US Markets - A series of small shocks about the housing market and economy knocked Wall Street off its stride this week but investors regained some of their poise to leave stocks only moderately lower.

The steepest decline came as Ben Bernanke, the Federal Reserve chairman, damped hopes that the central bank had adopted a softer policy stance by reiterating his concerns about inflation and saying the Fed had not abandoned its bias towards raising interest rates.

Sharp falls in stocks were also caused by fresh signs of slowing demand for housing, federal probes into mortgage lending by Beazer Homes, and oil price rises spurred by increased tension between Iran and the UK.

Rumours of US preparations for a conflict with Iran sparked another sharp sell-off in shares on Friday, with the S&P?500 falling by as much as 1% from its earlier highs.

However, after each slip the market showed a degree of resilience. “This pattern of recovering from shocks may speak to the fact that this market wants to go up,” said Jim Paulsen, chief investment strategist at Wells Capital Management. “[Interest] rates are just too low and liquidity is too high to take this thing down.”

Sentiment was boosted by an unexpected upward revision of economic growth in the final quarter last year and lower than expected jobless claims last week. In addition, consumer spending and income rose at almost double the forecast rate.

The US government’s imposition of duties on paper imports from China also unnerved investors on Friday. The S&P 500 closed down 0.1% at 1,420.85, putting it 1.1% down on the week and 0.2% higher on the year. The Dow Jones Industrial Average was 0.1% stronger on Friday at 12,354.35, down 1% this week. The Nasdaq Composite was 1.1% lower on the week at 2,421.64.

The steel sector made big advances after US Steel’s bid to buy Lone Star Technologies prompted speculation about further consolidation.

In a sign of investor appetite for steelmaking deals, shares in US Steel rose 3% on the week to $99.17 on the back of this week’s $2.1bn cash offer for Lone Star. Lone Star soared 35.6% to $66.03.

There was also interest in other steel groups that could be takeover targets. IPSCO jumped 13.7% to $131.40 while Reliance Steel rose 4.3% to $48.40.

Dell was on the defensive on Friday as the group revealed that it had found evidence of as yet unspecified misconduct after an investigation into its accounting practices.

The company said it was delaying the release of its annual report until the investigation was completed.

The market reaction was negative but contained, with Dell shares down 0.8% to $23.21 on Friday. Credit Suisse encouraged investors to buy on weakness “with the understanding that the time horizon for recovery?has?been extended”.

Homebuilders set new lows for the year this week as weak sales of newly built homes and a profits warning from Lennar aggravated fears about a prolonged housing market slump.

Lennar, which said the typical pick-up in spring sales had “yet to materialise”, fell 7.4% to 42.21. KB Home slid 8.9% to $42.67.

Meanwhile, Beazer Homes plunged 12.5% to $29.03 after it said it was co-operating with FBI inquiries into its mortgage lending. No allegations of wrong-doing have yet been made.

Energy groups were lifted by rising oil prices this week, with Chevron up 0.4% at $74.12.

Archer Daniels Midland, surrendered early gains to stand 0.2% down at $36.70 on Friday after the US government forecast a steep rise in corn planting.

Shares in papermakers surged on Friday after the imposition of duties on Chinese imports. International Paper gained 1.4% to $36.40.

Altria rose 2.7% to $87.81 over the week on speculation that the tobacco and food company might spin off its Philip Morris cigarette division.

European Markets - European equity markets drifted lower this week as tensions between Iran and the UK prompted investors to pare back their risk exposure and take some profits from the previous week’s hefty gains.

The FTSE Eurofirst 300 index ended Friday at 1,515.65, down 0.5% on the week. On the last trading day of the first quarter, the pan-European index remained up 2.2% for the year so far.

So let's start this week in Europe in France where in Paris Share prices closed flat, retreating from earlier gains, as pre-weekend profit-taking offset positive sentiment sparked by stronger-than-expected US consumer spending and earnings figures.

The CAC-40 index finished up 2.63 points, or 0.05%, at 5,634.16, on a volume of 4.7  billion Euro.

Among CAC-40 stocks, 15 closed higher, two were unchanged and 23 closed lower.

On the Matif, April CAC-40 futures were trading up 24.0, or 0.43%, at 5,666.5.

On the broader indices, the SBF-80 index closed down 10.41, or 0.14%, at 7,187.80, while the SBF-120 was up 0.72, or 0.02%, at 4,146.25.

Oil stock Vallourec finished down 3.72 or 1.90% at 191.58, after rising sharply yesterday on the back of news that United States Steel is to buy Dallas-based peer Lone Star Technologies Inc.

Eiffage was also down 5.50 or 4.78% at 109.50 as investors took some of the profits of recent sharp rises, encouraged by Societe Generale's decision to downgrade the stock to 'sell' from 'hold'.

In the cosmetics sector, Clarins was also hit by profit-taking, down 1.52 or 2.38% at 62.47 after adding as much as 11% last week following news of the death of founder Jacques Courtin-Clarins.

Also in the red, radio broadcaster NRJ Group plunged 1.24 or 9.30% to close at 12.10 after announcing a sharp drop in full-year net profit and warning of lower operating profit in 2007 and 2008.

Exane BNP Paribas downgraded the stock to 'underperform' from 'outperform' and cut its price target to 14 Eur from 17.

On the upside however, French construction stocks fared well on the back of strong construction spending figures for the US, with investors taking advantage of recent declines in share prices to build positions.

Nexity finished up 0.58 Eur or 0.91% at 64.02, Klepierre was 5.84 or 4.20% ahead at 144.84 and Kaufman & Broad closed up 1.13 or 2.05% at 56.23.

Capgemini led CAC-40 gains, adding 0.98 or 1.75% to end at 56.99 after being upgraded to 'outperform' from 'neutral' by Exane BNP Paribas, with an increased target price of 64 Eur versus 55 previously.

EDF finished at 62.76, a rise of 0.95 or 1.54%, after announcing details of a joint venture with Delta to develop a gas-fired plant in the Netherlands.

Following an agreement signed in July 2006, EDF said the partners have now created Sloe Centrale B.V as a joint venture to develop the plant in Sloe, south-west Netherlands, with a 550  million Eur contract to build and maintain the facility awarded to Siemens.

Into Germany now where Frankfurt Shares closed slightly higher with income data indicating the weak housing market has not yet affected consumers' disposable incomes, and as financial stocks were boosted by speculation on possible takeovers in the sector.

The DAX was up 19.95 points or 0.29% at 6,917.03, after trading between 6,855.58 and 6,965.84 in the session.

The MDAX was 39.72 points or 0.39% higher at 10,201.23, while the TecDAX gained 3.77 points or 0.45% to 846.79.

DAX futures gained 12.50 or 0.18% to 6,973.50, while bund futures rose 0.01 or 0.01% to 115.01.

On Germany's macroeconomic front, preliminary figures from the Federal Statistics Office showed German retail sales were down 1.6% in real terms in February, compared with last year, and were up 0.9% from January this year.

The numbers largely confirmed an expected decline in first quarter retail sales due to the country's Jan 1 VAT rate hike, but economists said the rebound shows evidence that sales might bounce back slightly faster than anticipated.

On the Frankfurt trading floor, financial stocks rose to the top of the blue chips, boosted by takeover rumours in the sector.

Deutsche Postbank gained 1.39 Eur or 2.18% to 65.27 Eur, Commerzbank added 0.70 Eur or 2.16% to 33.12 and Hypo Real Estate advanced 0.75 Eur or 1.60% to 47.74.

Deutsche Bank, which is a much less likely takeover target, added 0.78 Eur or 0.78% to 100.84 Eur, largely due to a higher sector valuation, traders said.

Deutsche Boerse climbed 2.10 Eur or 1.24% to 171.50 Eur.

The exchange operator said that the very first Chinese company to be listed on a German exchange successfully completed its IPO this morning.

Shares in Gongyou Machines Limited were trading at 4.05 Eur per share, up almost 27% from its IPO price of 3.20 Eur.

DaimlerChrysler rose 0.20 Eur or 0.33% to 61.40 Eur.

BMW climbed 0.49 Eur or 1.12% to 44.17 Eur as one analyst pointed to a boost from news yesterday that BMW has set up a new production plant in India.

Short-term capacity will be a modest 1,700 cars, but BMW wants to follow strong expected market growth in India and expand the plant mid-term, the analyst said.

At the other end of the DAX, Volkswagen lost 1.12 Eur or 0.99% to 112.50 Eur.

On the MDAX, Leoni rose 0.83 Eur or 2.77% to 30.83 Eur.

Patrizia Immobilien gained 0.37 Eur or 2.26% to 16.72 Eur after US shareholder Cohen & Steers increased its stake in the real estate specialist to 5.05%.

Norddeutsche Affinerie lost 1.20 Eur or 4.82% to 23.70 Eur, at the other end, after its shares were trading ex-dividend today.

On the TecDAX, United Internet jumped 0.80 Eur or 5.82% to 14.55 Eur after the company said it sees sales gaining 28.2% to 1.5  billion Eur this year as more Germans subscribe to high-speed internet service.

In The Netherlands Shares in Amsterdam ended lower as Wall Street moved into the red, while Buhrmann fell following the sudden departure of a US executive.

The AEX closed 1.35 points or 0.26% lower at 510.50, after trading in a range of 509.11-514.46.

Buhrmann dropped 4% to 10.08 Eur after the company's US chief of operations resigned. Analysts viewed the resignation as a negative signal for Buhrmann's upcoming first-quarter earnings report.

Oil-related shares dropped as oil futures were off highs but still at around 68 usd a barrel due to tension in the Middle East. Royal Dutch Shell dropped 1.39% to 24.90 Eur and SBM Offshore shed 0.74% to 26.99 Eur.

Philips shed 0.73% to 28.59 Eur in profit-taking after sharp gains yesterday, dealers said, and Numico dropped 0.67% to 38.61 Eur.

Akzo Nobel fell 0.61% to 56.85 Eur and KPN dropped 0.60% to 11.60 Eur.

With the exception of ING, all financials ended lower. ABN Amro edged 0.12% lower at 32.22 Eur, Fortis ended flat at 34.18 and Aegon shed 0.27% to 58.06 Eur.

ING ended 0.64% higher at 31.65 Eur after chief executive Michel Tilmant told French newspapers the group does not 'need' to make any large acquisitions and is prioritising organic growth, quelling speculation that ING could compete with Barclays' bid for ABN Amro.

Heineken rose 0.69% to 39.16 Eur, Unilever gained 0.83% to 21.8 Eur and Arcelor Mittal led gainers, adding 1.27% to 39.75.

Nutreco led gainers among midcap shares, adding 2.84% to 56.06 Eur after yesterday's announcement of a superdividend to investors, while Wereldhave rose 2.75% to 115.25 Euro, and Corio put on 2.30% to 68.01 Eur.

Tele Atlas dropped 2.4% to 16.82 Eur, while Ordina lost 1.31% to 17.31 Eur after SNS Securities raised its price target to 22 Eur from 18 on valuation grounds, citing potential growth in outsourcing activities.

Belgium saw Brussels' Shares closed lower with pharmaceuticals group UCB the sharpest faller on the blue-chip index on a target price cut at Credit Suisse.

At the close, the Bel 20 was down 22.05 points, or 0.49 Eur, at 4,471.65.

UCB fell 1.31 Eur, or 2.92%, to 43.57 after Credit Suisse cut its target price on the stock to 33 Eur from 40 and reiterated its 'underperform' rating.

Elsewhere, utility Suez was down 0.36 Eur, or 0.90%, at 39.48, while Belgacom was 0.16 Eur, or 0.48%, lower at 33.25.

Delhaize Group edged down 0.11 Eur, or 0.16%, to 68.81, while brewer InBev inched down 0.10 Eur, or 0.18%, to 54.05.

Solvay was down 0.66 Eur, or 0.57%, to 115.04. The Belgian chemicals group and German peer BASF said their SolVin joint venture is planning to build a second Polyvinylidene chloride (PVDC) plant.

The new plant would produce around 10,000 tonnes of PVDC annually and will possibly be located in Asia. Solvay currently has a site in Map Tha Put, Thailand.

Separately, the group also announced that the safety trials for its schizophrenia drug bifeprunox showed favourable results.

Agfa-Gevaert inched down 0.01 Eur, or 0.06%, to 16.89.

Among the heavyweight financials, Dexia was 0.30 Eur, or 1.33%, lower at 22.34, while its peers rose.

KBC Group was up 0.17 Eur, or 0.18%, at 93.11 after analysts were bullish on the financial services company's rumoured interest in buying a minority stake in Czech insurance group Ceska Pojistovna.

Fortis rose 0.02 Eur, or 0.06%, to 34.19. The Belgo-Dutch bancassurance group said the company still has room to grow further, although it is not in talks with peer Dexia, in an interview with French daily Le Monde.

Elsewhere, National a portefeuille was the highest blue-chip climber, rising 0.79 Eur, or 1.69%, to 47.54.

Outside the Bel 20, D'Ieteren was up 0.51 Eur, or 0.16%, to 310.00.

The automotive leasing group said it has raised its stake in vehicle glass repair subsidiary Belron to 77.38% from 73.73%.

D'Ieteren said it exercised a call option on 3.65% of the equity capital of Belron, currently owned by Cobepa, for 31  million Eur.

Meanwhile, Roularta was down 1.75 Eur, or 2.68%, to 63.45. The Belgian media group has acquired VNU Business Publications Belgie, publisher of magazines Data News and Texbel. The financial details of the deal were not disclosed.

Into Switzerland now where in Zurich Share prices closed flat after a late round of profit-taking, offsetting earlier gains in the wake of positive US consumer data.

The Swiss Market Index closed 0.46 points lower at 8,976.99 and the Swiss Performance Index was up 3.57 points at 7,183.53.

The Euro eased against the Swiss franc to 1.6222 sfr, while the Dollar dropped to 1.2126 sfr.

The SMI closed flat with a reversal on Wall Street prompting a late round of profit-taking, which wiped off most of the afternoon's gains after some forecast beating US consumer data.

Friday's sharpest faller was Adecco, down 1.55 sfr or 2% at 77.15, after Morgan Stanley (nyse: MS - news - people ) cut its rating on the temporary employment group to 'equal-weight' from 'overweight', on valuation grounds, reflecting its inferior growth rates compared to its rivals.

Banking stocks underperformed with Credit Suisse shedding 0.85 sfr to 87.20 and UBS dropping 0.30 sfr to 72.20.

Elsewhere among financials, Converium was down 0.05 sfr at 21.30, after the share was initiated by HSBC with an 'underweight' rating and a price target of 20.30 sfr.

Heavyweight Roche was also among today's sharpest fallers, down 2.10 sfr at 215.00 on profit-taking, with investors shrugging off news that the European Commission has approved its Xeloda cancer drug in combination with chemotherapy for first-line use in patients with advanced stomach cancer.

Peer Novartis added 0.45 sfr to 69.70, while fellow heavyweight Nestle rose 3.25 sfr to 473.25 as one of the market's best performers.

Other outperformers included Syngenta, up 5.40 sfr or 2.4% at 232.50, Lonza, adding 2.10 sfr or 1.8% to 116.80 and Clariant up 0.30 sfr or 1.5% at 20.85

Into Scandinavia now and starting with Sweden where in Stockholm shares closed slightly higher supported by forthcoming dividend pay outs and a slight easing in oil prices.

The OMX Stockholm index closed up 0.16% at 396.43 and the OMX Stockholm 30 up 0.01% at 1,214.41. Turnover was 29.147  billion SKr.

In total, 177 shares closed higher, 48 were unchanged and 80 ended lower.

Stocks with the full-year dividend day of record coming up were in demand, with B shares in Scania - which is paying a dividend of 50 SKr per share - closing up 1.49% at 545 SKr bid.

Blue-chip engineering stocks were also in demand ahead of record dividend payouts and paybacks with Sandvik closing up 2.48% at 124, Atlas Copco A up 0.43% at 231.50, and SKF B up 1.22% at 145.

SSAB A closed up 1.17% at 215.50. The steel producer said its unit Plannja AB has acquired the Swedish family-owned sheet and ventilation supplier Steinwalls Plat AB, for an undisclosed sum.

Steinwalls employs 45 employees and has annual sales of around 80  million SKr to the prefabricated market.

In the telecoms sector, Ericsson B closed down 0.19% at 25.70. Ericsson said it has won a contract with Turkish telecom operator Turkcell to enhance network capacity in Turkey.

Among the operators, TeliaSonera closed down 2.44% at 60, while Tele2 B fell 1.29% to 114.50.

SCA B closed down 12.50 SKr, or 3.23%, at 374, with the share trading ex-div 12.00 SKr.

Autoliv closed down 1.24% at 398.50. New CEO Jan Carlson said he intends to initially continue with current strategy without any big changes, Dagens Industri reported.

Among other heavily traded shares, Volvo B closed up 0.17% at 587, Nordea up 0.27% at 111.50, Boliden up 0.99% at 153.50, and Electrolux B up 1.44% at 176.50.

Neighbours Denmark saw Copenhagen Share prices close higher, led up by Carlsberg on sector merger speculation, by GN Store Nord on a broker upgrade, and by FLSmidth.

The OMXC20 index closed 1.73 points higher at 466.59 and the OMXCB Benchmark index rose 2.00 points to 445.92.

The OMXC All Share index closed 1.00 point higher at 443.62 on turnover of 5.08  billion DKr.

Carlsberg B closed 15 DKr higher at 607, after market rumours said Carlsberg is joining Heineken in a bid for Scottish & Newcastle. Analysts downplayed the rumours and Carlsberg refused to comment on them.

Thinking it is highly unlikely that Carlsberg could finance a bid for S&N, Merrill Lynch said that, in the longer-term, it is probable that S&N and Carlsberg will merge, as the biggest part of both of their businesses is their joint venture, Baltic Beverages Holding (BBH).

Although it could see a case for Carlsberg buying S&N, Jyske Bank dismissed the reports as rumours and also doubted whether Heineken buying S&N is realistic. But the bank's analysts do see a possibility of Carlsberg buying S&N out of their equally owned BBH venture.

Danisco rose 0.5 to 439.5 and Novozymes added 1.5 to 499.

GN Store Nord was 1.25 higher at 79 after the shares were upgraded to 'neutral' from are duce' by UBS, with the price target raised to 86 DKr from 78, on the new group structure following the disposal of hearing aid unit GN Resound to Phonak, dealers said.

William Demant Holding added 2.5 to 495. The group's AGM yesterday extended to Jan 1, 2012 authorization to increase share capital by up to 6.66  million DKr.

Vestas Wind Systems rose 2 to 312.5. The group is in the running to win a major order from Australia's Allco Wind Energy to supply wind turbines for a 1,500 MW clean energy project in California.

AP Moller-Maersk B fell 900 to 58,200 as analysts at Jyske Bank cut their earnings per share estimates for the company for 2007 and 2008 by 9% and 8% respectively, repeated their are duce' stance on the stock, and said they see further considerable risks ahead.

DS Torm was up 4 at 386.5 on a report in TradeWinds that the group has chartered two Panamax bulk carriers from Norway's JL Mowinckels Rederi.

Copenhagen Airports fell 4 to 2,345. The group intends to sell up to a 6.1% stake in Grupo Aeroportuario del Sureste (ASUR), reducing its holding from 9.85%. The sales sum is expected to be 520  million DKr, giving a 105  million DKr positive impact on the group's net profit.

Lundbeck was 1.5 lower at 130.5 after the shares were downgraded to 'neutral' from 'overweight' by JP Morgan, which said it sees no significant catalysts for the stock over the next 6 to 12 months.

Novo Nordisk B rose 1 to 509 and Coloplast was unchanged at 473.5.

Danske Bank was up 2 at 259.5 on news it sees the Baltic region's growing economy providing excellent opportunities for the development of banking businesses in the future.

The bank has acquired 100% of the shares in Latvia's Sampo Banka from Finland's Sampo Bank, as part of its 30.1  billion DKr takeover of Sampo Bank.

Topdanmark was up 35 at 1,080 and TrygVesta rose 3 to 461.5.

In Helsinki Finnish shares closed slightly higher, led by Nokia, on bargain-hunting after earlier losses, with Stora Enso ending lower as it traded ex-dividend.

The OMX Helsinki 25 ended 0.17% higher at 3,077.70 and the OMX Helsinki was up 0.23% at 10,313.00 on 925  million Eur turnover.

Nokia - 0.17% lighter at 17.23 Eur - reversed earlier losses to lead the broader market into the black.

Stora Enso R -- 0.84% lower at 13.00 Eur -- was trading ex-dividend.

Sector peers closed mixed, with UPM-Kymmene adding 0.53% to 19.07 Eur, while M-real B shed 0.17% to 5.82 Eur.

Among industrials, Cargotec ended 0.31% firmer at 45.21 Eur after it said its marine cargo handling unit, MacGREGOR, had won 19  million Eur in orders to provide roll-on roll-off (RoRo) access equipment to different shipyards.

Konecranes gained 0.24% to 25.10 Eur after it said it had won two Rubber Tired Gantry (RTG) orders worth 7  million Eur from Ukraine's HPC Ukraina and Compania Auxiliar del Puerto SA (CAPSA) in Santa Cruz de Tenerife, Canary Islands.

Metso closed 0.76% higher at 39.55 Eur after it said its Automation unit had won a 10  million Eur valve order from Chiyoda-Technip Joint Venture (CTJV), formed by Japan's Chiyoda Corp and France's Technip for its oil and gas project in Qatar.

Wartsila B put on 0.94% to 46.29 Eur and Kone recovered from earlier losses to close 0.49% higher at 42.77 Eur.

Energy stocks closed mixed, with Neste Oil -- 0.58% lower at 25.80 Eur -- giving up earlier gains on profit-taking, traders said.

Fortum ended the session 0.46% firmer at 21.83 Eur.

Elsewhere, Kemira finished 0.29% higher at 17.14 Eur after it said it had sold its industrial service unit OnePoint to Finland's Kokkolan Voima, but revealed no financial details.

Closing out the Nordic arena this week is Norway where in Oslo Share prices closed lower, led down by Aker and Aker Kvaerner on reports that Aker was poised to sell its stake in the engineering company, while Awilco Offshore rose after winning a contract from Norsk Hydro, which lifted sentiment in other rig stocks.

The OSEBX Benchmark index closed 0.77 points lower at 461.30 and the OSEAX All Share index fell 1.29 points to 521.20.

Total turnover amounted to 14.89  billion NKr.

Aker closed 22 NKr lower at 387 and Aker Kvaerner fell 11.4 to 137 on speculation that Aker is poised to sell its stake in engineering company Aker Kvaerner, which would lead to a heavy tranche of shares being offloaded on the market at one time.

Aker Yards shed 4.2 to 105. The stock traded ex a dividend of 18 NKr and a one-for-five share split.

Awilco Offshore was up 3.1 at 68 after Norsk Hydro awarded the company drilling contracts for two semi-submersible drilling rigs worth 1.4  billion usd.

Subsea 7 was up 0.25 at 115.50, Seadrill added 2 to 100 and Stolt-Nielsen rose 2.5 to 181, while Petroleum Geo-Services was unchanged at 158.75, Scorpion Offshore was unchanged at 68 and Prosafe fell 0.6 to 93.

ElectroMagnetic GeoServices was unchanged at 145.5 today, its first day of trading. The Norwegian oil services group's initial public offering was priced at 135 NKr a share, at the top end of the upgraded 125-135 NKr range.

Norsk Hydro rose 0.5 to 201.5, while Statoil was down 2 at 165.5.

Yara International was 1.25 lower at 167.75 on a continued weakening of urea prices, dealers said. They added that urea prices have fallen almost 20 usd to 300 usd a tonne for April deliveries. Urea is the key comPound used by Yara in its production of fertiliser.

DnB NOR rose 0.5 to 85.8. The group's financing division, DnB NOR Finans, has acquired SEB's car financing operations in Sweden for an undisclosed sum.

Heading down to the Med' now where in Athens Greek shares closed lower on blue-chip profit-taking in below-average trade as investors paused for numerous full-year results to be released today after the close of trade.

The ASE general index finished down 0.5% at 4,643.1 led down by blue-chips, which closed 0.5% lower at 2,488.8.

Mid-caps closed slightly higher, up 0.2% to 5,827.7 while small-caps closed almost unchanged at 891.5.

Decliners outnumbered advancers 134 to 115 while 67 remained unchanged in below average trade of roughly 345  million Eur.

Electricity utility Public Power Corp (PPC) led blue-chip decliners throughout the session, dropping 3.5% to 18.32 Eur after UBS cut its target to 17.8 Eur from 18 Eur on full-year results which UBS described as its worst in years.

Lottery operator OPAP also slumped 0.8% to 28.72 Eur after Alpha Finance cut its target price to 28.4 Eur from 29 Eur after its full-year results came in below the brokers estimates.

The Greek Postal Savings Bank climbed 0.9% 18.94 Eur ahead of full-year results to be released possibly today after the market closes. Construction group Hellenic Technodomiki led blue-chip gainers to close 1.2% higher at 11 Eur and is also likely to post results.

Bottler Coca-Cola HBC fell 1.5% to 31.50 Eur after sources said it will propose a 0.32 Eur dividend per share at its AGM on June 20.

Titan Cement fell 1.4% to 40.40 Eur on profit-taking, unaffected by Morgan Stanleys initiation of coverage with an equal weight rating and a 47 Eur price target, implying a 16% upside, on its strong operational performance.

Defense and technology holding group Intracom Holdings closed down 1.9% at 4 Eur after it announced that it had made a net loss of 68.8  million Eur against a profit of 3.2  million Eur in 2005.

Construction company J&P Avax gained 1.4% to 7.1 Eur on its announcement that full-year net income reached 19.5  million Eur, up 53% year-on-year from 12.8  million Eur.

In Milan Italian Share prices closed flat, trading in a volatile fashion yesterday afternoon on US economic data, with energy stocks higher on the oil price trend.

The Mibtel index was up 0.17% to 32,541 points and the S&P/Mib up 0.01% to 41,771.

Volume was an estimated 5.209  billion Eur.

In the energy sector, Snam Rete Gas was among the main gainers, up 1.48% to 4.725 Eur, in a move which brokers said was linked to higher oil prices.

Eni was up 0.08% to 24.27 and Saipem was unchanged at 21.81. ERG was up 3.24% to 20.48 after comments on investments by the refiner.

Tenaris, which trades like an oil service stock, was down 0.99% to 17.32 after a sharp rise yesterday on acquisition news in its steel tube sector.

Terna gained 1.53% to 2.78.

Enel rose 0.38% to 8.03 on continued analyst comment on its plans to acquire Endesa in Spain. One broker said the strategy and the effort to accelerate the timing of a bid are both positive.

Acea gained 1.43% to 14.00. Cheuvreux raised its rating on the stock to 'outperform', from 'underperform', after this week's results.

Banks were supported by merger speculation. Capitalia was up 1.21% to 6.765. Intesa Sanpaolo added 1.88% to 5.695 on continued expectations ahead of its business plan in mid-April.

BMPS rose 0.24% to 4.70. Brokers said they do not favour the bank's decision to increase its stake in the Hopa holding. One said the investment is 'not strategic, not core, and not justified'.

Construction sector was in focus. Impregilo 2.89% to 4.95 on the positive outlook for its operations given at an analysts meeting, brokers said.

Buzzi Unicem rose 0.89% to 22.76 on its comments on trading. Italcementi rose 3.18% to 5.695 after small north American acquisitions.

Lottomatica fell 1.23% to 29.82. The company sold a stake in its Polish activities during the session.

Telecom Italia rose 1.18% to 2.15. Telecom Italia agreed Italy's first virtual mobile operator deal with the Coop retailer, adding it does not see customer loss. It gave no other financial details.

And bringing Europe to a close this week, last but by no means least we go to Spain where in Madrid Share prices closed moderately higher with Gamesa rising 2.89% on rumours of an imminent contract.

The IBEX-35 index closed 36.40 points higher at 14,641.7 after trading in a range of 14,539-14,730 on turnover of 6.4  billion Eur.

The April future on the Ibex-35 closed at 14,669.0, up from 14,584.0 on Thursday, on turnover of around 19,340 contracts.

Equities opened lower on light profit-taking and rising oil prices on the back of growing geopolitical tensions between the West and Iran, both of which outweighed a positive close on Wall Street.

The index recovered in afternoon trade on positive sentiment sparked by stronger-than-expected US consumer spending and earnings figures.

Gamesa led the pack, up 0.76 Eur, or 2.89%, to 27.10 on unconfirmed rumours of an imminent contract.

Also in demand was AGBAR after announcing it will pay a complimentary 0.26 Eur per share gross dividend against 2006 results, while ACS climbed 0.64 to 45.45 following news its Dragados unit has won a 39.11  million Eur contract for construction of a 2.2 km stretch of a Barcelona orbital motorway.

Inditex also outperformed, up 0.56 to 46.53, buoyed by strong February retail sales announced yesterday.

Iberia fell 0.01 to 3.99, after it received a request for information from Texas Pacific Group ahead of a possible full takeover bid for 3.60 Eur per share, lower than many analysts had hoped for. Later, British Airways PLC revealed it has appointed Swiss broker UBS to advise on how to use its 10% stake in Iberia in the best interests of shareholders in the event of a bid.

Banks were mixed, with SCH up 0.03 to 13.36, recovering from earlier losses, BBVA down 0.05 to 18.38, Popular 0.17 higher at 15.44 and Sabadell up 0.18 to 35.66.

As the combatants in the bidding war for Endesa opened a new front in the courts, Acciona slipped 0.45 to 162.15. Earlier, the construction group said it had received authorisation from local authorities to develop wind power facilities in the Valencia region of Spain with 318 megawatts generating capacity.

Endesa fell 0.07 to 40.48.

Among other utilities, Iberdrola dropped 0.28 to 35.39. Earlier, the group announced Scottish Power PLC shareholders had approved its 17.1  billion Eur bid.

Media shares were mixed with Sogecable adding 0.56 to 31.06, Antena 3 rising 0.16 to 16.74, while Telecinco slipped 0.09 to 21.63, extending recent weakness.

UK Market - The FTSE 100 closed the first quarter of 2007 with a fall of 16.2 points, or 0.3%, to 6,308.

Vodafone did most of the damage. The shares fell 4.3% to 135.5p after the mobile phone operator revealed a decline in margins at its UK operations.

Elsewhere, the FTSE 250 rose 23.6 points, or 0.2%, to 11,689.3.

Over the week, the FTSE 100 fell 0.5%, while the FTSE 250 eased 0.1%. The blue-chip index rose 1.4% during the quarter and the mid-cap index gained 4.6%.

British Airways continued to lose altitude Friday. Shares in the airline group fell 2.4% to 486p, extending their decline over the past week to 6.2%.

Traders pinned Friday’s poor performance not on the strong crude price but a downgrade to “sell” from ABN Amro.

Sector watchers said BA shares had also been affected by talk that it might get involved in a bidding war for Iberia.

The Spanish airline Friday received a €3.4bn (£2.3bn) takeover approach from private equity group Texas Pacific. BA has a 10% stake in Iberia and a code sharing alliance and for those reasons traders said it could launch a counter bid.

After the market closed, BA said it had appointed UBS to advise on its options for its stake.

Scottish & Newcastle, up 1.1% to 601½p, was again among the most heavily traded stocks. In the past two days nearly 90m shares, or 9.4%, of the brewing company has changed hands, as takeover rumours have swirled. The talk among market professionals Friday was of a 710p-a-share bid approach from SABMiller, 0.4% higher at £11.15.

Kingfisher moved up 2.9% to 287¼p amid talk that Goldman Sachs’ private equity arm is considering an offer for the DIY retailer.

Compass Group, the contract caterer, rose 1.3% to 340p on a Citigroup upgrade to “buy”. After less than a year in command of Compass, chief executive Richard Cousins is proving to have steered the group in the right direction” the broker said, reflecting on Thursday’s stronger than expected trading update.

Resolution, the life fund consolidator, fell 4.2% to close at 620½p after takeover talks ended.

Woolworths was among the biggest fallers in the FTSE 250. Its shares dipped 3.9% to 30¾p after Credit Suisse set a downside target price of 27p, citing concerns about debts.

On a brighter note, PartyGaming added 3.5% to 51¾p after the World Trade Organisation said the bill banning internet gaming in the US was illegal.

Rumours of predatory interest from Adecco and a Morgan Stanley upgrade saw Hays, the recruitment consultant, advance 2.3% to 156¾p. Forth Ports faded 0.5% to £20.75 in spite of rumours of a £25-a-share bid from Rreef, the property and infrastructure investment arm of Deutsche Bank.

New Star Asset Management slipped 6.7% to 455p as directors, led by John Duffield, chairman and founder, and employees, offloaded 47m shares, or 16%, of the group. Goldman Sachs placed the shares at 455p each, raising a total of £210m for the directors.

Erinaceous, the property support services group, fell 5.8% to 211p. The talk in the market was of a rights issue to pay down its £140m of debt.

Billing Services gained 5.1% at 30¾p in heavy volume amid rumours the company was set to announce a disposal.

SurfControl, the internet content filtering group, climbed 5.5% to 475p on hopes there could soon be an update on December’s takeover approach.

Interquest, the information technology recruitment consultant chaired by Gary Ashworth, improved 3.2% to 143½p after reporting strong annual results and an upbeat outlook statement.

Japan & Asia Pacific - Most Asian markets eeked out gains Friday, but Chinese stocks snapped a nine-day winning streak as shares were sold to lock in profits.

In Japan the benchmark Nikkei 225 index edged up 23.71 points, or 0.14%, to finish at 17,287.65 points.

Trading was thin as many companies closed their accounting books at the end of the fiscal year in March.

Investors were cautious ahead of next week's closely watched "tankan" business survey by the Bank of Japan. The quarterly study of business sentiment is seen as an indicator of the economy's direction.

Some banks and real estate stocks advanced, including Mizuho Financial Group Inc., which rose 2.02%, and Mitsui Fudosan Co., which climbed 2.06%.

A segment of autos and telecoms also moved higher, with Honda Motor Co. rising 0.98% and NTT DoCoMo Inc. gaining 0.93%.

Hong Kong stocks fell slightly amid worries about a possible slowdown in the US economy, a major export market. The blue-chip Hang Seng Index fell 20.85 points, or 0.1%, to 19,800.93.

Analysts said they expected the benchmark index to stay at the 19,800 level, which it breached Thursday for the first time since late February.

Leading the day's gains were Chinese shipping-related companies, which outperformed the market after China Cosco Holdings, the nation's biggest shipping company, said its parent plans to inject into the listed company bulk shipping assets. That could more than double the size of the company's fleet.

China Cosco jumped 5.9%, though it reported a 64% fall in annual net profit Thursday. Blue chip Cosco Pacific, a 52%-owned unit of China Cosco, rose 2.4%. Cosco Pacific rival China Merchants Holdings rose 1.1%.

Chinese Investors in Shanghai sold heavyweights Industrial & Commercial Bank of China, which dropped 1.8%, and Bank of China, which lost 2.1%. The profit taking came after the blue chips spiked over the past two days on institutional demand.

The benchmark Shanghai Composite Index fell 0.4% to 3,183.98. But the Shenzhen Composite Index edged up 0.6%, to 825.79, after declining for the previous two sessions.

Elsewhere in the region, Bangkok saw Thai shares rise 0.3% to 673.71 in moderate trade, led by gains in energy and banking stocks.

In Malaysia The Kuala Lumpur Compsite Index rose 0.9% to 1,246.87 quarter-end window-dressing by local funds.

Philippine shares rebounded from a two-day retreat, in line with Wall Street's overnight rise. The 30-company Philippine Stock Exchange Index gained 51.83 points, or 1.6%, at 3,203.55.

Indian shares ended higher as funds bought stocks to lift the year-end value of their portfolios, with auto and steel stocks leading gains. The Bombay Stock Exchange's 30-stock Sensitive Index, or Sensex, rose 92.44 points, or 0.7%, to close at 13,072.10.

South Korean shares closed flat, with losses offset by robust gains in LG Electronics and steelmaker Posco as investors turned to issues with a positive earnings outlook in a lackluster market. The Korea Composite Stock Price Index, or Kospi, closed up 1.60 points, or 0.1%, at 1452.55.

Singapore shares ended higher amid strong gains in major property trusts. The benchmark Straits Times Index rose 2.4 points, or 0.1%, to 3231.2.

Taiwan shares posted modest gains on overall market strength. The Weighted Price Index of the Taiwan Stock Exchange rose 36.08 points, or 0.5%, to close at 7884.41 on brisk volume.

Indonesian shares rose Friday, led by gains in heavyweight Telkom and nickel miner Inco despite limited buying due to concerns over rising oil prices. The Jakarta Stock Exchange Composite index closed 13.205 points or 0.7% higher to 1,830.924 in a moderate trade where losers led gainers 83 to 75 with 68 stocks unchanged.

The Australia stock market closed on Friday in positive territory, highlighted by keen investor interest in media stocks before a change to media ownership laws next week.

The S&P/ASX200 index was 34.1 points higher at 5995, while the all-ordinaries gained 33.1 points to 5978.8.

The June share price index contract on the Sydney Futures Exchange was 20 points higher at 6026 on a volume of 16,486 contracts.

PBL surged 82c to A$19.85, Fairfax jumped 24c to A$4.98 and News Corp added 50c to A$30.40.

BHP climbed 7c to A$29.89 and Rio Tinto rose 63c to A$78.81.

The banks were mixed. National Australia Bank gained 25c to A$40.40, the Commonwealth Bank lifted 16c to A$50.26 and ANZ dropped 15c to A$29.70. Westpac was steady at A$26.35.

Energy utility Alinta put on 37c to A$14.52 after endorsing a A$7.4 billion takeover bid for its assets by a consortium led by investment firm Babcock & Brown Ltd and Singapore Power International. Babcock & Brown gained A$1.07 to close at A$27.47.

Coles gained 18c to A$16.25, Harvey Norman put on 13c to A$4.72, Woolworths picked up 17c to A$27.19 and David Jones was steady at A$4.55.

The energy sector was mixed despite a jump in the oil price. Santos gained 15c to A$10.15, Oil Search gained 7c to A$3.71 and Woodside shed 6c to A$39.49.

Into New Zealand where News Port of Tauranga and Ports of Auckland had called off merger talks dulled already meagre enthusiasm on the NZ sharemarket Friday.

Port of Tauranga said it had called off the talks begun last year because Auckland Regional Holdings, owner of Ports of Auckland, had dithered about whether a merger was worth undertaking. Tauranga shares fell 20c to 610.

South Port rose 25c to 215.

The benchmark NZSX-50 index, already down before the announcement, closed down 5.41 points on 4107.14.

Turnover was sold at 55 million, worth $177 million.

There was good turnover in GPG, which ended 1c up on 228 after a disappointing week. UBS broker Richard Leggat said a couple of large overseas holders had decided there was too much uncertainty surrounding GPG's Coates investment.

Meanwhile, BIL International put on 3c to 145.

Top stock Telecom pulled back from early weakness to finish square on 473. That contrasted with a 20c gain to 534 for Telstra.

Commodities - Oil prices Friday reached their highest level this year capping a strong week that saw prices rise more than 8%. The increase was driven by increased tensions between Iran and the West and tighter conditions in the US petrol market.

The capture of British sailors last week by Iran has created nervousness in oil markets. This was underlined by the $5 surge in oil prices on Tuesday after rumours that a conflict had started between Iran and the US. Once the rumours were denied, prices eased, but they still moved higher over the rest of the week.

The price for Brent crude, the European oil benchmark, hit its highest level for the year Friday when it touched $69.14 a barrel, before easing to $68.52, up 60 cents on the day and surpassing the $69.0 level reached on Tuesday after rising $5 within a number of minutes. Brent rose more than 8% last week, adding to the 4% rise from the previous week.

The US benchmark, the West Texas Intermediate, gained 5 cents to $66.08 a barrel in late morning trade on the New York Mercantile Exchange, and was up almost 6% on the week. The WTI price reached its high for the year on Tuesday of $68.09 a barrel after the $5 price surge.

One reason for the difference between the WTI and Brent prices is the tightness in the US storage market. Energy analysts said storage capacity is near full in the Midwest area where WTI is physically delivered, largely due to the high number of refineries that are either in maintenance or have halted production because of a fire or accident.

Analysts estimate that about 8% of US refinery capacity is down due to fires and accidents.This has meant more crude is going into storage as it cannot be processed. Meanwhile, the reduced refinery activity is boosting petrol prices.

Nymex benchmark gasoline futures touched $2.1488 a gallon Friday, up one cent on the day, but up more than seven% on the week, and up more than 58% from its low for the year in mid-January. The rise in petrol prices has boosted refiner margins, which analysts say will stimulate further petrol production in the coming weeks when some refineries are expected to come back on line.

Gold prices added $2 to $663.50/$664.00 a troy ounce Friday, and were up about 1% on the week.

Copper prices also hit their highest level for the year when they reached $6,935 a tonne on the London Metal Exchange, before easing to $6,870 in late trade, up $115 on the day, and more than 2% on the week.

The copper industry gathered in Santiago this week for its annual gathering when contract prices between miners and smelters are negotiated. CRU, the metals consultants, also held a copper meeting in the Chilean capital this week.

Huang Guoping, vice-president of China Minmetals, said copper demand in China, the metal’s biggest consumer, is expected to grow 21% to between 4.5m and 4.7m tonnes by 2010 from 3.8m. Chinese copper demand rose 5.6% in 2006, compared with 9.1% growth in 2005.

Copper prices have also risen sharply over the past two months on forecasts of a deficit during the second quarter, the strongest period of the year for copper. This was not anticipated at the start of the year when copper prices suffered a large slide.

Nickel prices rose steadily last week after two weeks of wild swings. The three-month LME nickel price eased $50 to $43,800 a tonne Friday, but was up more than 3% on the week.

Corn and wheat prices fell sharply Friday after a bigger than expected increase in US corn planting estimates. Soybean prices also eased in spite of a bigger-than-expected fall in soybean acreages.

London cocoa prices ended near a four-year high on concerns over west African mid-crops from dry weather. London cocoa futures ended at £1,058 a tonne, up £4 on the day.

Currencies - The Dollar fell sharply Friday after the US said it would no longer exempt some Chinese companies from anti-subsidy laws.

The US said it would impose duties on imports of coated paper from China, reversing a policy of not applying duties to subsidised goods from “non-market economies”. Traders said the move could add to US inflationary pressures and cut demand for US assets.

The Dollar was already under pressure against the Euro amid signs of weakness in the US economy this week. Data on Monday showed new US home sales fell to their lowest level in seven years, while weaker- than-expected US consumer confidence and durable goods orders ensured the Dollar remained on the back foot.

Meanwhile, the Euro was boosted by an unexpected rise in Germany’s Ifo index of business sentiment and a larger-than-expected drop in German unemployment.

I expect the European Central Bank to raise Eurozone interest rates from 3.75% to 4.5% by the end of the year.  The uncertainty about the impact of the VAT hike on GDP growth in Germany has disappeared.

Over the week, the Dollar fell 0.8% to $1.3395 against the Euro, dropped 0.6% to Y117.30 against the Yen and fell 0.5% to $1.9710 against the Pound.

Earlier in the week, the Yen was the main mover in the currency markets as investors’ attention was focused on the mounting tensions in the Persian Gulf.

The Yen jumped more than 1% against the Dollar and the Euro on Wednesday amid rumours – quickly denied – that US and Iranian forces had engaged in military conflict.

The rumours rattled equity markets and sent oil prices sharply higher. Analysts said the resulting rise in risk aversion saw investors unwind carry trades, in which the purchase of riskier high-yielding assets is funded by selling low-yielding currencies such as the Yen. However, as calm returned to the global stock markets later in the week, the Yen gave back its gains as renewed appetite for carry trades returned.

News that Japanese consumer price inflation had fallen back into negative territory for the first time in 10 months added to the pressure on the Yen Friday. The Yen lost 0.3% to Y157.20 against the Euro on the week and 0.1% to Y231.60 against Sterling.

Elsewhere, higher energy prices helped oil-dependent currencies, sending the Norwegian Krone 0.9% higher to NKr6.0680 against the Dollar and the Canadian Dollar up 0.8% to C$1.1520 against its US counterpart.

The Pound fell 0.3% to $0.6791 against the Dollar on the week as figures revealed the UK current account deficit widened to 3.8% of GDP in the fourth quarter.

The South African Rand was a touch firmer against the US Dollar on Friday, tracking emerging market trends and also cheered in part by a lower February trade deficit, although pressure lurked from higher fuel import costs. The Rand was at R7.2530/$, up just 0.10% from its Thursday New York close of R7.26. The local unit treaded a R7.23/30 range during Friday's session.

The Australian Dollar has touched its highest level in more than 10 years on growing expectations that the Reserve Bank of Australia may raise interest rates.  On Tuesday, the Dollar reached a high of 81.09 US cents, its highest level since December 3, 1996.

In fact, the chance of higher interest rates here has fuelled the Australian Dollar to trade well above the 80 US cents level for the past 2 weeks now.

Rounding out currencies this week with China where the RMB finished at 7.302 to the Dollar on the over-the-counter (OTC) market, compared with Thursday's close of 7.7270.

China - Gross domestic product is expected to rise by 10% both in the first half of 2007 and over the full year, with the consumer price index seen up 2.3%, the research bureau of the People's Bank of China said.

In a report published in the official China Securities Journal, the bureau said that the expected slowdown of Chinese economic growth in this year is on the back of falling investment growth onshore and weaker external demand.

It also projected GDP to grow 10.2% in the first quarter, 9.85% in the second quarter, 9.80% in the third quarter and 10.05% in the fourth quarter.

The research bureau noted that the PBoC has used a combination of policy tools, including open market operations, interest rate hikes, reserve requirement hikes and special bills to bring liquidity conditions under control and slow investment growth.

It did added that it expects the US Federal Reserve to cut interest rates in the both third and fourth quarters of the year, the European Central Bank (other-otc: CHPA.PK - news - people ) to raise rates two or three times in the first half and for the Bank of Japan to continue raising rates.

The rate actions come amid cooling global growth, the research department said, although Chinese export volumes should be largely resilient.

'The trade surplus will remain large in the first half but will fall in the second half,' it said, resulting in a shriking contribution of net exports to GDP.

'Export growth will remain high but the growth rate will slow a little in the second half,' it added.

Chinese exports grew by 27% in 2006, helping push the trade surplus up 74% to a record 177.5  billion usd. The government has said a central task for 2007 is to tackle the surplus's growth.

The bureau said import growth would not noticeably speed up because China is increasingly making the items that it used to import.

The research arm also forecast overall fixed-asset investment growth of around 22% this year, down from the 24% in 2006.

The PBoC has ruled out any sharp rise in the CPI, noting falling prices further upstream in the production chain.

It said CPI growth over the four quarters is seen at 2.35%, 2.25%, 2.50% and 1.90%.

'Inflation pressure has eased,' it said. 'The growth of the producer price index and purchasing prices for raw materials and fuel have slowed markedly.'

'The CPI will remain basically stable.'

The research bureau noted that the recent growth of consumer price inflation has come on the back of rising food prices, with poultry and meat prices contributing 45.8% to the growth of the CPI in January and February. It said that grain prices are pressuring inflation, but not to any great extent.

Elsewhere in China, China's top leaders have approved a program to build large commercial aircraft, lending crucial government support to plans to challenge the domination of Boeing and Airbus in the country's fast-growing aviation market.

A Cabinet meeting held last month approved ''in principle'' setting up a formal program for domestic to build large commercial aircraft, according to a statement seen Monday on the Web site of the State Council Information Office.

It said the decision followed a report by a group set up six months earlier to research the feasibility of the project.

No timeframe was given, but last week a top official of state-owned China Aviation Industry Corporation I, or AVIC I, said that the company planned to start making large aircraft by 2020.

China has set a target of completing designs for a large aircraft by 2010 and has proposed producing its own aircraft engines.

China plans test flights of its first commercial jet aircraft, the mid-sized ARJ-21 regional jet, by next year. It also is seeking Federal Aviation Administration approval of the jet with a mind toward selling the ARJ-21 in overseas markets.

With China expected to buy 2,230 new planes between now and 2025, the government has fast-tracked development plans to ensure that its own companies grab a share.

China abandoned a project to build large aircraft in the 1970s, although local manufacturers already make many components for both Boeing Co. and Airbus SA. Airbus recently agreed to open a final assembly line for its mid-size A320 aircraft in the northern city of Tianjin.

Large aircraft generally have about 200 seats or more and a payload of 100 tons. Initial versions of the ARJ, or ''Advanced Regional Jet,'' are expected to carry 70-110 passengers.

The Cabinet resolved to build an ''internationally competitive product,'' the statement said. Among key objectives was to ensure that domestic companies develop their own technology, while using international cooperation.

Chicago-based Boeing took an early lead in Chinese aircraft market, selling more than 700 planes here since 1972, including 60 orders for the company's new 787 Dreamliner.

Chinese airlines also have about 100 Airbus planes in their fleets with dozens more on order, including five of the company's troubled A380 super jumbo.