US Markets - Wall Street twisted its way through another difficult session Friday, discouraged about the economy's prospects but still managing a higher finish after some concerns about the beleaguered financial sector lifted late in the session.

Word shortly before the close that Citigroup Inc.'s board plans to meet in an emergency session over the weekend helped that stock and other financials pare sharp losses.

Friday's session ended a week made turbulent not only by bad news from the financial sector but also by spiking commodity prices and comments from the Federal Reserve that it might be less generous with interest rate cuts in the coming months. A highly anticipated Labor Department report showing employers added 166,000 jobs in October -- the most in five months and nearly double what analysts had been expecting -- didn't give stocks much of a lift a day after a sharp pullback as investors' unease about the financial sector seemed to blanket trading.

Wall Street was clearly still shaky after Thursday's sharp pullback, which took the Dow down more than 360 points -- the fourth biggest drop of the year. The market has been mercurial lately, with economic data coming in mixed and the possibility of interest rate cuts ending, and Friday's trading saw the major indexes alternating between gains and losses.

At the close Friday, the Dow rose 27.23, or 0.20%, to 13,595.10 after being down more than 120 points earlier in the session and fluctuating between gains and losses.

Broader stock indicators also closed higher. The Standard & Poor's 500 index rose 1.21, or 0.08%, to 1,509.65, while the Nasdaq composite index rose 15.55, or 0.56%, to 2,810.38.

Bond prices rose as investors pulled more money out of stocks. The yield on the 10-year Treasury note, which moves opposite the price, fell to 4.32% from 4.35% late Thursday.

A mid-week quarter point interest rate cut by the Federal Reserve and some surprisingly good employment data failed to offset the fallout from a steady crescendo in mortgage market worries.

Banks lead European stocks lower - Nov-02Bank shares lead Asia lower - Nov-02Contagion fears grow on subprime writedowns - Nov-01Comment: Central banks should prick asset bubbles - Nov-01Dollar resumes downward path - Nov-02Monolines left reeling by domino effect - Nov-01Although some mixed corporate earnings added to equity market jitters it was the financial sector, particularly the big banks and credit insurers, that remained the most significant drag on stocks. 

Amid the broad-based sell-off technology stocks continued to attract buyers seeking refuge from the financial maelstrom and was the strongest of the S&P's ten leading sectors on the week. 

Expectations of further big swings in equity prices increased. Volatility as measured by the CBOE Vix index jumped 24.5% this week at 24.36.

Merrill Lynch was the worst performing of the big banks this week, down 14.7% on the week at $56.45, after a report said the SEC was investigating deals it allegedly made with hedge funds to delay losses linked to complex mortgage-backed securities. Merrill said it had “no reason to believe inappropriate transactions occurred.” The furore capped a bad week for the company after Stan O'Neal, chief executive, stepped down.

Citigroup was also sharply lower amid fears it may have to raise more than $30bn - possibly by cutting its dividend - because of the losses it took from risky credit market investments. Its shares were down 13.1% on the week at $37.08. 

Credit insurers took particularly large hits amid fears they too could be nursing mortgage-related problems. Ambac Financial, and MBIA, municipal bond insurers, were among the worst performers on the S&P this week. The shares were down 42.3% at $25.61 and 28.6% at $35.97 respectively. 

Other financial stocks punished by traders this week included Washington Mutual, down 15.4% at $24.18 and Countrywide Financial, the mortgage lender, down 18.7% at $14.07. The S&P financial index was down 7.1% on the week at 419.50. 

Homebuilders suffered sharp losses as the chances of a swift housing recovery receded amid accelerating mortgage delinquencies. The S&P homebuilder index fell 10.4% on the week at 385.44. Lennar, down 12.6% at $21.21, and Pulte Homes, down 9.2% at $13.91 were among the biggest fallers. 

Aside from the mortgage market worries there were some reasons for investors to cheer this week. A quarter point cut in interest rates by the Federal Reserve was well received by the market. However optimism was tempered as the neutral language of the Fed's accompanying statement led many to believe further cuts are now unlikely. 

There was also some positive jobs news on Friday. Non-farm payrolls rose 166,000 last month and the unemployment rate was steady at 4.7%. Economists had expected a rise of 80,000 in payrolls. 

Average hourly earnings rose 0.2% and were up 3.8% for the year, a figure that economists said suggests labour costs remain contained. 

“The jobs market remains strong and incomes remain robust,” said TJ Marta, fixed income strategist at RBC Capital Markets. 

Technology was one of the few sectors to end the week in positive territory. Microsoft was the standout stock on the Dow, gaining 5.2% at $36.85, continuing a rally from last week's surprisingly strong earnings. Google soared past the $700 mark, rising 4.7% on the week at $706.42.

Semiconductors fared better this week. Intel rose 2.9% at $26.68 on the week, while the PHLX semiconductor sector index gained 1.1% at 456.91.

However Ebay declined 7.1% at $34.05 after Bear Stearns forecast the online auctioneer could experience weaker margins. Yahoo was down 9.4% at $30.46. 

It was a big week for oil companies as ExxonMobil and Chevron reported results and as crude oil rose as high as $96 a barrel. 

Both companies disappointed investors, after posting falling profits from the production of petrol. Exxon, down 4.9% at $87.66 posted a 10% decline in earnings, while Chevron's third-quarter profit fell by more than 25%. Its shares were down 4.3% on the week $87.72. The S&P energy index was down 2.9% at 571.33.

European Markets - European stocks extended their losses on Friday with troubled financial stocks leading the market lower on renewed fears about subprime fallout and escalating credit market woes.

Let's look a little closer at Europe's main markets.

Starting this week we go to Frankfurt where German shares closed lower today led down by banking stocks and tracking a lower Wall Street opening yesterday afternoon after a strong US jobs growth report was unable to offset market jitters.

The DAX closed 31.36 points or 0.40% lower at 7,849.49 after trading between a low of 7,792.37 and a high of 7,864.48 Friday.

The MDAX lost 58.33 points or 0.56% at 10,419.52, while the TecDAX fell 7.12 points or 0.70% to 1,010.15.

DAX futures won 43 points or 0.53% to 7,899.50, while bund futures gained 0.03 points or 0.03% to 113.77.

Leading Blue chips lower, ThysseNKrupp lost 1.46 Eur, or 3.27%, to 43.20, as mining and metals stocks around Europe took a knock on concern a US-led economic slowdown could lead to weakening demand for raw materials.

Deutsche Postbank dropped 1.44 Eur, or 2.96%, to 47.15 on renewed pressure in the banking sector after Citigroup and Bank of America, the two biggest US banks, were downgraded by CIBC World Markets yesterday on worries about the credit markets.

Peer Deutsche Bank was down 1.87 Eur, or 2.10%, at 87.00, Commerzbank shed 0.42 Eur, or 1.50%, to 27.51, while Hypo Real Estate was off 0.49 Eur, or 1.23%, at 39.24.

Bucking Friday's negative trade, TUI was 0.78 Eur, or 3.91%, firmer at 20.75 after Merrill Lynch added the shipping and tourism conglomerate's shares to its 'Most Attractive List'.

Metro gained 1.87 Eur, or 3.91%, to 63.52, after a report in the Handelblatt newspaper reported that MDAX-listed Arcandor AG's Karstadt department stores aim to acquire the retail giant's Kaufhof unit and then merge it within the unit.

Bayer added 0.89 Eur, or 1.60%, to 56.65, while Siemens advanced 0.92 Eur, or 1.00%, to 92.91.

On the MDAX, Arques was 1.11 Eur, or 3.79%, lower at 28.19, the index's worst performer.

Altana was 0.10 Eur, or 0.61%, higher at 16.52 as the top gainer.

On the TecDAX, Ersol lost 4.08% to 89.25, to lead the index lower, after a report in the Frankfurter Rundschau that the German government might cap solar energy subsidies put solar stocks under pressure.

Across to Paris now where France 's stockmarket closed slightly lower on Friday as ongoing credit and inflationary fears were offset towards the end of the session by positive jobs data from the US, sparking a late rally.

The CAC-40 index closed 10.50 points or 0.18% lower at 5,720.42.

Among CAC-40 stocks, 18 closed higher and 22 closed lower.

Banking stocks underperformed the market once again. Societe Generale ended the session 4.06 Eur or 3.60% lower at 108.65. Dexia fell 0.66 or 3.22% to close at 19.84. Credit Agricole was 0.69 or 2.60% lower at 25.86 and BNP Paribas closed 1.48 or 2.03% lower at 71.52.

French banking stocks are underperforming their counterparts elsewhere in Europe because 'they haven't yet published their results and we don't know exactly what is in their accounts, compared with the Swiss and German banks - UBS, Credit Suisse and Deutsche Bank that have published them in the last few days,' said a Paris-based trader.

Stocks in the luxury goods sector also took a battering after SG Securities reshuffled its ratings on the sector to take into account slower organic growth as demand weakens in the US and Asia from the fourth quarter of this year and into 2008.

The broker maintained its 'neutral' stance on the sector, but cut Hermes and Bulgari to 'sell' from 'hold' and Swatch to 'sell' from 'buy. Hermes was 3.03 or 3.37% lower at 87.00. LVMH fell 1.59 or 1.81% to 86.13. PPR ended 3.76 or 2.77% lower at 131.80.

Schneider Electric was the day's best performer, gaining 3.66 or 3.87% to close at 98.12 after Societe Generale analysts published a research note in which they stated that the group could be a 'very attractive target' for Switzerland's ABB.

Other strong performers were defensive stocks as an increase in risk aversion and concerns over a US economic slowdown prompted investors to shift into the pharmaceuticals, food, telecoms and energy sectors. France Telecom rose 0.47 or 1.82% to close at 25.65 and Danone was up 1.64 or 2.82% at 59.85.

EdF, Gaz de France and Suez all also saw gains. EdF was up 0.83 or 1.02% at 82.32, Gaz de France closed 0.29 or 0.74% higher at 39.25 and Suez ended 0.57 to 1.28% higher at 45.14.

Across the border in Belgium , we saw the Brussels market close lower with Fortis plunging nearly 5% on negative sentiment towards banks with heavy exposure to the capital markets amid renewed subprime worries.

At the close, the Bel 20 was down 51.47 points or 1.18% at 4,309.82, while Fortis dropped 0.99 Eur or 4.64% to 20.34.

Fortis shares were not helped by highly speculative rumours that the Belgo-Dutch bancassurer was asking for emergency funding at the Bank of England, a claim also directed towards Barclays earlier in the day.

Fortis shares were hit by a downgrade to 'sell' from 'buy' at UBS, which also cut its target price to 18 Eur from 33.

Among the other heavyweight financials, Dexia was down 0.77 Eur or ?3.74% at 19.84, on a rating cut to 'sell' from 'neutral' at UBS with a target price reduction to 15 Eur from 23 following Dexia's deteriorating newsflow and fundamentals.

Analysts were also disappointed with Dexia's US subsidiary Financial Security Assurance Holdings Ltd (FSA) this week.

FSA posted a third-quarter net loss of 121.8  million usd, compared with a year-earlier profit of 91.5  million.

FSA blamed losses of 190.9  million usd in its insured derivative portfolio, which consists mainly of insured credit default swaps. This compared with a year-earlier loss of 1.0  million usd.

KBC Group fell 2.45 Eur or 2.59% to 92.30, in line with other financials.

Elsewhere, supermarket group Delhaize was down 0.86 Eur or 1.32% at 64.41, while chemicals and pharmaceuticals group Solvay lost 1.19 Eur or 1.13% at 104.17.

Pharmaceutical and biotechnology group UCB inched down 0.31 Eur or 0.78% to 39.36. Sanofi-Aventis said the group's Xyzal drug has had an 'encouraging' start in the US since launching on October 1.

For the risers, specialty minerals group Umicore was up 3.86 Eur or 2.30% to 171.98, while national telecoms operator Belgacom edged up 0.16 Eur or 0.49% to 33.02.

Mobile telecoms group Mobistar went up 0.55 Eur or 0.89% to 62.21. Citigroup downgraded its rating on the stock to 'sell' from 'hold' and cut its target price to 51 Eur from 68 Eur citing poor performance relative to its peer group this year.

Meanwhile, utility Suez inched up 0.64 Eur or 1.44% to 45.13.

Outside the Bel 20, EVS was up 0.92 Eur or 1.18% to 79.17, after the broadcast equipment manufacturer secured a supply contract worth 3  million Eur with French language state broadcaster RTBF.

Telecoms group Telenet rose 0.93 Eur or 3.69% to 26.11. Citigroup initiated coverage with a 'buy' stance and price target of 24 Eur on a combination of strong management and improving market structure.

Thrombogenics was up 0.30 Eur or 3.51% at 8.85, after the biotechnology group published data which shows the potential of anti-PlGF (placental growth factor) agents to treat cancer.

In negative territory, imaging technology group Barco was down 0.25 Eur or 0.45% at 55.52, after KBC Securities cut its target price on the imaging technology group to 65.0 Eur from 75.0 following third-quarter results.

To The Netherlands next where in Amsterdam shares closed off their lows as Wall Street slowly turned less negative throughout Friday's session.

The AEX closed down 3.67 points or 0.68% at 537.25 after opening at 536.55 and reaching a late afternoon low of 534.30.

As mentioned a moment ago, Fortis was the leading decliner, falling 4.41% to 20.37 after the issue was slashed to 'sell' from 'buy' at UBS Securities citing Dexia's deteriorating newsflow and fundamentals. Belgian brokerage Bank Degroof however said that 'Dexia's current share price weakness (share price declined by 7% yesterday) is a good buying opportunity' and kept 'accumulate' rating.

Fellow financial ING was off 1.62% to 29.85 and Aegon shed 1.49% to 13.86 on reports that the group is preparing a 1  billion Eur offer for Swiss Life unit Zwitserleven, a report both companies denied. On the midcap, BinckBank added 2.20% at 15.82.

Temp stocks took a beating, with Randstad off 3.05% to 14.96 in the wake of Adecco's disappointing third quarter results. Dutch peer Vedior was 0.86% lower to 15.13 and USG People slipped 2.24% to 20.12.

Ahold shed 1.18% to 10.09.

Royal Dutch Shell closed off 0.91% to 29.44 while SBM Offshore lead AEX gainers, rising 3.73% to 27.52 and Fugro advanced 0.82% to 60.0.

DSM and Crucell were down 0.21% to 38.48 and off 0.88% to 13.56 respectively after the companies signed a non-exclusive PER.C6 technology research licensing agreement with Brazilian-based Recepta Biopharma.

Among tech related issues, Logica CMG led midcap decliners, down 2.60% to 2.25 and ASML slipped 0.29% to 23.83, while ASMI recovered earlier losses to close up 0.80% to 18.88, shrugging off ING reducing its price target to 19 Eur from 21.5 Eur. Philips gained 0.84% to 28.96 after the company said it is confident of interest in its 70% stake in MedQuist, after earlier saying it would sell the stake if satisfactory terms could be realised. Medquist then said it was evaluation the possibility of selling the company as a whole. Philips said the stake sale would likely result in a loss of about 320  million Eur (non-cash and non-tax deductible), to be presented under discontinued operations in Q4. Company spokesman Jayson Otke said the loss is due to exchange rate differences between the Euro and US Dollar now, and seven years ago when MedQuist was bought, 'and not because the unit has not been performing well.'

Other gainers included TNT, up 3.32% to 28.60.

Unilever added 2.03% to 23.62 after the company 'again surprised with better than expected results,' SNS Securities said, reiterating its 'buy' stance.

Corporate Express lifted 1.58% to 8.35.

Akzo Nobel was 1.31% higher to 57.25 still on yesterday's positive ICI Q3 results and with confidence rising that ICI shareholders will support Akzo Nobel's offer at ICI's EGM November 6.

BAM closed up 0.57% to 17.60, boosted by a 2  billion Eur civil engineering project launched by the Dutch government, seen as boosting the construction market as a whole, Rabo Securities said. A local trader said the share could also have been positively affected by new BAM unit Flatiron Constructors which have started work to replace the bridge that collapsed this summer in Minneapolis in the US. The unit could earn as much as 27  million usd in incentives if the bridge is completed ahead of schedule.

Tele Atlas was up 0.75% at 28.11 with a bidding war for the company heating up following a bid from Garmin, challenging TomTom's earlier one.

Local issue Macintosh rose 3.48% to 23.80 following an upgrade to 'buy' from 'accumulate' at SNS Securities, with the broker calling 'attractive' the proposed acquisition of Belgian shoe retailer Brantano.

Into Switzerland now and to Zurich where Swiss shares closed sharply lower, tracking Wall Street losses and weighed down by banking and luxury goods stocks which were at the receiving end of a series of rating and price target cuts.

The Swiss Market Index closed 121.08 points lower at 8,770.39 and the Swiss Performance Index was down 90.37 points at 7,182.38.

The Euro was higher against the Swiss franc at 1.6713 SFr and the Dollar down at 1.1528 SFr.

Shares of banking giants were under pressure throughout the day.

UBS closed sharply down, falling 2.50 SFr or 4.2% to 56.70, as Goldman Sachs cut its price target Friay.

Thursday, the stock was already sharply lower after Merrill Lynch said the Swiss bank could see a further 8  billion usd in subprime writedowns.

Banking peer Credit Suisse, also dropped 2.55 SFr or 3.4% to 72.45 after receiving a series of price target or rating cuts, following a mixed set of third quarter results Thursday.

Cuts came from Goldman Sachs, Bank Vontobel, Deutsche Bank, Sal Oppenheim and JP Morgan.

Richemont closed down 2.45 SFr or 3.0% at 79.05, and Swatch Group fell 4.75 SFr or 1.3% to 362.50, after SG Securities cut both stocks' ratings citing slower organic growth as demand weakens in the US and Asia from the fourth quarter of this year and into 2008.

Richemont's rating was cut to 'hold' from 'buy' and Swatch's to 'sell' from 'buy'.

Adecco fell 1.00 SFr or 1.4% to 70.10, as analysts were concerned over a fall in third-quarter revenue at the Swiss staffing group's French and US operations.

Earlier, the Swiss staffing group reported a third quarter net profit of 230  million Eur, up from 164  million in the same period last year, positively impacted by 12  million Eur of French social charge benefits and 28  million Eur lower income taxes.

The SMI also failed to find support from pharmaceutical heavyweights.

Roche too closed down 1.40 SFr at 194.40, while rival Novartis fell 0.70 SFr to 60.80.

Meanwhile, another heavyweight Nestle closed unchanged at 530 SFr.

On the upside, Synthes led the charts, closing up 1.10 SFr at 142.60.

ABB also ended the week up 0.22 SFr at 35.20. Earlier, there were speculations that the Swedish-Swiss engineering group was going to take over Schneider Electric.

Outside the SMI, Implenia was down 0.75 SFr or 2.1% to 35.25, after UK hedge fund Laxey Partners announced an offer for all outstanding shares of Implenia AG, offering 33.23 SFr per share, which was below yesterday's closing price of 36.00 SFr.

Laxey was obliged to make an offer in order to fulfill Swiss legislation, as its stake in Implenia exceeded a threshold.

After market closed, Implenia rejected the offer.

Neighbours Austria saw Vienna shares close sharply lower led by banking shares on ongoing credit concerns and steel processing company voestalpine, which mirrored the losses made across the broader metals sector on global growth fears.

The ATX closed down 2.22% or 107.95 points at 4,763.76. The ATX Prime closed 2.26% or 52.42 points lower at 2,268.08.

In very heavy trading Erste Bank retreated 3.91% to 53.81 Eur on the back of global credit fears and following a downgrade to US bank Citigroup today. Several large trades were reported dealt, one of note 2.7  million shares sold in a single block trade earlier and was probably an institutional closing their position, observers said.

Fellow heavyweight Raiffeisen International fell 1.70% to 111.16 Eur. Dealers said Raiffeisen's minimal exposure to asset and mortgage backed securities had prevented any greater sell-off.

Shares in steel company voestalpine were dragged lower by negative sentiment across mining and metals stocks, which took a knock on concern a US-led economic slowdown could lead to weakening demand for raw materials. Voestalpine shed 4.86% to 59.27 Eur.

Also feeling the pressure, engineering giant Andritz dropped 3.86% to 48.81 Eur. Earlier analysts at JP Morgan started it with a 'neutral' rating and target price 57 Eur.

A-TEC Industries slipped 0.64% to last deal at 166.93 Eur because of its exposure to the mining and metals industry.

Down on the surging price of oil, Austrian Airlines had 3.45% pared off its market value and last traded at 7 Eur. Analysts at Deutsche Bank earlier slashed their target price on the national carrier by 25% to 8.40 Eur because of the impact the rising cost of fuel will have on the airline.

Construction industry related shares moved in different directions. Last dealt at 40.91 Eur, bricks and roof tiles giant Wienerberger had 4.86% wiped off its share price, closing at 40.91, on the back of the poor situation in the US housing market, while Eastern European and Russia-focused Strabag closed 1.22% higher at 54.85 Eur.

Also one of the few constituents to end the session in positive territory, Telekom Austria gained 1.16% to 20.03 Eur after brokerage Bear Stearns reiterated its 'outperform' rating and increased target price to 24.80 Eur from 24 on the back of the companys 'increasingly attractive outlook'.

Drilling equipment company Schoeller Bleckmann Oilfield added 2.75% to 72 Eur on oil, while speculative stock BWIN ended the session 2.14% higher at 23.91 Eur.

Up into cooler climes now and to Scandinavia where this week we start with Finland where in Helsinki the market closed slightly lower amid thin newsflow, with mixed performance in industrial shares and falls among forestry stocks.

The OMX Helsinki 25 closed down 0.05% at 3,337.75 and the OMX Helsinki ended 0.09% lower at 12,454.81.

Volume was about 1.398  billion Eur.

Outokumpu closed down 2.29% at 24.72 Eur, Outotec down 2.92% at 52.50 Eur, Stora Enso R down 2.66% at 12.08 Eur and UPM-Kymmene shed 1.43% to 15.14 Eur.

Metso ended off earlier lows -- down 0.07% at 40.76 Eur after saying that it has won an order of an undisclosed value for a fibreboard production line in Turkey.

Rautaruukki K closed 0.82% firmer at 39.12 Eur.

The steel maker said its fourth-quarter operating profit is expected to fall by about 5  million Eur because of the strike by members of the Union of Salaried Employees.

Wartsila B added 1.09% to 57.40 Eur and Kone gained 1.98% to 58.66 Eur.

Kesko B closed down 0.90% at 40.76 Eur.

The retailer said it has cut its VV-Auto unit's sales and operating profit forecast in the fourth quarter to 'below earlier expectations' as passenger car deliveries will be postponed to next year due to a change in the Finnish Car taxation.

Sampo A outperformed, adding 1.81% to 21.93 Eur.

The insurer is reporting third-quarter results next week.

Neste Oil rose 3.60% to 25.59 Eur after Goldman Sachs added the stock to its 'conviction buy' list, a trader said.

Elsewhere, Kemira GrowHow finished 0.66% higher at 12.20 Eur.

Kemira GrowHow has filed for delisting from the Helsinki Stock Exchange after Yara International's stake in the company reached 100%.

The company has requested the listing committee approve the delisting at its meeting on 16 November.

Hopping across to Norway now, we go to Oslo where Share prices closed lower, led by Norske Skog and Schibsted on weaker-than-expected quarterly earnings, while Prosafe rose after its earnings beat expectations.

The OSEBX Benchmark index closed 2.80 points lower at 504.34 and the OSEAX All Share index was down 1.78 points at 586.88.

Total turnover amounted to 12.73  billion NKr.

Norske Skog closed 8.1 NKr lower at 49 on weaker-than-expected third-quarter results.

For the quarter, the Norwegian papermaker posted pretax profits of 280  million NKr, improving from last year's 3.779  billion NKr loss, but below the 474  million consensus forecast of analysts polled by TDN Finans.

At the operating level, profits came in at 208  million NKr, up from last year's 3.252  billion NKr loss, but below the 362  million consensus forecast. Sales, meanwhile, came in at 6.641  billion NKr, down from 7.192  billion last year and below the 6.918  billion figure penciled in by analysts.

Norske Skog blamed the weaker result on 'weaker price development in the regions Asia, Australia and South America, increased prices on recovered paper as well as a substantial negative effect from the strong Norwegian currency'.

The group also called for a 'higher degree' of consolidation in the paper industry.

Moody's Investor Service cut its rating for Norske Skog to 'Ba2' from 'Ba1' and placed all ratings on review for further possible downgrade.

Yara International added 2 to 201.5.

Schibsted fell 29 to 270. The company posted third-quarter profits below expectations at both the pretax and operating levels, after booking higher-than-expected investments restructuring costs during the quarter.

The media conglomerate posted operating profit of 120  million NKr, down from 174  million last year, and below the 208  million consensus forecast of analysts polled by TDN Finans.

Orkla was down 1.7 at 96.1.

Prosafe rose 1.9 to 96.9 after the group posted third quarter profits ahead of expectations at both the pretax and operating levels as it benefited from increased day rates and a higher level of fleet utilisation during the quarter.

Pretax profits came in at 54.0  million usd, up from 38.6  million last year, and ahead of the 52  million consensus forecast of analysts polled by TDN Finans.

At the operating level, profits came in at 70.3  million usd, up from 50.7  million last year, and well ahead of the 65  million consensus forecast. Sales, meanwhile, came in at 149.6  million usd, up from 112.0  million last year and ahead of the 134  million figure penciled in by analysts.

Petroleum Geo-Services added 1 to 157.5. Morgan Stanley initiated coverage of the stock at 'equal-weight' with a target of 180 NKr as part of a review of the oil services sector.

Fred Olsen Energy shed 2 to 275.5. The group's Dolphin Drilling subsidiary has been awarded a six month contract worth 65.7  million usd by Senergy for the use of the semi-submersible drilling rig 'Byford Dolphin'.

StatoilHydro fell 0.1 to 178, DNO was 0.13 lower at 10, Seadrill was down 3.5 at 125.5 and Frontline shed 7.25 to 235.25.

DnB NOR was 0.6 higher at 87.6 after several brokers raised their target prices for the stock, dealers said.

Carnegie upped its price to 94 NKr from 93 and increased its earnings estimates, while reiterating its 'outperform' recommendation following yesterday's third-quarter results.

Deutsche Bank increased its price target to 95 NKr from 90 on a reiterated 'buy' rating and Cheuvreux lifted DnB NOR's target to 110 NKr from 102.

Storebrand was unchanged at 76.5.

Telenor was unchanged at 125, having risen earlier in the session on rumours that Russian investment group Altimo's controversial stance over Ukrainian mobile operator Kyivstar may finally be thawing, dealers said.

Norsk Hydro added 1.8 to 79, while Aker Kvaerner was 1.75 lower at 178.75 and Aker Yards shed 0.5 to 88.25.

Into Denmark now and in Copenhagen where Share prices also closed lower, led down by DS Norden and DS Torm on prospects of falling freight rates, and by banks after Citigroup's downgrade.

The OMXC20 index closed 5.71 points lower at 494.85 and the OMXCB Benchmark index was down 4.47 points at 475.40.

The OMXC All Share index closed 5.02 points lower at 483.39 on turnover of 4.24  billion DKr.

DS Norden closed 44 DKr lower at 585 and DS Torm shed 3 to 209.5.

Amagerbanken advised investors to sell Norden on the prospect of falling bulk shipping freight rates. Torm, which has some bulk shipping exposure and, according to Trade Winds, has just ordered two more bulk vessels, was also affected by the bank's comment.

AP Moller-Maersk A fell 1,500 to 67,600 and the B-shares were down 1,400 at 68,600. Broker SEB Enskilda expects the group's Maersk Line to regain its lost shares of the US market by the time 2007 is over. SEB Enskilda has a 'buy' and a 78,200 DKr target price for the stock.

DSV added 0.25 to 131.5 on news it is selling its Broendby headquarters to Norway's Northern Logistic Property for 395  million DKr.

SEB Enskilda raised its target on the stock to 154 DKr from 144 to reflect the current number of shares following the group's share buyback.

Banking stocks were in focus after Citigroup's downgrade and by reports UK bank Barclays has suffered negative broker comment from Panmure Gordon and Goldman Sachs, with rumours circulating today that Barclays has had to go to the Bank of England for further funding, dealers said.

Danske Bank fell 1.75 to 217.5, Nordea Bank was 1.75 lower at 87.75, Roskilde Bank shed 7.5 to 455.5, Sydbank was down 2 at 228 and Jyske Bank shed 3 to 408.

Insurers were also hit, with Topdanmark falling 55 to 830 and TrygVesta shedding 2 to 403.

Vestas Wind Systems fell 5.5 to 450. Although broker SEB Enskilda expects the Danish wind turbine maker to post 'lumpy' third-quarter earnings on Tuesday because of supply-only orders and component constraints, the broker sees management reiterating its 2007 revenue guidance of 4.5  billion Eur, even though 59% of guided sales will have to be realised in the second half of this year.

William Demant Holding rose 1 to 461. Sydbank expects the group to reiterate its full-year forecast 12-18% growth in operating profit when it publishes its third-quarter trading update on Thursday.

The Danish hearing aid maker will not be publishing earnings figures, and brokers will be looking instead for comments of the sales development, especially of the new high-end product Epoq.

GN Store Nord added 0.5 to 55.

Novo Nordisk B was down 4 at 628. Chief financial officer Jesper Brandgaard told daily Boersen the group has 40  billion DKr available for acquisitions and is looking for bio-pharma candidates to strengthen its product and knowledge pipelines.

SEB Enskilda raised its target for the stock to 745 DKr from 680 on higher EPS forecasts for 2008-09, a higher free cash flow, a lower CAPEX and a lower tax rate.

Lundbeck fell 3.5 to 141.5 and Coloplast was 9 lower at 504.

Carlsberg B fell 8 to 686. According to daily Boersen, middle-sized institutional investors in Scottish & Newcastle have selling shares to hedge funds following the Carlsberg-Heineken bid, while the hedge funds expect a raised bid or a bid war.

Novozymes added 3 to 565, while Danisco was 1 lower at 393 and FLSmidth fell 10 to 547.

And rounding out the Nordic arena nicely this week, we go to Sweden where Stockholm stocks closed sharply lower in a truncated session ahead of a long weekend, hit by indications of a weak start on Wall Street and amid nervousness ahead of this afternoon's US employment data.

The OMX Stockholm index closed down 1.21% at 375.28, while the OMX Stockholm 30 finished 1.31% lower at 1,153.21. Turnover amounted to 12.688  billion SKr.

The market closed early yesterday for the All Saints Day weekend.

In total on the market, 68 shares closed higher, 51 unchanged, and 190 lower.

All of the main sub indices closed firmly lower with the exception of Telecommunication Services which covers the operators.

Ericsson B closed down 1.28% at 18.56 SKr, while among the operators TeliaSonera closed up 0.41% at 61.25 and Tele2 B unchanged at 147.50.

Skanska B gave up early gains to close down 1.19% at 124.75. Carnegie said it has raised its 2007 EPS estimates by 8%, its 2008 estimates by 3% and its 2009 estimates by 4.5% following Skanska results Thursday.

In the banking sector, Nordea closed down 2.33% at 108.90, Svenska Handelsbanken A down 1.21% at 204.50, Skandinaviska Enskilda Banken A down 2.92% at 183.00, and Swedbank A down 1.03% at 192.50.

The engineers also closed in negative territory, with Sandvik down 1.70% at 115.75, SKF B down 1.46% at 118.00, and Atlas Copco A down 2.15% at 102.50.

Elsewhere in the market, Volvo B closed down 2.28% at 118.00, Scania B down 2.07% at 165.50, SSAB A down 3.95% at 194.50, and Hennes & Mauritz B down 1.07% at 417.00.

Now heading South in Europe to warmer weather and we start with Greece where in Athens Greek shares closed higher and outperformed peer European bourses, led up by the banking sector.

The ASE general index closed 0.3% higher at 5,284.2 and the blue chip index grew 0.5% to 2,819. The mid-cap index closed flat at 6,701 and small caps grew 0.5% to 1,133.7. The banking sector index gained 1%.

Advancers outnumbered decliners 132 to 97 while 97 were unchanged in slightly below-average trade of roughly 386  million Eur.

Bank of Piraeus led blue chip gainers and jumped 2.2% to 28.12 Eur and the National Bank of Greece rose 1.4% to 47.28 Eur, both boosted by the positive sentiment in the domestic banking sector.

Marfin Popular Bank rose 1.1% to 11.14 Eur on continuing positive sentiment surrounding the bank after it was announced that Dubai Financial aims to acquire a 30% stake in the bank.

Titan Cement led blue chip decliners throughout the session and lost 1.4% to 32 Eur, continuing its downward trend after releasing worse than expected nine-month results.

Electricity utility Public Power Corp recovered its earlier losses to close unchanged at 27 Eur after announcing that its business plan will not be abandoned due to protests, adding that they are conducting further studies on the plan.

Chemical group Neochimiki closed 0.4% higher at 21.38 Eur and pharmaceuticals company Alapis grew 0.8% to 2.49 Eur. Both are expected to release their nine month results on Monday.

Bank of Cyprus ended 0.1% lower at 13.18 Eur. A Thomson Financial News analysts poll said it nine-month group net profit is seen jumping 57% year-on-year to 350  million Eur when it announces its results on Nov 8.

Cooler company Frigoglass fell 1% to 25 Eur.

Neighbours Italy saw Milan markets close flat.

The Mibtel index was down 0.05% at 30,981 points and the S&P/Mib off 0.02% at 39,706.

Volume traded was an estimated 5.435  billion Eur.

The market remained nervous after Thursday's sharp fall on weak bank sector results and negative broker comment on Citigroup, with banks unable to make a decisive upward bounce

Banco Popolare lost 1.93% to 15.84 Eur, also after UBS cut its price target to 18.4 Eur, from 20.0, while retaining its 'neutral' rating, and seeing a 'resilient' operating trend at the bank.

BMPS was down 0.88% at 4.28. UBS trimmed its price target to 4.30 Eur, from 4.45, keeping its 'sell' unchanged.

BPM was off 1.35% at 10.54 and Intesa Sanpaolo lost 1.23% to 5.295.

Unicredit was up 0.20% at 5.635 after yesterday's steep fall. Brokers said they continue to see volatile trading until results in 10 days clarify if the bank has unexpected negative surprises in store.

Generali was up 0.75% at 32.40.

Dollar stocks were mostly on the negative side. Luxottica was down 1.82% at 23.67. Brokers said this week's results were 'alright' but will remain depressed by the weak Dollar's impact on the company's sales.

Bulgari eased 0.08% to 10.72 after SocGen cuts its rating to 'sell', from 'hold'. Tod's lost 1.14% to 56.33. The French broker raised its rating on Tod's to 'hold', from 'sell.

Constructors were lower. Italcementi lost 1.51% to 15.39 ahead of next week's results. Buzzi Unicem lost 1.98% to 18.73.

On the positive side was Alitalia, up 2.76% to 0.917. Brokers said this was due to technical factors, such as short-covering, while fundamentals and newsflow for the airline remain negative.

Utilities were mostly higher on prospects for mergers and acquisitions. Hera rose 1.15% to 3.165 and AEM gained 1.88% to 2.93.

Snam Rete Gas rose 1.31% to 4.4575. Terna gained 0.93% to 2.715 after signing a deal on feasibility studies for a link to Croatia.

Telecoms were mixed, with brokers seeing Telecom Italia as a defensive stock, though in the short-term suffering from talks on management changes after Telefonica and Italian banks took control.

Telecom Italia was up 0.56% at 2.16.

Fastweb was off 0.94% at 30.39 after further negative broker comment on the stock in wake of weaker than expected results and lower full year guidance.

Seat PG was up 1.03% at 0.4015. Goldman Sachs cut the stock to 'neutral', from 'buy'. citing the company's growth outlook.

Fiat added 1.13% to 22.40 ahead of Italy new car registrations this evening, showing an overall market rise of 8.50%.

In the oil sector, Saipem was up 2.54% at 30.65.

Across to Spain and into Madrid now where Share prices closed higher in quiet trade, with many investors across Europe out on a long weekend.

The IBEX-35 index closed up 64.10 points at 15,823.70, after trading in a range of 15,652-15,862.

Trading was reasonably light with many investors out for a long weekend across Europe.

Telefonica rose 0.43 Eur or 1.89% to 23.16, boosted by positive newsflow on its struggle with Mexico's Telmex for dominance in the LatAm market and after ING raised its target price to 24.0 Eur per share from 18.0 Eur.

On the banking side, Sabadell was up 0.03 at 6.98, ahead of next week's Investor Day, while Banesto put on 0.02 to 13.84 and Santander rose 0.06 to 14.70.

BBVA bucked the trend, down 0.02 at 17.12, while Popular was also on offer, losing 0.15 to 11.66.

Selected energy stocks saw some interest on the buy side, with Iberdrola up 0.07 at 11.25 and REE advancing 0.07 to 38.74, while Enagas put on 0.18 to 19.58.

Iberia closed up 0.01 at 3.49, after British Airways said the BA-Texas Pacific Group (TPG) consortium was still working on a deal to purchase the Spanish flag carrier.

Other airline Vueling put on 1.01 or 6.52% to 16.51, once again showing a very volatile trend.

Tecnicas Reunidas fell 2.25 to 59.15, after Cheuvreux downgraded its stance to 'underweight' on valuation grounds.

And last but by no means least this week in Europe, we go to Portugal where in Lisbon Shares closed lower, in thin trade, as banks continued to track their European peers lower, and EDP weighed on the index, while Galp and PT outperformed.

The PSI 20 index closed down 94.12 points at 12,816.86 after trading in a range of 12,774-12,878 on a volume of around 235  million Eur.

Stocks opened lower after late declines yesterday on Wall street, paring losses in the first two hours of trade, but extending them again later and remaining under pressure at midday.

The domestic banking sector continued to track its European peers lower on credit crunch concerns, with BCP down 0.05 Eur or 1.53% at 3.22, BES 0.20 lower at 16.23, and BPI shedding 0.06 to 5.88.

Oil and gas group Galp was up 0.14 at 11.05, outperforming the index as dealers said investors are focusing more on the group's exploration and production potential and higher oil prices.

In the same sector, grid operator REN declined 0.02 to 3.48, while blue chip EDP fell 0.05 to 4.45, weighing on the index and retreating from yesterday's strong performance.

PTM lost 0.03 to 9.40, but off a low of 9.03 as traders said that investors are getting out of the stock ahead of Nov 7, the date when new PTM shares resulting from the spin-off from parent PT will start trading.

PT was up 0.02 at 9.13, while telecoms peer Sonaecom was flat 3.81.

Brisa declined 0.09 to 9.64. Earlier, the company said the AEDL-Auto-Estradas do Douro Litoral consortium, in which it has a 55% stake, has been awarded the Douro Litoral motorway concession in northern Portugal with a 987  million Eur bid.

Construction stocks were weak, with Mota Engil shedding 0.06 to 5.46, and small cap Soares da Costa falling 0.02 to 2.31.

UK Market - The global sell-off on equities markets continued in London on Friday, as investors pulled more money out of financial stocks amid fresh worry about losses relating to the US subprime lending crisis.

Despite some relief in the wake of stronger-than-expected US employment data, the FTSE 100 closed 0.8% weaker at 6,530.6, off session lows of of over 1% as initial gains on Wall Street markets faded.

In London Barclays was the biggest loser, down 6.0% to 537½ p, around a two-year low. Rumours that the high street lender was poised to ask the Bank of England for an emergency credit line were widely dismissed by traders, noting its continued share buyback.

Northern Rock fell back 0.7 to 171.3, Royal Bank of Scotland was off 23 at 475-1/2, Alliance & Leicester was 21-1/2 lower at 730-1/2, HBOS gave away 19 to 825 and Lloyds TSB was down 13-1/2 at 517-1/2.

British Sky Broadcasting was 30 pence lower at 660 after first-quarter results failed to impress investors.

The company reported first-quarter revenues of 1.185  billion stg, up from 1.074  billion last time, while operating profit slumped 21% to 143  million, which includes 51  million stg investment in Sky Broadband and Sky Talk, from 180  million last time.

Investec analysts said the shares have run ahead and could drift slightly, although the broker's fundamental view remains positive.

Investec highlights the group's better-than-expected churn rate, but also its improved SkyPlus take-up which has incurred higher short-term costs, although this will line up the company for medium-term benefits.

And British Airways fell back 11-3/4 to 418-1/4 after the group saw a strong rise in first-half pretax profit rise but guided for lower revenue growth.

BA said fuel costs 'remain a major challenge' and said the carrier's fuel bill for the year was expected to top 2  billion for the first time.

BA said it had revised its revenue guidance to 3-3.5% because of the continued weakness of the US Dollar, but said it sees 'every possibility' of achieving its 10% operating margin by March 2008.

The mining sector was also lower as investors worried that a slowing US economy would hit commodity prices.

Kazakhmys was down 13 at 1,406, Vedanta Resources fell back 6 to 2,186, Antofagasta edged 7 pence lower to 803, Rio Tinto edged back 41 at 4,365 and Xstrata was off 23 at 3,307.

High oil prices, still near a record, boosted energy shares, among the small number of gainers. New York's main futures contract, light sweet crude for delivery in December, was trading at 93.96 usd a barrel, up 47 cents from its close of 93.49 usd in US trade yesterday.

Brent North Sea crude for December traded at 90.70 usd, up 98 cents.

Tullow Oil led the leader board -- up 18-1/2 at 644-1/2 -- and index heavyweight BP was 8-1/2 pence higher at 627-1/2.

A broker upgrade helped Diageo gain 3 at 1,092, after Lehman Brothers upgraded the group to 'equal-weight' from 'underweight'.

Lehman Brothers said that with consolidation in the beer industry well underway, it believes that the realisation of Diageo's aspiration to become a leader in Total Beverage Alcohol (TBA) is getting closer.

Investors were also turning to defensive stocks as a safe haven with Unilever gaining 34 at 1,730, helped by yesterday's strong Q3 numbers.

Other companies with defensive characteristics were also higher, with Reckitt Benckiser up 21 at 2,766.

But British American Tobacco slipped back 34 pence to 1,793 pence after Dresdner Kleinwort cut its rating on the shares to 'hold' from 'buy' and Merrill Lynch cut its rating to 'neutral' from 'buy'.

Turning to the mid caps, on the upside, Wellstream was the top riser, up 70 at 995 after Credit Suisse reiterated its 'outperform' rating and raised its 2008-10 EPS estimates and target to 1,100 pence from 800 pence.

The broker said this was on the back of higher capacity in Brazil and slightly more bullish pricing assumptions.

While Alfred McAlpine was given a late afternoon boost, moving 15-1/2 higher at 567 after news that it had granted limited due diligence for Carrilion to pursue an offer for the company.

On the 250 downside, New Star Asset Management fell 17 pence to 312-1/4 as dealers noted talk that Citigroup is placing 4.3  million shares in the group at 309 pence per share.

No further details were immediately available.

Finally, Henderson Group gave away 9 to 171-1/2, with Evolution Securities repeating its 'sell' stance and 142 pence price target this morning, as the broker does not see sustainability in the shares link with its Australian listing.

Japan & Asia Pacific - Asian markets plummeted Friday, tracking the overnight plunge on Wall Street, due to renewed worries about fallout from the subprime loan problems in the US and the outlook for the world's largest economy.

So let's take a closer country-by-country look.

Japan ese shares closed sharply lower Friday led by financials.

The blue-chip Nikkei 225 Stock Average closed down 352.92 points or 2.1% at 16,517.48, off a low of 16,484.54. The index was up a marginal 0.1% over the trading week.

The broader TOPIX index dropped 35.61 points or 2.2% to settle at 1,600.17, off a low of 1,597.54. The index gained 1.7% over the week.

Decliners overwhelmed gainers 1,423 to 239, with 57 issues unchanged.

Volume inched up to 2.08 billion shares from 2.07 billion Thursday.

Shares of major banks were sharply lower, with Mitsubishi UFJ Financial Group falling 67 Yen or 6.0% to 1,052, Resona Holding down 18,000 Yen or 8.1% at 204,000, Sumitomo Mitsui Financial Group declining 55,000 Yen or 6.0% to 868,000 and Mizuho Financial Group 37,000 Yen or 5.8% lower at 607,000.

Among brokerages, Nomura Holdings fell 92 Yen or 4.4% to 1,993, Daiwa Securities declined 59 Yen or 5.4% to 1,041 and Nikko Cordial Group dropped 64 Yen or 3.9% to 1,592.

Mazda Motor shed 18 Yen or 2.6% to 686. After the closing bell, the auto maker said its operating profit grew 4.8% to a record in the first half, driven by brisk sales in North America and other overseas markets, and by a weak Yen.

Among other automakers, Nissan Motor fell 80 Yen or 5.8% to 1,301, Toyota Motor declined 270 Yen or 4.0% to 6,480 but Mitsubishi Motors was up 2 Yen or 0.9% at 232.

Caio Computer slipped 5 Yen or 0.5% to 1,116. The maker of watches and electronic devices said Friday its net profit dropped 54.3% in the first half from a year earlier, hit hard by smaller-than-expected sales of its cellular phone handsets.

Elsewhere, Sony was down 160 Yen or 2.7% at 5,670, Canon fell 160 Yen or 2.7% to 5,800 and Pioneer was 45 Yen or 3.5% lower at 1,247.

Hong Kong was also heavily down along with its Regional counterparts.

Property stocks bore the brunt of profit-taking pressure as the sector had posted huge gains in the run-up to the US Federal Reserve's interest rate cut on Wednesday.

Large-caps HSBC and China Mobile tracked falls in their American Depositary Receipts, while China financials were hit by concerns that Beijing may take steps, including ordering the country's national pension fund to trim its equity holdings, to cool the mainland markets.

The Hang Seng Index closed down 1,024.54 points or 3.25% at 30,468.34, off a low of 30,366.69 and high of 30,922.31. For the week, the index is up 63 points or 0.21%.

Today's showing marks the index's biggest one-day points drop since October 22, when it fell 1,091 points.

Turnover was 152.35  billion hkd.

The property sub-index fell 1,768.36 points or 4.78% to 35,237.30.

Cheung Kong lost 8.30 hkd or 5.57% at 140.60, Henderson Land was down 3.55 hkd or 5.13% at 65.65, Sun Hung Kai was down 6.80 hkd or 4.66% at 139, Sino Land down 0.25 hkd or 1.02% at 24.20 and Wharf Holdings fell 1.90 hkd or 4.05% to 45.

Profit-taking was set off in China financials amid reports that China's Social Security Fund is cutting its investment in stocks and speculation that Beijing may be seeking to induce consolidation in its overheated stock markets, Gorges said.

China's National Council for Social Security Fund has reportedly ordered its investment managers to cut their stock positions to less than 70% of portfolios within a month.

Among China financials, Bank of Communications was down 0.32 hkd or 2.36% at 13.22, ICBC fell 0.29 hkd or 4.07% to 6.83, China Citic Bank was down 0.09 hkd or 1.38% at 6.43 and China Life lost 1.65 hkd or 3.18% at 50.20.

Bank of China was down 0.13 hkd or 2.5% at 5.06 after hitting an all-time-high of 5.23 yesterday.

Among large-caps, HSBC fell 3.70 hkd or 2.43% to 148.30, China Mobile was down 5.30 hkd or 3.37% at 152.20 and Hutchison Whampoa gave up 5.45 hkd or 5.68% at 90.55, while Hong Kong Exchange was up 4.60 hkd or 1.76% at 265.60.

In the banking sector, Hang Seng Bank was down 5.80 hkd or 3.77% at 147.90, Bank of East Asia fell 1.85 hkd or 3.61% to 49.45 and BOC Hong Kong down 0.60 hkd or 2.65% at 22.05.

HSBC, Hang Seng Bank, BOC (Hong Kong), Bank of East Asia and Standard Chartered Bank announced quarter-point reduction in their prime lending rates following the US rate cut on Wednesday.

NetDragon, a mainland online game company, ended at 6.52 hkd, up 25.34% from its IPO price of 13.18, on its debut on the GEM board. It opened at 19 hkd.

Another new listing Ming Fai International was at 2.80 hkd, down 6.0% from the IPO price of 2.98, on its main board debut. It opened at 2.85 hkd.

Lenovo was up 0.19 hkd or 2.22% at 8.74 after announcing that its fiscal second-quarter to September net profit surged to 105.3  million usd from 37.9  million a year earlier due to strong PC sales.

Here on the Mainland, China A-shares closed sharply lower led by energy and steel stocks, with domestic investors worried about liquidity and index readjustments due to upcoming major IPOs, and following sharp falls in overseas bourses.

PetroChina will list on the Shanghai Stock Exchange on Monday and join major indices soon, leading many funds to sell parts of their portfolios to make room for the new large cap.

Liquidity will remain tight with China's securities regulator due to review China Railway Engineering Corp's initial public offering plan on Monday. The IPO involves the issue of up to 4.68  billion A-shares.

The benchmark Shanghai Composite Index closed down 136.48 points or 2.31% at 5,777.81.

Turnover fell to 106.03  billion RMB from 110.77  billion in the previous session.

Baoshan Iron & Steel Co Ltd lost 1.02 RMB to 16.84, and Maanshan Iron & Steel Co Ltd shed 0.67 RMB to 9.38.

Energy stocks underperformed with Henan Shenhuo Coal Industry & Electricity Power Corp Ltd falling 5.05 RMB to 61.80.

Datong Coal Industry Co Ltd slid 2.53 RMB to 30.19.

However, China Petroleum & Chemical Corp (Sinopec), Asia's largest oil refiner, rose 0.79 RMB to 28.49, following a 7.32% rise yesterday after China raised oil product prices.

CITIC Securities Co Ltd surged 10.56 RMB or by the 10% daily trading limit to 116.49 after returning from a suspension in connection with its Bear Stearns alliance.

The Shanghai A-share Index fell 143.88 points or 2.32% to 6,065.53 and the Shenzhen A-share Index was down 44.37 points or 2.96% at 1,452.48.

The FTSE/Xinhua China A 50 Index was down 500.20 points at 22,421.93, and the FTSE/Xinhua China A 200 Index was down 448.10 points at 15,841.23.

The Shanghai B-share Index fell 2.92 points or 0.78% to 371.41 on turnover of 812.54  million usd and the Shenzhen B-share Index lost 0.17 points or 0.02% at 784.17 on turnover of 895.17  million hkd.

In Seoul, South Korean shares closed sharply lower on Friday as both institutional and foreign investors were in a selling spree.

The market had managed to recover from heavy losses by midday as institutions and retail investors chased bargains but stocks tumbled again soon after as sellers reigned in the region including Japan.

The KOSPI closed down 43.8 points or 2.1% at 2,019.34, after trading between 2,014.65 and 2,049.44.

Trading was relatively active, with 382 million shares worth 8.6 trillion won changing hands.

Decliners more than doubled advancers, 568 to 245.

Institutions and foreign investors were net sellers of shares worth 269 billion won and 251.3 billion won, respectively, while retail investors were net buyers of 413.5 billion won worth.

Financials were hit hard. Kookmin Bank tumbled 2,300 won or 3.2% to 70,000 won, Shinhan Financial slid 1,800 won or 3.1% to 56,700 won and an Woori Financial tumbled 1,050 won or 5.6% to 17,700 won.

Samsung Corp edged 600 won or 0.7% to 86,700 won after its consortium with the state-run National Pension Service secured a 28 trillion won development project from Korea Railway.

LG Chem jumped 6,500 won or 5.6% to 122,000 won on hopes it will benefit from its merger with LG Petrochemical.

Mirae Asset Securities soared 13,500 won or 7.6% to 191,000 won, extending its rally for a third day, after releasing upbeat quarterly results earlier in the week.

Korean Air jumped 2,900 won or 3.5% to 85,700 won on expectations that the airline would be able to increase oil surcharges amid rising fuel prices.

STX Pan Ocean gained 85 won or 2% to 4,420 won on strong shipping charges.

Samsung Engineering soared 9,000 won or 7.8% to 124,000 won on hopes it will win more contracts from oil-rich Middle East countries as crude prices surge.

In The Philippines , Manila markets were closed Friday for a public holiday.

At the close on Wednesday, Manila's composite index was down 24.46 points or 0.7% at 3,758.97.

The broader all-share index fell 5.05 points or 0.2% to 2,349.83.

In Taiwan , Taipei could not escape the declines either. Selling was across the board, with the heavily weighted electronics and financial sectors both dropping by more than 3.0%.

The weighted index closed down 325.14 points or 3.39% at 9,273.09, off a low of 9,248.34. The high was 9,433.07.

Turnover was at 172.94  billion twd.

For the week, the index sustained a cumulative loss of 358.42 points or 3.72%.

On the Taipei bourse, decliners led risers 1,962 to 243, with 123 stocks unchanged.

A total of 45 stocks closed limit-down and 12 limit-up.

The electronics sector plunged 3.68% and financials tumbled 3.25%.

The cement sector slumped 3.84%, food slid 3.11%, paper fell 2.57%, plastics/petrochemical dropped 2.52%, textiles lost 2.49%, and construction shed 1.76%.

The Taiwan Dollar closed the morning at 32.414/Dollar, compared with the previous close of 32.390.

MediaTek closed imit-down 44.00 twd or 6.91% at 593.00 after the microchip designer announced a weaker-than-expected outlook for the fourth quarter to December following a strong performance in the third quarter.

UMC was down 0.65 twd or 3.19% at 19.75 and TSMC down 2.60 twd or 4.05% at 61.60.

Select LCD makers rose on promising earnings prospects as demand remains strong, with Chi Mei Optoelectronics up 0.35 at 47.00.

AU Optronics was down 1.10 twd or 1.63% at 66.50, Innolux was down 7.00 twd or 4.52% at 148.00, and Chunghwa Picture down 0.55 twd or 4.37% at 12.05.

Cathay Financial lost 3.60 twd or 4.31% to 80.00. The company said earlier its core unit Cathay Life has no need to book any impairment in the value of its 31.97  billion twd of collateralized bond obligation holdings.

China Airlines was down 0.25 at 14.65 and EVA Air was down 0.10 at 13.35, but their losses were limited because of news that Taiwan airlines have been allowed to raise fuel surcharge on international passenger routes to help them cope with surging fuel costs, effective from November 15.

Singapore never bucked the regional trend either, with the benchmark Straits Times Index declining 88.24 points or 2.3% to 3,715.32, after swinging between a low of 3,695.94 and a high of 3,746.98 points. The index lost 56.23 points or 1.5% during the week.

Traded volume reached 2.4 billion shares valued at 2.9 billion Singapore Dollars.

Decliners outnumbered gainers 656 to 177, with 1,820 stocks unchanged.

Banking stocks retreated. DBS Group was down 1 Singapore Dollar at 21.60 Dollars and United Overseas Bank 40 cents lower at 20.80 Dollars. Oversea-Chinese Banking Corp also fell 15 cents to 8.85 Dollars.

Although Singapore banks' exposure to collateralized debt obligations (CDOs) is small, investor sentiment in the sector will be dictated largely by developments in the US financial markets.

Property stocks also fell as investors turned cautious following the government's latest measure to cool the booming Singapore property market.

The government last Friday withdrew the deferred payment scheme for buyers of property under construction. Analysts say this was meant to discourage speculative buying in the market, which has sent property prices soaring in the past several months.

CapitaLand was down 30 cents at 7.90 Dollars, City Developments down 30 cents at 15.10 Dollars. Wing Tai fell 8 cents to 3.12 Dollars, and Wheelock declined 5 cents to 2.39 Dollars.

Shipyard operator SembCorp Marine was down 6 cents to 4.52 Dollars, despite strong third quarter results, as investors worried about its potential foreign exchange losses.

The company said its unrealized losses were 220 million US Dollars, higher than the 165 million it warned about on October 22, as a result of unauthorized transactions made by former group finance director Wee Sing Guan on behalf of its subsidiary, Jurong Shipyard. It is disputing the loss and has declined to provide more details on the matter, citing ongoing investigation and potential litigation.

Oil-sensitive transportation stocks were also lower. Singapore Airlines retreated 40 cents to 19.30 Dollars, and Neptune Orient Lines was 32 cents lower at 4.98 Dollars.

Unscathed by the negative mood, market debutante ARA Asset Management, a Hong Kong-based real estate fund, closed at 1.25 Dollars, above its initial offering price of 1.15 Dollars.

Next door in Kuala Lumpur, Malaysian shares closed lower Friday on profit-taking after the steep sell-off in New York overnight, but the key index managed to end off its lows on a rebound in plantation stocks and resilience in small caps.

Investor sentiment stabilized later in the day after an initial selldown saw the key index losing as much as 23 points.

The Kuala Lumpur Composite Index closed the session down 11.68 points or 0.8% at 1,397.48, off a low of 1,385.85.

For the week, the KLCI inched down 0.9 of a point.

The FTSE Bursa Malaysia 30-large cap index lost 55.68 points or 0.6% to 8,789.11 and the second board index fell 0.7 point or 0.6% to 109.98.

Decliners led gainers 599 to 238, with 274 stocks unchanged.

Trading volume was 1.4 billion shares valued at 1.8 billion Ringgit.

In Bangkok, Thailand , no regional change here either as the markets succumbed to Wall Streets' lead.

The Stock Exchange of Thailand (SET) composite index fell 8.39 points or 0.93% to 894.34 and the blue-chip SET 50 index lost 7.34 points to 661.86.

Losers led gainers 211 to 118, with 117 stocks unchanged on turnover of 1.6 billion shares worth 22.3 billion Baht.

The Thai Baht closed at 33.99-34.01 to the Dollar, hardly moved from Thursday's finish. Against the Euro, the Thai currency was quoted at 49.22-27 from 48.90-96.

Thailand's top energy firm dropped 12.00 Baht to 404.00, and its subsidiary PTT Exploration and Production fell 2.00 to 159.00. Thai Oil was unchanged at 95.50.

The kingdom's top lender Bangkok Bank lost 1.00 to 122.00.

Thai Airways International edged down 0.25 to 39.00, but Thailand's biggest mobile phone operator, Advanced Info Service, rose 1.50 to 89.50.

Indonesian shares closed mixed Friday, with the main index finishing at a new record after select big caps bounced back, helping the index reverse course after its heavy losses in early trade.

The index quickly lost 67.81 points or 2.5% earlier in the day as investors opted to lock in profits in reaction to Wall Street's steep losses overnight. But buying in big caps later emerged, sending the index back to positive territory before the close.

The composite index was up 5.96 points or 0.2% at 2,710.62, surpassing the previous all-time high of 2,704.66 set yesterday. For the week, the index gained 86.19 points or 3.3%.

The LQ45 index was up 3.06 points at 596.19. Volume was 4.25 billion shares worth 7.53 trillion Rupiah.

But decliners outnumbered advancers 116 to 57, with 69 stocks unchanged.

The Rupiah was trading at 9,130/9,135 to the Dollar, down 0.4% from late Thursday.

Telkom is the biggest stock in Jakarta with a market capitalization nearly 13% of the total. The stock gained 250 Rupiah or 2.2% to 11,400 Rupiah, rebounding off an intraday low of 10,800 Rupiah.

Nickel miner Inco was the second biggest index mover today as it extended its record-setting rally. The stock rose 3,900 Rupiah or 3.8% to 106,000 Rupiah, off a high of 117,000 Rupiah and a low of 97,000 Rupiah.

Investors bought Inco in anticipation of its interim dividend payment next month and on hopes the company's planned stock split will drive its share price even higher.

Among other gainers, the country's sixth largest coal miner Bukit Asam rose 650 Rupiah or 6.8% to 10,150.

Bucking the trend, crude palm oil producer Astra Agro lost 300 Rupiah or 1.3% to 22,950 on profit-taking, while Bank Central Asia fell 150 Rupiah or 2.0% to 7,300 Rupiah.

Indian shares also ended higher as heavy buying in blue-chip shares during the last hour of trade pulled up the key index which was dragging its feet at levels over 450 points in the red. The country's largest lender, State Bank of India, hogged the limelight, rising 9% after winning government approval to sell stock through a rights issue.

The Bombay Stock Exchange's benchmark Sensex ended 1.28% or 251.88 points higher at 19,976.23. It had dropped to a low of 19,255.77 points, a loss of 469 points for the day after an overnight plunge on Wall Street dampened local sentiment.

The National Stock Exchange's S&P CNX Nifty ended 1.12% up at 5,932.40 points.

Among the BSE-30, 21 shares gained and 9 lost. In the broader market, 1,403 shares advanced, 1,337 declined and 62 were unchanged.

As in recent days, this session too was choppy. Both indices began the day on an extremely weak note on weak global cues, but immediately pared these losses as bargain-hunters stepped in.

The Sensex has risen over 25% since the US Federal Reserve cut interest rates for the first time in four years on Sept 18 in a move that increased the attractiveness of fast-growing emerging markets.

Banking shares, which were floundering at the start of the session, saw heavy demand towards the close as demand for SBI shares pulled up those of other lenders.

State Bank of India rose 8.74% to end at 2,251.75 Rupees on reports that the Indian government has okayed its proposal to sell shares to existing members.

India's largest bank said it plans to raise 200  billion Rupees in late-October to meet the growing demand for credit in an economy which the central bank has forecast will grow at 8.5% this fiscal.

ICICI Bank gained 2.44% to 1,330.60 Rupees and HDFC Bank added 4.97% to 1,758.75 Rupees.

Engineering and construction giant Larsen & Toubro Ltd rose 0.78% to 4,461.05 Rupees after the company said it has formed a joint venture with US-based Gulf Interstate Engineering Company. The new venture - 'L&T - Gulf Pipeline Engineering Pvt Ltd' will be located at L&T's existing facilities in the northern Indian city of Faridabad.

Mobile telecom service company Bharti Airtel Ltd fell 5.10% to 894.85 Rupees after a report that India's Department of Telecommunications has accepted recommendations to tighten subscriber-linked norms for GSM spectrum allocation.

Smaller rival Idea Cellular Ltd shed 1.17% and ended at 131.25 Rupees on similar concerns.

Down under now and to Australia where Sydney markets closed broadly lower on the US's sell-off.

The S&P/ASX 200 fell 132.1 points or 1.9% to end at 6,696.6, off the day's low of 6,677.3. The benchmark index's high for the day was 6,782.2. For the week, the index dropped just four points.

The All Ordinaries index lost 126.9 points or 1.9% to 6,726.7.

Volume traded was 1.86 billion shares worth about 6.9 billion Australian Dollars. Decliners outstripped gainers 893 to 414, with 344 stocks unchanged.

The S&P/ASX 200 December futures contract was down 150 points at 6,693.

The yield on the 10-year bond eased 0.093%age point to 6.202%, while the yield on 90-day bills gained 0.005%age point to 7.018%.

Index leader BHP Billiton dragged the market down, falling 1.90 Australian Dollars or 4% to 45.00 Dollars, as investors worried that a slowing US economy would hit commodity prices.

Rio Tinto was also caught up in the negative sentiment, dropping 4.04 Dollars or 3.5% to 110.96 Dollars.

The banking sector was also a victim. National Australia Bank dropped 40 cents to 43.10 Dollars, Commonwealth Bank fell 45 cents to 61.20 Dollars, ANZ dropped 44 cents to 29.98 Dollars and Westpac lost 58 cents to 30.48 Dollars.

Stocks sensitive to the Australian Dollar were also sold off as currency rose ahead of next week's expected rate hike.

The Reserve Bank of Australia is expected to hike its cash target rate by a quarter%age point to 6.75% next Wednesday in a move aimed at reducing inflationary pressures.

Global pallet supplier Brambles lost 30 cents or 2.1% to 13.95 Dollars while vaccine group CSL dropped 1.25 Dollars or 3.5% to 34.55 Dollars.

Ansell, which supplies the world with protective gloves and condoms, fell 22 cents or 1.8% to 12.34 Dollars despite reassuring the market that it was set to restore earnings growth.

The company told shareholders at its annual meeting that its strong balance sheet would support growth through acquisitions as well as organic growth.

Oil stocks were not insulated by the market even though oil prices remained at near record levels.

Sector leader Woodside Petroleum ended down 44 cents or 0.8% at 51.80 Dollars and Santos lost 56 cents or 4.1% to 13.22 Dollars.

And rounding out Asia this week, we go to New Zealand where the picture looked no happier on Friday.

The benchmark NZX-50 index closed down 53.76 points or 1.3% at 4,154.12 on turnover worth 113.09 million New Zealand Dollars.

Top stock Telecom shed 11 cents or 2.6% to 4.17 Dollars after it reported that its fiscal first-quarter net profit was unchanged at 225 million Dollars from the same period last year.

Fletcher Building fell 32 cents to 11.68 Dollars, Contact Energy was down 4 cents at 9.00 Dollars and Fisher & Paykel Appliances lost 8 cents to 3.48 Dollars.

F&P Healthcare was 6 cents lower at 3.17 Dollars and Auckland Airport was off 1 cent at 2.87 Dollars.

Air New Zealand was one of few leaders to advance, up 3 cents at 2.15 Dollars despite rising oil prices.

Commodities - Gold surged through the $800 an ounce level Friday for the first time in 28 years as investors sought refuge from a second wave of credit turbulence.

Renewed US Dollar weakness and fears about an inflation spike after crude oil prices jumped to more than $95 a barrel also contributed to gold's strength.

Spot gold in London rose to $807.30, the highest level since January 1980, when it hit a record high of $850 as the Dollar hit a record low against the Euro of $1.4528. Bullion has gained 26% since January.

The start of the Indian festival season next week, traditionally a strong gold-buying period, was underpinning prices even as traders warned that jewellery de-mand in India, the world's biggest gold consumer, is suffering from high prices.

The World Gold Council re-cently cut its demand forecast for India this year from an increase of 40% to 20-25%.

Precious metals traders said Japanese investors were active buyers in spite of warnings that the speculative betting on further price increases had left the market exposed to a correction.

Investors seeking a safe haven have increased their gold holdings through exchange-traded funds by 32% since the beginning of the year to 824 tonnes. Precious metals are being bought as a hedge against Dollar weakness, inflation and geopolitical risks.

Western countries, Russia and China on Friday agreed to push for new sanctions against Iran unless Tehran addressed their concerns about its nuclear programme before the end of the month.

Platinum rose to $1,454 an ounce, just below a record high of $1,450 reached earlier this week, while silver rose to $14.63, its highest price since February.

Oil prices set new records this week with a move towards the $100 mark appearing increasingly likely.

Oil hit a record $96.24 a barrel late on Wednesday, following an unexpected drop in US crude inventories last week that left them at their lowest in two years.

Nymex December West Texas Intermediate rose $1.58 to $95.07 a barrel Friday, gaining 3.4% this week.

ICE December Brent gained $1.74 to $91.46 a barrel, rising 3.1%.

Standard & Poor's said Friday it had significantly increased the weight of Nymex RBOB gasoline futures in the S&P GSCI index, the most widely followed commodities benchmark that is tracked by about $70bn worth of investments from institutions, such as pension funds.

The gasoline contract will have a weighting of 4.55% of the total index from 2008, up from 1.37% this year.

Nymex December RBOB unleaded gasoline jumped 7.8 cents to $2.4215 a gallon, up 6.5% this week.

US heating oil prices hit a record Friday with stock levels approaching winter causing concern. US heating oil stocks stand at 15.7m barrels, or 24.9% below last year's levels. Nymex December heating oil rose 6.2 cents to $2.5746 a gallon, a record Friday, up 5.8% this week.

In base metals, copper fell 5.1% to $7,465 a tonne over the week, under pressure from rising LME stocks.

Zinc sank 4.6% to $2,765 a tonne, also under pressure from large stock increases and concerns that global mine production could rise by about 18% over the next two years as barriers to entry in the zinc industry remain low.

Currencies - The Dollar plumbed fresh depths this week as a rate cut from the US Federal Reserve kicked away more yield support for the beleaguered currency.

The Fed trimmed interest rates by 25 basis points to 4.5% after its policy meeting on Wednesday, a move widely expected by the markets.

The Fed moved to a neutral monetary policy bias in its post-decision statement, saying it judged that the “upside risks to inflation roughly balance the downside risks to growth”.

The central bank also stated that “strains in financial markets have eased somewhat on balance”.

However, analysts said that statement was up for debate after the sudden upturn in risk aversion on Thursday amid fears that large financial institutions had not revealed the true scale of losses relating to the crisis in the US subprime mortgage market.

Indeed, the turmoil helped the market lift the probability of a rate cut at the Fed's December 11 meeting to about 70%.

The Dollar fell to a record low of $1.4525 against the Euro Friday, before pulling back to stand at $1.4490.

This took the Dollar's losses to 0.7% against the Euro over the week, in spite of a brief rally on Thursday at the height of the panic surrounding the financial sector.

Thursday's round of risk-reduction revealed where traders had accumulated the largest positions in recent weeks, with investors moving to remove carry trades, in which the purchase of higher-yielding assets are funded by selling low-yielding currencies. Dollar strength was clearly one theme, in particular against higher-yielding currencies. On the other hand, low-yielding major currencies, like the Yen and the Swiss franc, also strengthened in synch with the Dollar, suggesting the latter is increasingly assuming the role of a funding currency for FX carry trades.

Indeed, after better-than-expected US jobs data Friday, the Dollar quickly gave up its initial gains, with analysts saying the corresponding pick-up in risk appetite was putting the currency under pressure.

Over the week, the Dollar fell 3% to a fresh record low of C$0.9327 against the Canadian Dollar as expectation-beating jobs data and surging oil prices supported the loonie.

The Dollar also fell 0.9% to SFr1.1540 against the Swiss franc and struck a 24-year low against the Australian Dollar, falling 0.2% to $0.9200 on the week.

Meanwhile, Sterling soared 1.5% to a fresh 26-year high of $2.0869 against the Dollar as hawkish speeches from Kate Barker and Charles Bean, both members of the Bank of England's monetary policy committee, quashed hopes that the Bank would cut UK interest rates at its meeting next week.

The Pound rose 0.9% to £0.6958 against the Euro and 1.8% to Y238.95 against the Yen.

The Yen lost ground elsewhere after the Bank of Japan left interest rates unchanged at 0.5% and lowered its forecast for both growth and inflation in its semi-annual economic outlook.

The Yen fell 0.5% to Y114.80 against the Dollar, lost 1.1% to Y166.28 against the Euro and dropped 0.5% to Y105.40 against the Australian Dollar over the week.

The South African Rand was steady and even marginally firmer in late trade as the Dollar reversed some of its earlier gains posted in the wake of better-than-expected US employment data. The Rand was bid at 6.5780 to the Dollar from its overnight close of 6.5921, but was around 11 cents weaker than its intraday best level Thursday. It was bid at 9.5262 to the Euro from a previous 9.5158 and at 13.6990 against Sterling from 13.6875 before.

And rounding out currencies this week, here in China the RMB finished at 7.4558 to the Dollar on the over-the-counter (OTC) market, compared with Thursday's record close of 7.4543.

China - The People's Bank of China (PBoC) signalled its intent to continue tightening monetary policy with this week's bill sale.  With all the rhetoric and other actions from Beijing, I think this is signalling an imminent rate hike - could be as soon as this weekend possibly.

This week the PBoC auctioned one-year bills at 3.6055%, up from around 3.4554% last week.

China has already raised the benchmark interest rates five times this year in a bid to curb inflation and cool the economy.

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The murder of a man who jumped a petrol queue in China's central Henan province on Wednesday is the stuff of nightmares for the authoritarian Chinese government.

Faced with worsening fuel shortages across the country Beijing raised petrol, diesel and jet fuel prices at the pump by almost 10% on Wednesday, in an effort to boost domestic supplies and exorcise the spectre of social unrest.

The policy reversal came as shortages spread to the capital, which is usually immune from the country's periodic supply crunches.

But the government is unwilling to allow prices to rise too much because of a morbid fear of spiralling inflation, which has a history of toppling governments in China and is currently running at a 10-year high, above 6%.

In announcing the price increase the government said it would not allow rising fuel prices to be passed on to transport and other fuel-dependent industries but would provide direct subsidies to these sectors instead.

Soaring global crude oil prices, which were pushed above $96 (£46) a barrel in Asian trade on Thursday – partly in reaction to China's increase – pose a serious dilemma for Beijing, which last raised its tightly controlled fuel prices in May 2006.

China is the second-largest crude oil consumer after the US and although it was a net exporter as recently as 1993 it now relies on imports for nearly 50% of its crude supply.

The current shortages, particularly of diesel, result from a combination of high global oil prices and strict government controls, causing huge losses for Chinese refiners that must pay more for oil but cannot raise prices at the pump.

Even after this week's rise, wholesale petrol prices are equivalent to only about $76 a barrel in China, compared with the international average of $102, according to analysts.

The one-off price increase therefore appears to be a stopgap measure made by an administration that is betting falling international prices will eventually allow it to loosen its controls.

Analysts estimate Beijing could raise pump prices by another 10% if global crude continues to increase but would not be able to lift them any higher, at least before the 2008 Olympic Games, because of concerns over the potential for street protests.

Many smaller Chinese refineries have shut down production rather than face losses and state-owned refiners such as Petrochina and Sinopec have been forced to take up the slack.

The government controls mean that Sinopec's break-even oil price is $60 a barrel, Wang Yongjian, chairman and president of Yanshan Petrochemical, Sinopec's largest subsidiary, told the FT in a recent interview.

Yanshan, which provides 60% of Beijing's petrol, expects to lose more than Rmb1bn ($130m, £65m, €93m) this year and is likely to receive a direct government subsidy for the third year in a row. The government gave its parent company Sinopec $1.2bn in 2005 and $640m in 2006 in “one-off subsidies” to make up for refining losses.

Analysts say the increasingly independent state oil giants are playing a high-stakes bluffing game with the government in which they chase profits by exporting refined products instead of supplying the domestic market.

This has created shortages that force the government to choose between doing nothing and risking incidents like the one in Henan, or raising prices at the risk of triggering a backlash among ordinary citizens that could escalate like the recent protests in Burma, which started as a reaction against a fuel price increase.

The government will be under enormous pressure to keep fuel prices low at least until after the Olympics next year. They can't have sad faces, let alone street riots or fuel shortages, in Beijing with Bush and Putin here to watch the games.

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At least seven Chinese shipbuilders are planning share offerings, underlining China's efforts to build up its domestic fleet and branch out into the construction of more advanced vessels.

The largest of the anticipated initial public offerings is likely to come from state-owned China Shipbuilding Industry Corporation (CSIC), which wants to raise about $900m on the Chinese mainland A-share market, according to bankers familiar with the situation. The other major state-owned shipbuilder, China State Shipbuilding Corporation (CSSC), is considering a share sale in Hong Kong. The companies refused to comment.

Meanwhile, five privately owned shipbuilders – Jiangsu Rongsheng Heavy Industries, Sinopacific, Mingde Nantong, Yantai Raffles Shipbuilding and JES International – are also looking to sell equity in order to fund their expansion, according to people familiar with the situation. Sinopacific and Mingde confirmed they have IPO plans but refused to give details.

Chinese shipbuilders want to raise capital at a time when shipping activity is close to an all-time high. The Baltic Dry Index, a key measure of commodity shipping costs, has more than doubled in the past year. Gilbert Feng, assistant director of the Hong Kong Shipowners' Association, who visited China's two major state-owned shipbuilders, said: “New building orders are already full until 2010, so their executives certainly sound very confident.”

JES will begin its roadshow next week and is set to float in Singapore as early as the end of November, trying to raise as much as $300m from a share sale managed by ABN Amro. Sinopacific is hoping to raise about $660m next year in an IPO managed by Citic. Meanwhile, Chen Qiang, president of Rongsheng, said in April his company was planning to sell as much as 25% of its equity in an IPO. However, Rongsheng is now in talks with private investors about selling a stake ahead of a IPO. Finally, Mingde has selected Deutsche Bank and Morgan Stanley to manage a listing in either Singapore or Hong Kong. The banks involved in the plans would not comment.

China recently overtook Korea, the world's leading shipbuilding nation, for the first time in terms of one specific measure – first-half ship orders in terms of deadweight tonnage. CSSC's goal is to double its shipbuilding output over the five years to 2010.

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Is it a man? Is it a plane? No, it's .... Japan. Few analysts, it seems, can resist the temptation to draw parallels between the Japanese bubble of the late 1980s and today's go-go Chinese markets.

And no wonder. Valuations may still have a way to go in China (at 50 times forward earnings they are still comfortably below the 70-times multiple of Japan's bubble years) but there are plenty of other similarities.

Strong economic growth? Check. Loose monetary policy? Check. Exporting capital? Okay, so the stakes taken in recent weeks in US and South African banks don't quite rank alongside Japan's trophy deals of the 1980s, but they certainly pass muster.

The Shanghai market has more than doubled this year and China is now home to four of the world's 10 most valuable companies. At current rates it may well nab the top slot before too long: less than $50bn separates PetroChina from Exxon Mobile.

Two decades ago, Japan ruled supreme. In 1988, according to Business Week rankings, Japan boasted eight of the world's 10 most valuable companies. NTT, the fixed-line provider, was worth just shy of $300bn – or about four times today's value.

Now, China boasts the most valuable telecoms carrier – China Mobile is worth more than $400bn – as well as the biggest bank, airline and insurer. (Some of the numbers merit caution, since non-traded shares of dual-listed stocks are based on the higher Chinese stock price, even though the Hong Kong float is sometimes bigger.)

There are structural similarities too. Even though Japan, at its peak, dwarfed the US equities market, its free float was far skimpier. Cross- shareholdings held by friendly stakeholders such as suppliers, clients and banks accounted for perhaps two-thirds of the market.

Likewise the galloping Chinese stock market – which, measured by Chinese stocks in Hong Kong as well as the domestic markets, trumps Japan in size – is largely off-limits. Two-thirds of the market is held by state entities and mainland investors have only limited access to shares listed on the Hong Kong Exchange.

In China's case, the sea change in prevailing assumptions comes from its emergence as a world power. Euphoria met its high point in Japan in 1987, when investors paid Y1.2m a share for NTT – and more than doubled their money in a month. Two decades on, investors in China Shenhua Energy, a coal producer, did not even have to wait that long.

But colourful though the similarities are, there are important differences too.

The numbers are actually far more modest here in China – particularly when you look at the wealth held by households.

Also for example, while the total value of Chinese companies listed on the exchanges of Shanghai, Shenzhen and Hong Kong equate to 146-167% of gross domestic product, the actual free float is far smaller.

Stripping out shares that are not liquid and international tranches brings the ratio down to just 38%.

Meanwhile, China's low real interest rates are only one factor fuelling the stock market. Equally pertinent is the fact that capital controls preclude much investment in overseas assets: relative valuations are a lot less valid if you only have one home for your money.

Will it all end the same way? That is the $64m (Y7.33bn, Rmb477m) question.

But I personally do not foresee a massive unravelling that hammers property prices and pushes the economy into years of recession. What I see, as mentioned last week, is most certainly a  major stockmarket correction - probably as I said, when Indexed Futures are launched.  But after that, the market here could rise as high as 8,000, 10,000 or even higher before we actually see a full bursting of the bubble.

Bizarrely, another big difference would appear to be the number of Cassandras. A Google search suggests an almost unanimous euphoria existed in late 1980s Japan; in China, the doomsayers are out in force. Everyone from government officials to Alan Greenspan, former US Federal Reserve chairman, have warned that China is a bubble waiting to burst.

Whether or not the implosion is as dramatic as in Japan, it seems a fair bet the China equities bubble will pop eventually. But it is worth noting, however, that some of the party poopers' comments may carry a whiff of sour grapes.

Warren Buffett, the investment guru, exited his holding in PetroChina at an estimated average selling price of HK$11.47-HK$13.89 between July and October.

This was up to HK$8.19 below yesterday's close.