 444.5.

DFDS added 22 to 762. The group expects total sales to grow by about 8-10% in 2007 after sales in 2006 rose to 7.52  billion DKr from 6.28  billion a year earlier. Most of the expected sales growth will derive from the acquisition of DFDS Container Line in 2006. DFDS also expects a pretax profit of approximately 425  million DKr in 2007.

The group posted pretax profit of 402  million DKr, up from 231  million, EBITDA of 1.13  billion DKr, up from 890  million, and EBITA of 597  million DKr, compared with 432  million.  DFDS ascribed the 74% rise in pretax profit to DFDS Tor Line's freight activities and the effect of the renewal of the group's fleet.

AP Moeller-Maersk B added 500 to 58,200. ABN started coverage of the stock with a 'sell' and a target price of 55,000 DKr, while Exane BNP started its coverage with a 'buy'.

DS Torm was up 7.5 at 369.5. Analysts polled by RB-Boersen expected the group to post pretax profit of 250  million usd on Monday, compared with 299  million. EBIT is seen at 252  million usd, down from 303  million, while sales are seen rising to 613  million usd from 587  million.

ALK-Abello B rose 14 to 1,123. The group's operating result for the four months to Dec 31 was a loss of 28  million DKr, while there was a pretax loss of 18  million DKr on sales of 563  million DKr.

Jyske Bank said the expectations to 2007 were a little disappointing. The bank, which reiterated its 'buy' rating and 12-month target price of 1,700 DKr, expects a generally positive newsflow and that additional clinical trials will support the use of the group's Grazax grass pollen allergy tablet. It added that the stock is attractively priced.

Lundbeck shed 0.25 to 152.5. Analysts polled by newswire RB-Boersen see Lundbeck posting full-year operating profit of 1.728  billion DKr and net profit of 1.073  billion DKr on sales of 9.035  billion DKr on Wednesday. Last year, the group reported operating profit of 2.170  billion DKr and net profit of 1.099  billion DKr on sales of 9.070  billion.

NEuroSearch rose 5.5 to 319.5. The company posts full-year earnings on Monday.

Novo Nordisk B was up 9 at 484 and Coloplast rose 7.5 to 470.

William Demant Holding was unchanged at 461. Analysts polled by RB-Boersen see the group posting full-year pretax profit of 1.214  billion DKr on Thursday, up from 1.066  billion a year ago, and operating profit of 1.275  billion DKr, compared with 1.103  billion. Sales are expected to rise to 5.107  billion DKr from 4.716  billion.

Into Norway now where markets also closed higher, lifted by Telenor in a recovery from losses over recent weeks, and by DnB NOR.

The OSEBX Benchmark index closed 3.70 points higher at 439.01 and the OSEAX All Share index rose 3.43 points to 497.42.

Total turnover amounted to 13.83  billion NKr.

Telenor closed 3.5 NKr higher at 112. Dealers said the stock is down about 15% over the last month and 7% over the last week, while Carnegie issued a positive note on Wednesday.

DnB NOR rose 1 to 83. Terra Securities gave the stock a 'buy' after the share has fallen from 94 DKr in the middle of February. Citigroup, meanwhile reiterated its 'buy' recommendation.

StorebRand shed 0.4 to 81.1.

Aker was 2.5 higher at 363, while DOF shed 1 to 61.25. Aker Oilfield Services, the newly-formed Aker subsidiary, will be owned 75% by the Aker group of companies, and 25% by DOF unit DOF Subsea.

Aker Kvaerner rose 5 to 730. The group will restructure its business by transforming its existing six divisions into 'five global business areas', in a bid to both increase transparency and optimise the efficiency of its overall operations.

Aker Yards was up 23 at 563 after the company won a 4  billion NKr vessel deal from Aker Oilfield Services. The contract involves four large well intervention/construction vessels, and includes an option for a further two vessels.

Marine Harvest was unchanged at 7.04. Carnegie upgraded its recommendation on the stock to 'outperform' from 'neutral' and maintained its target price of 8.5 NKr a share, which the broker says leaves 21% upside.

Norsk Hydro added 1 to 190. Carnegie reiterated its 'underperform' recommendation on Norsk Hydro, saying its sees just 4% upside to its fair value price of 197 NKr per share

Completing a positive full house for Scandinavia was Finland where Helsinki shares closed higher on bargain-hunting after recent losses, with engineering stocks posting the best gains, and Puuharyhma gaining sharply after its three main shareholders sold their stake in it to Spain's Aspro.

At the close, the OMX Helsinki 25 was 1.31% higher at 2,984.79 points and the OMX Helsinki was up 0.89% at 9,940.03 points on 2.002  billion Eur turnover.

Finnish amusement parks operator Puuharyhma was the market's star -- 45.88% stronger at 95.00 Eur after it said Spanish company Aspro's stake in it reached 68.37% as of today, after the latter bought all the shares held by the three main shareholders at 95 Eur per share.

Nokia gave up earlier gains to close 0.12% lower at 16.16 Eur.

Technology market researcher Gartner has forecast mobile phone unit sales to grow by 20% this year to 1.2  billion. That compares with Nokia's own expectation for growth of 'up to 10%' from estimated unit sales of 978  million in 2006.

In engineering, Metso finished 3.34% at 37.70 Eur, Wartsila B was up 4.34% to 46.13 Eur and Kone was 0.45% higher at 42.77 Eur.

Kone said it is to lodge an appeal against a 142  million Eur sanction imposed on it by the EU commission following a probe into price-fixing and market collusion in the lift manufacturing industry between 1995 and 2004. As things stand, the fine will be recorded as a cost in its first quarter accounts, Kone said in a statement.

Paper shares were also in positive territories, with UPM-Kymmene adding 0.51% to 19.60 Eur, Stora Enso R gaining 2.29% at 12.50 Eur and M-real B finishing the day 0.78% higher at 5.15 Eur.

Among energy issues, Neste Oil was 2.52% higher at 24.77 Eur and Fortum added 3.55% to 21.29 Eur.

Elsewhere, YIT closed up 1.94% at 24.16 Eur after it said it is to build a 15,000 square metre extension to its head office in Helsinki, which it then plans to sell to Royal Bank of Scotland's (RBS) Nordisk Renting unit for 69  million Eur on a lease-back basis.

Down to the South of Europe now and starting with Greece where Athens closed flat after a day of volatile trade as the market tried to find its footing following the sell-off over the last three sessions.

The ASE general index closed flat at 4,376.3 points with blue chips ending almost unchanged at 2,364.2 points.

Mid-caps and small caps rose 0.9% at 5,407.5 points and 1% at 859.8 points, respectively.

Advancers outnumbered decliners 161 to 95 with 62 unchanged in heavy trade of about 573  million Eur.

Bank of Piraeus dipped 2.1% lower to 25.04 Eur on sources saying it engaged in a heavy buyback yesterday of its own shares, which has raised legal uncertainties because it is in a public bidding process for Marfin Popular Bank.

Mobile operator Cosmote closed down 2.0% to 21.54 Eur on press reports that it may buy a 12.5% stake in its unit AMC from the Albanian state.

Alpha Bank closed 0.5% lower to 21.88 Eur after broker Eurobank Securities lowered its target price to 27.5 Eur from 28.5 Eur after the full-year results missed expectations. However, the broker noted that recent weakness is an overreaction and should be viewed as an opportunity to increase exposure. It kept the stock at 'outperform'.

Mid cap refrigeration group Frigoglass rose 3.8% to 15.84 Eur after broker Eurobank Securities raised its target price by 4% to 20.8 Eur and rated it as a top pick on its recently solid full year results.

Bottler Coca-Cola HBC rose 2.1% to 28.5 Eur and construction holding company Hellenic Technodomiki rose 1.7% to 10.28 Eur, both recovering from recent heavy selling pressure.

Sarantis closed up 1.4% to 7 Eur on AFX consensus forecasts which stated that full year group net is seen up 15.5% year on year to 22.3  million Eur.

Into Italy now where Milan's share prices closed lower in volatile trading, with worries continuing after this week's sharp correction, and led by Mediaset after its weaker than expected results.

The Mibtel index fell 0.05% to 31,451 points and the S&P/Mib fell 0.28% to 40,574.

Volume was an estimated 7.762  billion Eur.

Mediaset was down 5.18% to 8.32 Eur after its Italian 2006 advertising sales fell 3.6%, instead of remaining flat as expected, compared to 2005, with a knock-on impact on profit lines.

Merrill Lynch was particularly critical of Mediaset, downgrading the stock to 'neutral', from 'buy', and saying allocation of 90  million Eur of ad revenues from 2006 to 2007 raised credibility issues on management.

Among other media stocks, Mondadori lost 1.49% to 7.755, also affected by an error trade, brokers said.

In the financial sector, Mediolanum lost 1.36% to 6.01 and Alleanza was off 0.93% to 9.43.

Popolare di Verona fell 0.89% to 22.29. BPU lost 0.42% to 21.21 ahead of tomorrow's shareholder vote on its merger with Banca Lombarda. Lombarda fell 0.40% to 17.48.

Pirelli rose 1.58% to 0.819 after confirming suspension of talks with Telefonica on selling a stake in its Olimpia unit, which is the largest shareholder in Telecom Italia with 18%.

Telecom Italia fell 0.45% to 2.22. Telecom Italia confirmed reports it held talks in the last months on operation cooperation with Telefonica.

Fastweb was up 1.28% to 40.42.

Among oils, Tenaris rose 1.46% to 17.18. Eni rose 0.04% to 23.14. Enel was up 1.00% to 7.88 after buying more options on Endesa shares.

Ansaldo STS was up 2.66% to 9.11 after saying 2007 sales will grow at a slower pace than last year during a presentation at the bourse.

Rounding out Europe this week is Spain where in Madrid share prices closed lower as bargain hunters failed to provoke a recovery from recent heavy selling with Telefonica leading decliners.

The IBEX-35 index closed 102.7 points at 13,962.2 after trading in a range of 13,880-14,1933 on volume of 7.9  billion Eur.

The March future on the Ibex-35 closed at 13,948, down from 14,080 at Thursday's close, on around 36,258 contracts.

Telefonica was on offer, in line with European telecoms, falling 0.33 Eur or 2.05% to at 15.77.

Earlier Telecom Italia SpA said it held preliminary talks in recent months with Telefonica about possible joint initiatives in various operational sectors, confirming media reports

Utilities were in focus as the Endesa bidding saga continues, after E.ON AG sources in Spain said the German utility has not requested permission from stock market regulators to buy Endesa shares in the market, denying reports in Spanish media.

Endesa slipped 0.28 to 38.50, while Acciona, which holds about 20% of Endesa, rose 0.25 to 148.25.

Fenosa was up 0.013 at 38.08 after Fortis upgraded its stance on the utility to 'buy' from 'reduce'.

Gas Natural was up 0.52 at 32.52 after UBS reinitiated coverage with a price target of 35.50 Eur per share, up from 23.00 previously.

SCH was down 0.08 at 13.64 and BBVA was off 0.26 at 17.89. Earlier, China's CITIC Group said BBVA's purchase of stakes in China CITIC Bank and CITIC International Financial Holdings had been approved by regulators.

Antena 3 was up 0.07 at 16.50 after Merrill Lynch raised its stance on the broadcaster to 'neutral' from 'sell'. Broadcasting peer Telecinco was 0.16 lower at 20.44. The group's advertising CEO told investors earlier today he sees the broadcaster continuing a pricing policy of 9% growth in 2007 from 2006.

UK Market - Leading shares ended flat, with M&A inspired hopes in utilities helping to calm frayed investor nerves after a week of a heavy selling in global equities.

At the close, the FTSE 100 was 0.2 points higher at 6,116.2, well below its early high of 6,164.4, but still off an afternoon low of 6,085.6.

As for the week, the FTSE 100 was down 4.72% since its close last Friday after a slump in Chinese markets triggered fears of a slowdown in the worldwide economy.

Scottish & Southern Energy offered some support to blue chips, up 48 pence at 1,465, as talk in the market that Gazprom is raising 2  billion usd on a three to five year loan, heightened speculation the Russian energy giant is preparing to make a move for the UK group.

Brokers also said Scottish & Southern Energy is being pushed aggressively by Merrill Lynch, with some citing rumours E.ON might pounce if it can not bid for Endesa.

Consolidation hopes also provided a boost to sector peers, adding to their defensive qualities, with Drax, up 24 at 735-1/2, Severn Trent 27 firmer at 1,389 and National Grid, 6-1/2 to the good at at 757.

Drax was mooted as a potential target of venture capital funs for much of last week.

In retail, Tesco added 8-3/4 to 431-3/4 as positive broker comment added to news US investor Warren Buffett now holds a 2.9% stake in the UK's largest supermarket.

Sentiment was further lifted after Buffet's annual letter to shareholders revealed his investment and insurance group Berkshire Hathaway owns 229  million shares in Tesco at the end of 2006.

Royal Bank of Scotland was also in demand again, adding another 7 to 2,076 following yesterday's post-results advance and helped by an upgrade to 'buy' from 'hold' by ABN Amro.

BAT was also courted, adding 4 at 1,577 as a number of brokers hiked their target prices for the tobacco group following yesterday's well-received full year results.

Elsewhere, positive broker comment was a spur to gains in broadcaster ITV, up 1/2 to 109 with Goldman Sachs raising estimates and repeating its 'buy' rating with a 130 pence price target ahead of results on March 7.

In contrast, financials remained under pressure, with those most exposed to sliding markets worst hit.

Insurers Friends Provident fell 4 to 198-1/4, Legal & General eased 2 to 151-3/4, Standard Life fell 7 to 291-1/2 and Old Mutual dropped 2-1/2 to 170.

Among the mid cap fallers, pub operator JD Wetherspoon was the biggest casualty, losing 49 at 658-1/2 as a cautious outlook statement offset better-than-expected first-half numbers. Wetherspoon saw its pretax profit rise to 32.9  million stg for the six months to Jan 28, 2007 from 27.4  million in the same period last year.

Other pub operators fell back in sympathy, with mid cap Marston's losing 4-3/4 at 436-1/4, Greene King shed 2 at 1,059, and Punch Taverns fell back 14 to 1,113.

On the upside, Bodycote jumped 61 to 319, after the engineer rejected an unsolicited 325 pence per share offer from Sulzer, saying it undervalues the company. Sulzer said it is now considering its options with regard to a possible offer for Bodycote.

Schroders -- which could rejoin the FTSE 100 index after next week's FTSE indices reshuffle -- took on 16 at 1,095 after unveiling forecast-beating full-year results.

Its peer Rathbone Brothers was 40 firmer at 1,230 after posting better than expected full year results yesterday.

Well-received numbers also supported United Business Media shares, up 47-1/2 at 754 after the publishing and exhibition group posted a 5.5% rise in pretax pre-exceptional profit for 2006 and said it will pay a special dividend of 72 pence per share this month.

UBM reported pretax profit before amortisation and exceptional items of 160.5  million stg, up from 152.1  million stg in 2005, slightly ahead of consensus expectations.

And shares in Rightmove took on 14 at 485-1/2 after reporting solid full-year results and giving an upbeat outlook. The online property advertising group today posted full-year pretax profit of 17.7  million stg, up 101% on the 8.8  million seen last year.

In M&A, EMI added 10-1/2 at 246-1/2 on news just before the close the music group rejected a pre-conditional offer from Warner Music Group of 260 pence per share in cash.  The company said the board the 260 pence per share price was 'inadequate' in light of the stand-alone value of EMI, and the synergies from a combination with WMG.

Japan & Asia Pacific - Many Asian markets slid again Friday amid lingering jitters over the global selloff sparked this week by the plunge in Chinese stocks.

But markets in Hong Kong and Shanghai edged higher as some investors snatched up stocks that had fallen to attractive levels in recent days.

Hong Kong's Hang Seng Index rose 95.41 points, or 0.49%, to 19,442.01 as traders bought Chinese telecommunication stocks. The index had tumbled 1,365 points, or 6.6%, in the previous four sessions.

China Mobile rose 0.5% after investment bank UBS raised its target price for China's biggest mobile operator by subscribers to HK$108 from HK$80. China Unicom advanced 1.6% and China Netcom jumped 1.7%.

Shares traded on the Chinese mainland wrapped up a turbulent week higher, with the benchmark Shanghai Composite Index rising 1.2% to 2,831.53 points after plunging 2.9% Thursday. The index tanked 8.8% Tuesday in its biggest daily%age drop in a decade, but bounced back 3.9% Wednesday.

In Japan , the Nikkei 225 stock index dropped 235.58 points, or 1.35%, to 17,217.93. Over the last four days, it has plunged 5.5%.

Exporter stocks like car makers and electronics companies led the decline as players are worried about the US economy.

The Tokyo market was also weighed down by the strengthening of the Japanese Yen against the US Dollar. A higher Yen makes Japanese exports more expensive and less competitive overseas.

Elsewhere in the region, Thailand 's shares dipped 0.2% to 679.02 points in light trading on selling in blue chips.

Indonesian shares ended steady at 1,760.02, with gains in telecom and mining blue chips keeping index in positive territory.

The Malaysian Kuala Lumpur Composite Index fell 1.3% to 1,167.68 points, weighed down by profit-taking across all sectors.

Philippine shares slipped on lingering concerns over the global economy. The benchmark 30-company Philippine Stock Exchange Index dropped 49.78 points, or 1.6%, to 3,140.34.

South Korean shares declined for the third straight day in a volatile market. The Korea Composite Stock Price Index, or Kospi, slipped 2.87 points, or 0.2%, to 1,414.47.

Chinese shares rose as investors snapped up bargain blue chips following losses earlier in the week. The benchmark Shanghai Composite Index gained 1.2% to 2,831.53.

Singapore shares finished down for the fifth straight session as a slide in property stocks outweighed fresh bets on Genting International. The Straits Times Index declined 13.84 points, or 0.4%, at 3,078.74.

Taiwanese shares dropped slightly as a rally in steel issues offset the impact of weak neighboring markets. The Weighted Price Index of the Taiwan Stock Exchange retreated 7.90 points, or 0.1%, to 7,670.77.

The Australian stock market suffered its fourth consecutive day of losses as investors remained jittery after the rout on Wednesday.  The benchmark S&P/ASX200 index was 24.2 points lower at 5786.0, while the all ordinaries lost 23.1 points to 5775.2.

On the Sydney Futures Exchange, the March share price index contract was 25 points weaker at 5778 on a volume of 30,344 contracts.

BHP Billiton gave up just under one% or 23 cents to A$27.12 while Rio Tinto offloaded 57 cents to A$75.46.

Oil and gas producer Woodside retreated 32 cents to A$36.70.

ANZ, which told analysts Friday it was on track for revenue growth of between seven and 10% for its financial year, fell back 32 cents to A$28.86.

The other major banks fared better, with the Commonwealth Bank gaining eight cents to A$49.65, Westpac firming two cents to A$25.09 and National Australia Bank steady at A$39.90.

In retail, Woolworths continued to stretch the lead over its supermarket rival Coles, putting on 23 cents to A$27.03.

Coles was steady at A$15.32, while department store David Jones climbed six cents to A$4.43.

Qantas was up 10 cents to A$5.23 as the market reacted to yesterday's news that the competition regulator won't stand in the way of a proposed A$11.1 billion takeover bid by private equity consortium, Airline Partners Australia.

New Zealand stocks rose sharply Friday, shrugging off the last effects of Tuesday's global share rout.

The benchmark NZX-50 rose 49.9 points, or 1.2%, to 4,098.69, almost square with where it finished before Wednesday's slide.

Bellwether Telecom Corp. led Friday's uptick, bouncing 3.4% to NZ$4.89 on rumors Australia's Seven Network is one of four bidders to make the shortlist to buy Telecom's Yellow Pages directories business.

Fisher & Paykel Healthcare, which generates much of its revenue in US Dollars, rose 0.8% to NZ$3.95, while sister stock Fisher & Paykel Appliances rose 0.6% to NZ$3.67.

Fletcher Building rose 0.5% to NZ$11.11, continuing its swift recovery from the midweek sell-off.

Electricity and gas network company Vector rose 1.5% to NZ$2.76. after Citigroup Friday raised its target price on the stock to NZ$3.05 from NZ$2.85.

Commodities - Commodities appeared to have escaped some of the worst of the volatility that affected equity markets this week with crude oil on Thursday hitting a high for the year.

Precious metals came under pressure as speculators liquidated profitable positions to cover losses elsewhere but base metals displayed some resilience.

Nymex April West Texas Intermediate oil slipped 10 cents to $61.90 a barrel on Friday, but gained 1.2% over the week after hitting a high for the year at $62.74 during volatile session on Thursday. ICE April Brent rose 4 cents to $62.15 a barrel on Friday, up 2% over the week.

Production cuts introduced by the Organisation of the Petroleum Exporting Counties have tightened the market and US oil demand is running at record levels. US refineries have been undergoing an unusually heavy round of maintenance work contributing to a sharp fall in heating oil and gasoline inventories. Nymex April RBOB gasoline rallied 8.9% to $1.9200 a gallon this week, providing a lead for crude prices.

Refiners? margins as measured by the benchmark Nymex 3-2-1 crude-gasoline-heating oil contracts reached $16.70 on Friday, almost triple the level of a year ago.

Gold fell 5% to $648.00 a troy ounce this week. Before the latest bout of equity market volatility, speculative ?long? positions betting on further price gains for gold were at very high levels. Analysts said these positions had been closed by hedge funds to pay for losses elsewhere and that dealers had de-risked their trading books as a mood of extreme caution spread across the precious metals complex.

Silver was also hit, falling 10.7% to $12.98 a troy ounce in the week. The usual fundamental drivers take a back seat as long as investors remain jittery. Silver and Gold just sold to reduce portfolio risk; but will return stronger than ever when those portfolio are fully rebalanced.

The sharp fall in the Chinese equity market this week was not expected to affect its demand for base metals.  Chinese copper imports rose in January for a third successive month, suggesting demand is recovering, but copper retreated 4.6% to $6,105 a tonne over the week.

Codelco, the state owned Chilean company and the largest copper miner in the world, reported record profits last year in spite of a fall of 2.6% in output to 1,873m tonnes. It will invest $2.2bn this year with Gaby, the main copper mine, expected to produce 150,000 tonnes in 2009.

Nickel edged 0.1% higher to $40,850 a tonne this week after hitting a record $42,100 on Thursday, supported by critically low levels of available stocks. The Goro nickel project in New Caledonia owned by CVRD, of Brazil, remains key to improving the supply/demand imbalance.

But Goro?s costs have spiralled and rumours suggest CVRD will further delay start-up, preferring to concentrate on developing assets in Brazil.

Currencies - The Yen staged its sharpest rally for 14 months against the Dollar this week as global equity markets tumbled.

Analysts said there were signs that rising risk aversion was prompting investors to unwind carry trades, in which long positions in high-yielding currencies are funded by selling low-yielding currencies such as the Yen and the Swiss franc.

The increasing popularity of carry trades has put both currencies under pressure in recent months.

However, analysts said there was evidence this week that investors faced with losses on long positions in the equity markets were covering their losses by closing out profitable carry trade positions.

Over the week, the Yen rose 3.3% to Y117.05 against the Dollar, its biggest one-week gain since December 2005, and climbed 3.2% from a record low to Y154.20 against the Euro. The Yen also advanced against Sterling, rising 4.3% to Y227.40 and rallied 4.3% to Y91.66 against the Australian Dollar.

Against the high-yielding New Zealand Dollar and South African Rand the Yen rose 5% to Y80.28 and 7.1% to Y15.89 respectively.

Meanwhile, the Swiss Franc also made progress, rising 1% to SFr1.2195 against the Dollar and 1% to SFr1.6065 against the Euro on the week.

The exact trigger for the rout in global equity markets was the subject of some debate, with analysts citing continuing tension over Iran?s nuclear weapons programme and worries that weakness in the US subprime mortgage market could spill over into the wider economy.

The key trigger for the sell-off is as I have mentioned before, renewed pessimism about growth prospects in the US, reflected in the sharp decline in real yields.

Although rising risk aversion was the dominant driver of the Yen, Japanese economic data also provided some support for the currency.

Net securities investment inflows into Japan rose to Y5,500bn in the last four weeks. Although these massive inflows might be largely hedged, they are likely to deter a re-establishment of short Yen positions in the near term.

Elsewhere, the Dollar had a volatile week, failing falling to a two-month low of $1.3259 against the Euro on Tuesday after a larger than expected drop in US durable goods orders raised fears over a slowdown in the world?s largest economy

However, the Institute for Supply Management survey of the US manufacturing sector eased some of those fears on Thursday, coming in stronger than expected and boosting the Dollar. Meanwhile data released on Friday, which showed a sharp fall in German retail sales in January, weighed on the Euro.

Over the week, the Dollar was flat against the Euro at $1.3170 but rose 0.9% to $1.9450 against the Pound.

South Africa's Rand fell sharply against the Dollar on Friday, knocked by a shift out of high-yielding currencies as the Yen continued its recent rally.  The Rand was trading at R7.3250/$ at 17:10, 0.8% weaker than its previous New York close but well off the day's lowest mark of R7.3925 - its weakest level since 10 January.

The Canadian Dollar closed at its lowest level in three weeks against the US currency on Friday as slightly better than expected domestic growth data had little impact. The Canadian Dollar closed at C$1.1771 to the US Dollar, or 84.95 US cents, down from C$1.1727 to the US Dollar, or 85.27 US cents, at Thursday's close.

The Australian Dollar slid for a third day as traders parked assets in the world's main currencies after a global slide of equities this week. At 1700 AEDT, the domestic unit was at $US0.7850/53, lower than Thursday's close of 0.7865/70.

Equally, the New Zealand Dollar was dumped Friday for the second time in the week as investors unwound carry trades. The Kiwi lost the best part of a cent against the US and Australian Dollars. At 5pm Friday in New Zealand it was buying US69.28c compared with US70.05c Thursday. The Kiwi has lost nearly 3% against the US Dollar and 4% against the Yen since Tuesday.

Here in China the RMB finished at 7.7465 to the Dollar on the over-the-counter (OTC) market, further easing from Wednesday's record high and Thursday's close of 7.7435.

China - Although the US economy is beginning to see problems of its own, the real trigger for the break in the markets this week was the 9% slide in China?s Shanghai Composite Index this week - China sneezed and the rest of the world did too.  

Since then, the ebb and tides of the global financial markets has been determined by the overnight fluctuations in the Chinese market, which is a dramatic shift away from the way things normally operate.  When the Chinese government denied any plans to take the steam out of the stock market by increasing corporate taxes, the sell-off abruptly stopped. 

So is the Chinese government the puppet master behind these moves?  Have they become the new linchpin for the global markets and can US traders now use the Chinese stock market as a leading indicator for what will happen to the Dow? 

In order to try to answer these questions, we have to first understand how China gained such a stronghold on the markets.

In the past, the US markets set the tone for overnight trading in the Asian markets, but China has recently become the trendsetter.  A play by play of the action in the Chinese stock market reveals that this Tuesday, February 27th, the Chinese stock market ended the day down 9%.  The US stock market then gapped lower at the open a few hours later to end the day down over 400 points. 

On Wednesday the 28th, the Chinese stock market rebounded and the US stock market did the same. 

On Thursday the Chinese stock market resumed its slide, triggering a 200 point drop in the US stock market at the open.  Finally on Friday, Chinese stocks ended the day higher.  This suggests that even though we did not have a positive close in the Dow Friday, that a rebound could be seen on Monday.

So ostensibly, what has changed?

In less than three years, China has become a very major player in the global financial markets.  Not only have their foreign exchange reserves hit a milestone above $1 trillion, but the market capitalizations of their stock markets are more than $1.3 trillion. 

Over the past few years, many international companies have become intimately tied with China by either becoming heavily invested into the country or having China heavily invested in them. 

The wave of initial public offerings last year on the Shanghai and HK stock exchanges have also attracted a great deal of foreign investment that will be eager to bail if the sell-off deepens. 

For reasons of their own, China needs to tame the speculative stock market bubble.  Prior to the latest drop, the Shanghai Composite Index hit a record high on 26 February 2007.  This represented a 158% rise since January of last year.  

The turnover in the stock market is up 700% while the number of local traders has increased significantly since the beginning of this year. 

With so many of their citizens dipping into their savings or leveraging their homes to play the markets, China does not want to see a collapse that is reminiscent of the 1997 East Asian financial crisis or the 9/11 induced crash 5 years ago.  They have a strong interest in taming the bubble now, when it is still manageable. 

Yesterday they cut the amount that banks can borrow overseas to stem the hot money flows into the country.  On 16 February, they raised the reserve ratio that banks are required to 10%, which marks the fifth increase in eight months.  The measures are showing their effect, but the Chinese government still has a lot more to do.

Even with the latest drop, the stock market is up 10% year to date. 

I suspect that the Chinese government is very happy with the latest movements in their financial markets.  We have seen their comments and actions induce both fear and stability into not only their own markets, but markets globally. 

As the world?s largest holder of foreign reserves, China has what it takes to back what they say.  The world is no longer shielded from the fluctuations in the Asian markets and as China continues to grow, they will command an even bigger role in the financial markets. 

Although the US could easily become the driver for the global stock markets once again, expect China to steal the driver?s seat every so often. 

Anyone trading the US stock markets, US Dollar and Japanese Yen will find it worthwhile to keep a close eye on the performance of the Chinese stock market to help gauge the US opening sentiment.