US Markets - Wall Street dropped late on Friday, hurtling the Dow Jones industrial average down more than 280 points after comments from a Bear Stearns executive reinvigorated the market's fears of a widening credit crunch.

The drop of more than 2% in major stock market indexes was a fitting end to two volatile weeks on Wall Street and followed back-to-back late-day triple digit gains in the Dow. This time, the catalyst for a sharp skid was Bear Stearns Cos. Chief Financial Officer Sam Molinaro, who described turmoil in the credit market as the worst he'd seen in 22 years.

According to preliminary calculations, the Dow fell 281.42, or 2.09%, to 13,181.91.

Broader stock indicators also fell. The Standard & Poor's 500 index dropped 39.14, or 2.66%, to 1,433.06, and the Nasdaq composite index fell 64.73, or 2.51%, to 2,111.25.

Small-capitalization stocks were hit hard again Friday, partly because the global economy is growing faster than that of the United States. Investors often contend profits at larger companies are more likely to hold up amid a US slowdown because much of their business is drawn from overseas. The Russell 2000 index of small-capitalization stocks fell 28.58, or 3.65%, to 755.41.

The session also saw a notable rise in the bond market, as investors fled to the relative safety of fixed-income investments. The yield on benchmark 10-year Treasury note fell to 4.70% from 4.77% late Thursday. Bond prices move opposite yields.

Stocks started the day with a decline after the government said jobs growth was not as strong as expected last month and a trade group reported that the nation's service sector grew at a slower pace than expected in July. Then, credit concerns, which have dogged investors for months and have roiled markets since last week, weighed on investor sentiment again; Standard & Poor's Ratings Services lowered its credit outlook on Bear Stearns Cos. to negative from stable because of the investment bank's exposure to the distressed mortgage and corporate buyout markets. The stock fell $7.28, or 6.3%, to $108.35.

Investors remain worried that problems in subprime mortgages - those made to borrowers with poor credit histories - will force lenders to make credit less available. When people and companies can't borrow money as easily, the economy tends to slow down.

Investors could be in for more volatility in the coming week, which not only includes economic figures on productivity and consumer credit, but also brings a meeting of the Federal Reserve's Open Market Committee, which has left short-term interest rates unchanged for the past year. Investors will likely be looking to its statement following its meeting for any word on the mortgage and credit markets.

The unease over the mortgage market and tightening credit Friday again dragged down financial stocks, which have been hard hit in recent weeks. Lehman Brothers Holdings Inc. fell $4.67, or 7.7%, to $55.78; its previous 52-week low was $58.85. Merrill Lynch & Co. fell $2.50, or 3.5%, to $70.05. During the session the stock fell below its previous 52-week low of $69.14.

Investors also fled lenders. American Home Mortgage Investment Corp. confirmed late Thursday it has stopped taking mortgage applications and is laying off most of its 7,000 staffers. American Home dropped 75 cents, or 52%, to 70 cents.

Countrywide Financial Corp. fell $1.77, or 6.6%, to $25. The nation's biggest mortgage lender said Thursday it has adequate access to cash and isn't facing the liquidity crunch that is hitting dozens of other smaller players.

In economic news, which didn't provide much reason for investors to look past the mortgage and credit concerns, the Labor Department said nonfarm payrolls rose 92,000 last month, less than the 132,000 jobs created in June and below the average forecast of about 135,000. Also, unemployment ticked up to 4.6% - a six-month high - from 4.5% in June. Still, overall unemployment remains low, analysts noted.

Also, the Institute for Supply Management said its non-manufacturing index for July fell to 55.8 from 60.7 in June. Wall Street had expected a reading of 59, according to Thomson Financial/IFR.

Investors still uncertain about the effect of rising subprime mortgage defaults on the broader economy have regarded the stable job market and consumer spending as signs the economy might hold up despite a tighter lending climate. That's because people with steady paychecks are more likely to keep spending and pay back their debt. At the same time, some pullback in employment might ease some concerns about wage inflation.

In other corporate news, Procter & Gamble Co., one of the 30 components of the Dow industrials, reported a rise in quarterly profit that beat expectations and announced plans to repurchase stock. P&G fell 42 cents to $62.88.

Toyota, poised to overtake General Motors Corp. this year as the world's biggest automaker, said profit in the most recent quarter soared 32% amid strong overseas sales and a weaker Yen. Toyota rose 31 cents to $118.90.

Declining issues outnumbered advancers by about 5 to 1 on the New York Stock Exchange, where volume came to 2.11 billion shares compared with 1.15 billion traded Thursday.

European Markets - European equity markets endured a second consecutive week in the red as the subprime crisis roiling credit markets deepened.

The FTSE Eurofirst 300 shed 0.2% on the week to 1,517.16. Germany’s Xetra Dax also slipped 0.2% to 7,435.67 while, in Paris, the CAC 40 lost 0.8% to 5,597.89.

Starting with France where in Paris, Share prices closed broadly lower as profit-taking early in the day persisted amid Wall Street's decline on disappointing US jobs data and renewed concerns about housing lenders.

The CAC-40 index finished down 84.18 points or 1.48% at 5,597.89. Of the shares in the CAC-40, 39 closed lower and 1 closed higher.

On the Matif, August CAC-40 futures were trading at 5,598.0.

Recent large gainers bore the brunt of the profit-taking. Lafarge had the biggest%age decline among blue chips, closing down 4.07% at 120.10 Eur, after previously rising on strong first half results.

Alcatel-Lucent ended down 3.46% at 8.37 Eur, and Accor closed 3.35% lower at 59.51 Eur.

Air France-KLM finished 2.25% lower at 32.56. It said two of its regional airlines jointly placed a firm order for 20 Embraer planes. The cost was estimated at 1  billion usd.

Total closed 2.40% lower at 54.71. Oil prices dropped today from near-record prices after the weak US jobs report prompted fears that the oil market was overbought.

Aerospace company EADS, which confirmed it had finalised a Libyan missile contract, finished down 1.17% at 21.92 Eur.

Air Liquide closed down 1.08% at 92.71 Eur. It reiterated its full year guidance after posting a 15.9% rise in its first half net profit.

The only gainer among the blue chips was Pernod Ricard, which rose 0.29% to close at 154.20 Eur.

Into The Netherlands now where Shares closed lower in Amsterdam after slipping further behind in the late afternoon in line with a poor performance on Wall Street that was fuelled by US jobs data, while two companies that reported earnings yesterday, Corporate Express and Nutreco, bucked the negative trend.

The AEX closed 6.24 points or 1.18% lower at 521.52 after opening at 528.13 and trading in a range of 520.10-528.36.

With the staffing sector under pressure throughout the day, Vedior closed 3.29% lower at 18.49 Eur and Randstad closed 1.43% lower at 46.13. Midcap staffing company USG People shed 6.25% at 27.00.

ING was off by 2.05% at 30.07 and Hagemeyer slipped 2.09% at 3.73, while Royal Dutch Shell declined 1.82% to 27.45 amid news it will sell its minority stake in oil and gas producer RAG.

Reed Elsevier was off by 1.50% at 13.12 while Unilever fell 1.55% at 22.15, continuing to surrender early gains on the back of yesterday's earnings, an upgrade to 'buy' from 'hold' and multiple price target increases.

Fortis closed 0.38% lower at 28.48 Eur while the market awaits the results of Monday's extraordinary shareholders meeting, at which the company's consortium bid for ABN Amro will be discussed. ABN Amro CEO Rijkman Groenink made the news this morning by encouraging Fortis shareholders to vote against the bid.

ABN Amro meanwhile closed 0.54% higher at 35.05 Eur.

Among other decliners, Akzo Nobel lost 1.05% at 59.55 and TomTom dipped 1.12% at 47.81, surrendering early gains on the back of Nokia sales pointing to increased demand for navigation devices. Map maker and TomTom takeover target Tele Atlas closed 0.05% higher at 21.00.

Ahold gave up 1.10% at 9.02 after presenting an in-line trading update this morning and ASML closed 0.70% lower at 21.23 after profiting earlier from chip sales in Asia.

Corporate Express stood out as the lead outperformer on the AEX, closing 1.11% higher at 10.06 on speculation about corporate action in light of the company's ongoing strategic review and yesterday's disappointing results.

Publisher Wolters Kluwer added 0.05% at 21.49 Eur just before close and Numico closed 0.04% firmer at 53.60 Eur after presenting second-quarter results of its own this morning, beating analysts' expectations. The share was nonetheless downgraded to 'hold' from 'buy' at ING, which sees little movement in the share in the coming months because of Groupe Danone's takeover offer.

Among major midcap decliners, Aalberts Industries lost 2.62% at 19.30, while Boskalis fell 1.65% to 27.34 and LogicaCMG slipped 1.72% to 2.29.

The construction sector was also under pressure, with Heijmans weakening 1.92% to 40.41 Eur and BAM closing 1.14% lighter at 20.75.

Nutreco was the main midcap gainer, rising 3.73% at 55.35, continuing to profit from yesterday's better-than-expected earnings, as well as an upgrade to 'buy' from Theodoor Gilissen.

Stork was also higher, closing up 1.46% at 48.55 Eur amongst renewed speculation and media speculation that Candover will either raise its 47 Eur per share takeover offer to get around the objection of Marel, which owns a quarter of Stork and has said it will not tender its shares, or lower the shareholder acceptance threshold needed for the bid to become unconditional, which is currently 80%.

Outperforming among local listings, Nieuwe Steen Investments closed 0.35% higher at 20.12 after climbing higher earlier in the day after the company confirmed it had rejected a takeover offer in February from a company that now holds 20% of its shares.

Across in Frankfurt German shares closed lower as jitters over the impact of the subprime loan crisis in the US dragged down financial stocks and as disappointment that the US economy had created fewer jobs than expected further weighed on the market.

The DAX closed 98.46 points or 1.31% lower at 7,435.67, having traded between 7,419.84 and 7,566.64.

The MDAX lost 153.98 points or 1.45% to 10,467.94 points, while the TecDAX was at 903.09 points, having declined 0.67 points or 0.07%.

DAX futures were down 134.00 or 1.80% at 7,472.00, while bund futures were at 112.98, down 0.39 or 0.35%.

In Frankfurt financial stocks slumped as investors worried that some banks may be harder hit than previously thought by a crisis in the US subprime mortgage market.

Hypo Real Estate led blue-chip stocks down, closing 2.78 Eur or 6.33% lower at 41.16 Eur.

MDAX-listed peer DEPFA, which is merging with Hypo Real Estate, slumped 0.71 Eur or 8.25% to 18.46 Eur.

Both Hypo and DEPFA said, however, that they will not be impacted by the current crisis in the sector.

Allianz was also not spared the roller-coaster ride related to the subprime market. Its shares closed 2.81 Eur or 1.79% lower at 153.79.

Although the insurer released strong second-quarter figures today, it came also under pressure due to worries about its exposure to the subprime market, especially through its Dresdner Bank unit.

Allianz CFO Helmut Perlet said the company's total exposure to the US subprime loan market amounts to 1.7  billion Eur but the company does not foresee any 'alarming developments' for its operations due to the US subprime crisis.

Bucking today's negative trend, Volkswagen was up 1.63 Eur or 1.18% at 139.23 Eur, leading gainers.

Deutsche Post added 0.21 Eur or 0.99% to 21.36 Eur after the German postal giant posted second-quarter figures which beat analyst and market expectations.

Lufthansa added 0.14 Eur or 0.67% to 21.04 Eur and Adidas rose 0.20 Eur or 0.47% to 42.75 Eur.

Over on the MDAX, Pfleider dropped 1.66 Eur or 8.25% to 18.46 Eur as the index's worst performer, while IKB rose 0.49 Eur or 3.98% to 12.80 Eur, rebounding from this week's heavy losses, which cut the company's market value by more than 40% in four days.

TecDAX-listed Morphosys was the worst performer on its index, down 2.18 Eur or 5.47% to 37.64 Eur, while Aixtron gained 0.43 Eur or 8.01% to 5.80 Eur.

Into Belgium now where in Brussels Shares closed lower, impacted by Wall Street losses, with steel cord and wire manufacturer Bekaert and supermarket group Delhaize heading the blue-chip fallers.

At the close, the Bel 20 was down 45.14 points or 1.04% at 4,281.14.

Bekaert was down 4.32 Eur or 4.02% at 103.02 Eur and Delhaize fell 2.20 Eur or 3.20% to 66.45 Eur.

Utility Suez fell 0.60 Eur or 1.55% to 38.04 Eur and holding group GBL was down 1.27 Eur or 1.46% at 85.56 Eur.

Former shareholder Deminor Active Governance Fund and other ex-minority shareholders in Electrabel say that Suez will reap large profits as a result of the Belgian coalition partners' decision to keep five out of seven of the country's nuclear plants open, financial daily De Tijd reports.

For the heavyweight financials, KBC Group was down 1.29 Eur or 1.37% at 92.71 Eur, Dexia was down 0.18 Eur or 0.89% at 19.95 Eur and Fortis fell 0.15 Eur or 0.52% to 28.44 Eur.

ABN Amro has advised Fortis shareholders to vote against the takeover bid for the Dutch bank that Fortis is making as part of a consortium, the Financieele Dagblad newspaper reported.

Separately, the ongoing undervaluation of shares in Fortis is 'simply not justified' and represents an excellent buying opportunity, according to Degroof, which reiterated its 'buy' rating and 39.50 Eur target price on the stock.

Dexia was up earlier after after the majority of its Dutch clients accepted a court settlement on a long-standing dispute over the bank's equity lease products, and was also pushed up by recovery from a recent lag in share price.

For the gainers, discount supermarket group Colruyt was up 0.37 Eur or 0.24% at 152.32 Eur and brewer InBev was up 0.06 Eur or 0.10% at 59.52 Eur.

Outside the Bel 20, Telenet was down 0.15 Eur or 0.61% at 24.35 Eur. Degroof upped its rating on the cable and telecoms group to 'hold' from 'reduce', with a target price of 25.09 Eur, on valuation grounds.

The company is expected to post solid second quarter results on Monday after the market close with sales and EBITDA at the top end of its guidance, according to analysts polled by Thomson Financial News.

Net profit is expected to rise to 11.3-16.5  million Eur from a net loss of 6.2  million Eur last year, and second quarter EBITDA is forecast to climb to 104.7-106.6  million Eur from 93.8 in the first half of 2006.

Second quarter sales are seen at 229.0-232.0  million Eur against 200.0  million Eur a year earlier.

Chemicals group Tessenderlo was down 1.41 Eur or 3.45% at 39.51 Eur and shipping group Euronav fell 1.18 Eur or 4.56% to 24.69 Eur.

Melexis was up 0.08 Eur or 0.63% at 12.74 Eur. KBC Securities told investors to eye a buying opportunity with the automotive semiconductor manufacturer on valuation grounds.

Analyst Nico Melsens said in a note to clients that despite 'fairly weak' second quarter results, the share remains a key buying opportunity after a downside run.

Barco was down 0.92 Eur or 1.29% at 70.58 Eur. KBC increased its target price for imaging and software technology group to 75.00 Eur after it updated its earnings model following positive second quarter results, and says it believes 'a large acquisition is on the cards'.

Over to Switzerland now where in Zurich Share prices closed lower across-the-board, led down by Givaudan after the Swiss flavour and fragrance maker disappointed expectations with its first-half results.

At the close, the Swiss Market Index was 104.25 points, or 1.2%, lower at 8,671,43, while the Swiss Performance Index fell 1.1%, or 76.96 points, to close at 7,113.28.

The Euro fell to 1.6438 SFr, while the Dollar was lower at 1.1941 SFr.

Givaudan fell sharply, losing 44 SFr, or 3.9%, to close at 1,083, after the Swiss flavour and fragrance maker reported a lower-than-forecast first half net profit and higher integration costs.

Givaudan's first-half net profit dropped to 86  million SFr, down from 266  million SFr, reflecting integration costs of 100  million SFr and an additional 84  million amortisation of intangible assets resulting from the Quest acquisition.

Other key decliners included Clariant, which closed 0.25 SFr, or 1.4% lower at 17.50, extending yesterday's losses after reporting disappointing second quarter margins.

Swiss Life plunged 10 SFr, or 3.4%, to close at 283.75, after giving back 7 SFr per share to investors in a par value reduction.

Peer Zurich Financial also closed 1.3%, or 4.50 SFr lower at 340.75.

In other financials, Credit Suisse fell 0.75 SFr, closing at 79.80, after giving up earlier gains on yesterday's expectation-beating first-half results.

Peer UBS also yielded 0.90 SFr, or 1.3% to close at 65.65, while Julius Baer dropped 2.3%, or 1.85 SFr, to close at 79.50.

Among pharma stocks, Novartis fell 0.35 SFr to close at 64.45, while Roche dropped 1.9%, or 4.10 SFr, to close at 209.10, after its Chugai Pharmaceutical unit announced it is voluntarily recalling Vesanoid capsules used as a treatment for acute promyelocytic leukaemia.

The recall follows the discovery of bovine-derived material sourced from Canada in a specific batch of the capsules that was imported from Roche in Switzerland.

Fellow heavyweight Nestle closed 4.25 SFr lower at 456.00.

Outside the SMI, Petroplus dropped 0.10 SFr to close at 122.00, trimming earlier gains after Lehman Brothers upped the group to 'overweight' from 'equal-weight' and raised the target price to 150 SFr from 135 SFr.

In Austria , Vienna saw its market close lower as investors looked to lock in profits in blue chip stocks.

The ATX closed down 1.20% or 56.20 points at 4,618.43. The ATX Prime closed down 1.29% or 29.99 points at 2,287.35.

Despite having next to no exposure to the US subprime mortgage markets, Austrian banks Erste and Raiffeisen International both closed lower.

Erste Bank slipped 1.27% to 54.40 Eur. Erste Banks chief executive Andreas Treichl said this week at a press conference for the companys second quarter results that the banks exposure to the US subprime mortgage market amounts to 2  million Eur only.

Raiffeisen International fell 2.12% to 108.65 Eur.

Shares in OMV closed down, shedding 2.70% to 44.76 Eur.

Steel company voestalpine dropped 2.13% to last deal at 59.70 Eur.

Also closing down on profit taking, RHI retreated 0.68% to 37.93 Eur, Zumtobel fell 1.14% to 27.75 Eur and Intercell slipped 0.34% to 26.54 Eur.

Managing to remain in positive territory throughout the session, Andritz closed up 1.02% at 51.27 Eur after the engineering group reported second-quarter results that beat analyst consensus and said it expects its full-year results to come in at new record levels.

Wienerberger also closed up, gaining 1.10% to 53.48 Eur on the back of a ratings upgrade to accumulate by Erste Bank after the bricks and roof tile giant recently revised its earnings growth target for the year by 15%.

On the broader ATX Prime index shares in Wolford rose for the second day after after Erste Bank analysts reiterated their accumulate rating and target price of 44 Eur on strong sales growth for the 2007-08 year reported last week. Wolford closed up 1.48% at 36.26 Eur.

Heading into the Nordic arena now and starting with Finland where in Helsinki Shares closed sharply lower with Wartsila sliding on the back of its second-quarter report.

The OMX Helsinki 25 index finished 2.06% lower at 3,090.53, and down about 1.1% over the week.

The OMX Helsinki all-share index today dipped 1.94% to 11,136.20, with turnover at about 1.85  billion Eur.

Wartsila fell 8.52% to end the session at 47.00 Eur after reporting quarterly profits and sales below expectations, but keeping its full-year guidance intact.

The broadly negative mood saw Neste Oil hand back initial gains on the back of its own second-quarter report. The share closed 2.86% lower at 24.75 Eur. The refiner's earnings came in just above expectations in a Thomson FirstCall poll. OKO Bank Friday afternoon repeated its 'accumulate' rating on the stock.

Nokia also fell, retreating from five-year highs inspired by impressive quarterly results from the group yesterday. The stock finished down 2.15% at 21.82 Eur.

Credit Suisse has upgraded Nokia to 'outperform' from 'neutral' with an increased target price of 27 Eur from 22.50 Eur, while Deutsche Bank repeated its 'buy' rating and upped its target price to 24 Eur from 22 Eur.

Among other technology shares, TietoEnator ended down 0.23% at 17.34 Eur and Elisa down 1.73% at 19.87 Eur. Software company Tekla was the bourse's biggest faller, losing 18.38% to 10.61 Eur after filing disappointing April-June earnings and sales.

In industry, Outokumpu fell 2.83% to 21.97 Eur, Rautaruukki 5.02% to 41.21 Eur and Outotec 4.15% to 41.31 Eur.

Into Sweden where Stockholm shares fared much the same as the rest of Europe.

The OMX Stockholm index closed down 1.20% at 395.76, its lowest level since March, while the OMX Stockholm 30 index closed down 1.22% at 1,220.76. Turnover was 20.00  billion SKr.

In total on the market 48 shares closed higher, 40 unchanged, and 219 lower.

The disappointing US jobs data was the last straw for investors and helped send the index to its lowest level since mid-March.

Among major losers on the index, SSAB A closed down 3.88% at 235.50, Electrolux B down 2.94% at 165, NCC B down 2.71% at 161.50, and Sandvik down 2.17% at 135.

Retailing stocks bucked the market, with Hennes & Mauritz B closing up 0.39% at 390.50 SKr after Carnegie hiked its recommendation on the share to 'Outperform' from 'Neutral' citing a strong outlook and a return to attractive multiples.

Lindex also closed up 1.69% at 90.25.

Truck maker Volvo B also closed up 0.82% at 122.75.

Elsewhere the market was pretty much lower across the board.

Ericsson B closed down 0.85% at 25.56 SKr.

Industrivaerden A closed down 2.21% at 143.50. The industrial holding investment company said that its net asset value per share increased to 181 SKr on June 30, and 178 SKr on July 31, from 151 SKr at year-end, mostly due to share price gains in Sandvik and SSAB.

During the first half, the company purchased shares worth 4.4  billion SKr and sold shares worth 2.1  billion.

Among other leading stocks, Swedbank A closed down 1.43% at 241.50, Atlas Copco A down 2.77% at 114.25, TeliaSonera down 0.49% at 51.25, and Boliden down 1.96% at 150.

Neighbours Denmark also saw Share prices close lower, following rises earlier in the day, while DSV and Novo Nordisk were higher as the market reacted positively to their respective half year reports.

The OMXC20 index was down 4.25 points at 495.86 and the OMXCB Benchmark index shed 3.29 points to 475.46.

The OMXC All Share index closed 3.90 points lower at 486.82, on turnover of 4.217  billion DKr.

Novo Nordisk was up 16.00 DKr at 600.00 after it posted a strong first half report including better-than-expected gross margins and an upgraded full year guidance.

The group raised its full year guidance for operating profit growth to 10% from a previous 6-8%, as its first half operating profit increased 14% year-on-year to 5.134  billion DKr, boosted by a gross margin increase to 77.0% from 75.0%.

DSV gained 3.50 DKr to 124.75 following a first half report largely in line with expectations and a 500  million DKr share buy-back programme announcement.

The transport group posted a first half pretax profit of 645  million DKr, up from 391  million DKr a year earlier, but said that on an underlying basis pretax profits rose 95  million DKr.

Market expectations were for 639  million DKr, according to a survey of analysts by SME Direkt.

Sales were up 13.5% at 17.074  billion DKr, versus market expectations for 17.405  billion DKr.

FL Smidth was down 5.50 DKr at 471.00. The engineering group said it has signed a contract worth approximately 100  million usd (540  million DKr) to deliver a new production line and additional aftermarket services to Colombian cement manufacturer Cementos Argos SA.

Vestas Wind Systems shed 6.50 DKr to 358.50. The group announced it has won two orders each comprising 25 units of its V80-2.0 MW wind turbines from the Chinese state-owned utility company China Long Yuan Electric Power Group Corp.

DS Torm fell 3.00 DKr to 213.00. The shipping transport company said it and US-based peer Teekay Corp have agreed on a distribution of the assets of the shipping group OMI which they jointly acquired earlier this year.

Under the distribution deal Torm will take 24 product tankers together with OMI's technical operations in India and part of its organisation in the US.

Danske Bank was down 4.50 DKr at 226.25. Direkt news agency said, citing analysts, the bank is the most likely bidder for Swedish state mortgage lender SBAB, which is expected to be sold by the Swedish government.

The bank is expected on August 9 to report a first half pretax profit of 10.264  billion DKr, up 21% from a year earlier, and positively affected by a 28% increase in net interest income to 11.903  billion DKr, according to a survey of analysts by RB Boersen.

TDC shed 3.00 DKr to 262.00. Daily Jyllandsposten said the telecom group may face a 1.4  billion DKr cost as regulators call for higher allocations to its pension funds.

GN Store Nord was flat at 58.25, following share price turbulence in recent days after an appeals court in Dusseldorf said the German Federal Cartel Office's ban on GN's sale of hearing aid business Resound to Sonova (formerly Phonak) remains in place until the court's final decision is announced on August 8.

Among other shares, AP Moller Maersk was down 700 DKr at 71,200, Danisco fell 8.50 DKr to 400.50 and ALK Abello gained 12.00 DKr to 1,140.00.

And rounding out Scandinavia this week, we go to Norway where in Oslo Share prices closed lower, led down by paper maker Norske Skog on disappointing second quarter quarter results, and by fertiliser group Yara as urea prices continued to retreat.

The OSEBX Benchmark index closed down 1.8% to 479.27 points, while the OSEAX All Share index shed 1.56% to 555.94 points.

Total turnover amounted to 8.8  billion NKr.

On the results front, industrials were led lower by Norske Skog, one of the world's biggest newspaper and magazine paper producers, which dragged down overall sentiment after it produced second quarter operating profit, pretax profit and sales below consensus - and delivered guidance that analysts said was bleak.

It closed off just under 7% at 74.50 NKr as analysts rated the performance as very poor, leading them to predict more downgrades of the share's rating by investment banks.

Also among industrials, Yara International declined 3.6% to 146.50 NKr as investors fretted about declining urea prices.

Fishing companies came off sharply on a health scare in Chile.

Cermaq fell 5% to 95 NKr and seafoods company Marine Harvest sank 1.8% to 6.69 NKr, on concerns that its operations in Chile could at some stage be impacted by fish disease.

Norwegian business paper Dagens Næringsliv earlier reported that Marine Harvest and Cermaq had received reports of the ILA virus from salmon farms in Chile.

The CEO of Cermaq was quoted as saying there was no need to panic.

Other seafood companies, with no apparent connection to Chile, were also dragged lower by the sentiment. Grieg Seafood was down 2.2% at 22 NKr while Aker Seafoods was down 4.55% at 42 NKr.

Among insurers, Storebrand gave back some of the ground gained the previous session, closing 0.86% off at 92.50 NKr.

On Thursday it closed 6 NKr higher at 93.3 NKr on speculation that a takeover bid might be brewing from Icelands Kaupthing Bank.

The same kind of reaction came from telecommunications group Telenor, which slipped 1.4% to 107.50, after bullish news pushed the stock up on previous day.

On Thursday Telenor added 4.5 NKr to 109 NKr after it won in its New York arbitration case against Alfa, a rival shareholder in Ukraine mobile operator Kyivstar.

Telenor had to deconsolidate Kyivstar's earnings from its accounts, hurting its results, because of serious and bitter legal disputes with Alfa. The court finding led some analyst to reason that a reconsolidation of Kyivstar might happen sooner, leading to an upward revision of Telenor's earnings estimates.

Statoil nonetheless fell 0.44% to 169.75 NKr on the day, while Norsk Hydro retreated 1.6% to 217 NKr.

Oil service stocks performed little better.

Petroleum Geo-Services shed 4.3% to 126.25 NKr while Fred Olsen Energy came off 3.7% to 273 NKr.

Also in the sector, Prosafe lost 1.5% to 89.50 NKr and Subsea 7 retreated 3.6% to 134.50 NKr.

Heading South now and starting with Athens where Greek shares closed lower in thin trade as investors took a wait-and-see approach on account of the fragile market sentiment.

The ASE general index fell 1% to 4,839.6 and blue chips lost 1.1% to 2,583.1. Mid caps slid 0.4% to 6,465.7 and small caps closed flat at 1,139.3.

Decliners outnumbered advancers 183 to 72 while 56 were unchanged in very thin trade of roughly 248  million Eur.

Refrigeration company Frigoglass grew 1.9% to 22.36 Eur after saying this morning that first half year net profit rose 20.7% year-on-year to 40.7  million Eur, driven by sales in the Cool Operations division. Brokers said the results were slightly ahead of expectations.

Engineering company Metka jumped 2.7% to 16.38 Eur after Euroxx Securities increased its target price to 18 Eur from 17 Eur on its solid second quarter results.

EFG Eurobank fell 0.8% to 26.7 Eur. Confirming the terms of its 1.3  billion Eur capital increase, it said it will issue 2 new shares for every 15 old at 20 Eur per share.

Bottler Coca-Cola HBC lost 2.8% to 32.06 Eur on profit taking after yesterdays sharp gains.

Refiner Hellenic Petroleum led blue chip gainers throughout the session and rose 0.9% to 10.6 Eur. It will announce first half year results next Wednesday which are expected to be robust on healthy refining margins and inventory gains.

Construction and energy holding company GEK closed 0.4% lower at 13.24 Eur. It announced Friday its Bulgarian unit Icon Eood has purchased a 16,356 sqm property in Borovec, Bulgaria for 19.6  million Eur.

Across in Spain Madrid's Share prices closed lower tracking the global market shakeout with Iberia slumping 5.48% following a profit warning from Spanish no frills peer Vueling blaming pricing pressures.

The IBEX-35 index closed down 144.30 points at 14,534.3, after trading in a range of 14,533-14,719.

Equities opened a touch higher, buoyed by Wall Street's broadly positive overnight showing, but soon moved into the red on light volumes with most of the main blue chips seeing profit-taking amid ongoing global credit concerns.

A weak opening on Wall Street following sluggish jobs data sent shares lower in afternoon deals.

Iberia was down 0.19 Eur or 5.48% at 3.28 after no frills rival Vueling issued a profit warning with disappointing first half results citing pricing pressures.

Vueling crashed 6.89 or 30.37% to 15.80.

Defying the market trend, Enagas was up 0.17 at 17.20 after obtaining approval to go ahead with the construction of a gas pipeline between mainland Spain and the Balearic Islands for a total investment of 490  million Eur.

Broadcasters were also strong, with Antena 3 up 0.06 at 13.92 and Telecinco 0.04 higher at 19.94.

The only other gainer of the day was Endesa, up 0.03 at 39.54 as investors awaited the board's statement on Acciona and Enel's joint bid.

Telefonica lost 0.08 to 17.43. Earlier, its Vivo joint venture with PT announced the purchase of controlling stakes in Telemig and Telenorte, two regional Brazilian wireless companies, for a total of 1.2  billion Reals. BPI analysts said the purchase is positive in both strategic and valuation terMs

Amongst other leading blue chips, Santander was down 0.16 at 13.51, amid fresh speculation that Fortis could pull out of the ABN Amro bid by its consortium including RBS and the Spanish bank.

BBVA was off 0.22 at 17.69, while Repsol YPF lost 0.51 to 27.06.

Abengoa was down 1.30 or 3.76% at 33.24 after a UBS downgraded to 'reduce' from 'neutral.'

And bringing Europe to a close this week we go to Italy where Milan markets closed lower, led by Seat PG on diminishing prospects of a takeover.

The Mibtel index was down 0.75% to 30,915 points, while the S&P/Mib lost 0.84% to 39,375.

Turnover was an estimated 4.942  billion Eur

Seat PG led the losers, down 2.47% to 0.3995 Eur, on worries potential private equity buyers will have to pay substantially to borrow funds to acquire the directory company, which is up for sale.

Banks were mixed, with some recovering ground after recent losses on financial market worries and derivative exposure.

Unicredito lost 0.77% to 6.195 after second quarter results above expectations, which brokers said supported the stock. Later, Unicredito sold some Polish operations to GE Money for less than expected.

Banco Popolare rose 2.65% to 17.96 after lengthy recent weakness on worries on derivatives at its Banca Italease affiliate, down 0.56% to 15.05.

BPM lost 2.13% to 10.22. Investors are disappointed in the bank's failure to merge.

Generali lost 1.39% to 29.00 after yesterday's positive reaction to first half results and resumption of a share buy-back programme.

Utilities were mostly on the negative side on worries about debt refinancing costs. Enel fell 1.72% to 7.42.

Eni fell 1.56% to 24.59.

On the positive side was Parmalat, up 3.40% to 2.585, though brokers said this was more related to yesterday's gains, rather than news today.

Alitalia, another volatile stock, rose 1.22% to 0.8055, gaining some support from trade unions' comments that Alitalia's new chairman Maurizio Prato wants to sell part of its service activities.

Fastweb was up 0.89% to 37.35 after results.

Telecom Italia lost 0.97% to 1.943. One broker said the stock was reacting to yesterday's raft of regulatory decisions, including a go-ahead for it to launch phone services combining fixed and mobile.

Luxottica lost 0.35% to 25.95, well off its lows, after a Lehman Brothers downgrade to 'equalweight', from 'overweight'.

Benetton gained 3.22% to 12.35 after higher than expected first half EBIT and a slight upgrade to full year sales guidance.

Italcementi was down 0.18% to 19.41 after lower than expected results.

Impregilo was suspended during the afternoon, down 1.57% to 5.585, pending a statement, seen by industry sources as linked to its troubled refuse contracts in the Campania region.

UK Market - London shares closed sharply lower, after US jobs data disappointed investors, and credit market worries resurfaced, enough to more than offset solid earnings from British Airways and Anglo American.

At the close, the FTSE 100 was down 76 points at 6,224.3, not far off the session low of 6,212.3, having been unable to build on opening gains which saw the index trade as high as 6,333.5.

The FTSE 250 was down 47.2 points at 11,185.8.

Volume was solid with 2.658  billion shares having changed hands in 602,814 deals.

In London, insurers helped take the market lower. Standard Life was 10-1/2 pence weaker at 305-3/4 pence ahead of the group's update on Tuesday. Panmure Gordon cut its price target, saying it believes there is better value elsewhere in the sector even after recent falls.

Peer Old Mutual was also sharply lower, down 7.7 pence at 155.1 pence, making it the biggest blue chip loser.

And Royal Bank of Scotland fell 16-1/2 pence to 575 as initial enthusiasm after the banking group's trading update gave way to concern about its sub-prime exposure as Panmure Gordon pointed out the group failed to update the market on this part of its business. Re-emerging rumours that consortium partner Fortis may have to pull out of the bid for ABN Amro also preyed on investors' minds.

Fortis shareholders will vote on the Belgo-Dutch banking group's fund-raising plans and the bid at Monday's Extraordinary General Meeting.

Oil stocks also underperformed with Brent futures trading at less than 75 usd a barrel, off recent highs. BG Group closed off 20 pence at 774. Vague talk of a bid for the gas exploration group failed to lift the shares as few gave any credence to the speculation. 'We hear this rumour every Friday it seems,' said one London based trader. Peers Royal Dutch Shell and BP were down 25 pence at 1,875 and 8-1/2 at 554-1/2 respectively.

In the real estate sector, Segro edged 13-1/2 lower to 519. Among mid caps, Capital & Regional was down 28-1/2 at 961-1/2, and Great Portland Estates fell 24-1/2 to 617-1/2. Credit Suisse has downgraded all three to 'underperform' from 'neutral'.

British Airways gave up earlier gains to close 1 pence lower at 402-3/4, having earlier risen to 426-1/2 as investors shrugged off news of hefty fines earlier in the week and focused on Q1 numbers which showed a pre-tax profit of 289  million stg in April-June 2007 compared with a pre-tax profit of 191  million stg in April-June last year.

The mining sector suffered the same fate. Anglo American fell 10 pence to 2,759, having been much higher earlier, after reporting a surge in first half operating profit and announced a further 4  billion usd in share buybacks on the back of continued strong cash flow.

It also announced its long-awaited decision to sell industrial metals business Tarmac as part of its ongoing restructuring programme.

In reaction, UBS said the numbers came in above its forecast and reiterated its 'buy' rating and 3800 pence target. It also thought the decision to sell Tarmac was the right one as it did not believe the division belonged in a focused mining group.

And Rio Tinto closed 28 pence down at 3,307, having been in positive territory after ABN Amro upgraded the shares to 'buy' from 'hold'.

Royal & Sun Alliance bucked the negative insurance trend, rising 2.2 pence to 131.2 after JP Morgan raised its rating to 'overweight' from 'neutral' ahead of the firm's H1 results due next week and to reflect the 19% upside to its 155 pence target.

Elsewhere, Cable & Wireless was also among the handful of risers, up 0-1/2 pence at 170 after Morgan Stanley upgraded its rating to 'overweight' from 'equal-weight' on valuation grounds.

The broker cut its price target for the telecommunications company's shares to 205p from 210p but changed its rating because there is a 21% implied upside to its new price target, after a market correction that had gone too far, it said.

On the second line, Tomkins topped the mid-cap risers, up 17-1/4 at 249-1/4 following stronger than forecast first half results which prompted Cazenove to raise its rating to 'in-line' from 'underperform'.

Elsewhere, Inchcape rose 18-1/4 to 487-1/2 after Citigroup upgraded its stance to 'buy' from 'hold' on valuation grounds.

And Cookson Group was 28-1/2 higher at 753-1/2 after yesterday's strong interims as Merrill Lynch, Goldman Sachs and Citigroup all lifted their price targets to 850 pence from 815, to 830 from 800, and to 815 from 745, respectively. The trio repeated their 'buy' ratings.

Bridgewell Securities upped its stance to 'buy' from 'overweight'.

Northumbrian Water was 9-3/4 pence lower at 320-1/4, giving up some of the gain it enjoyed yesterday after its AGM statement.

Japan & Asia Pacific - Asian shares rose on Friday as strong earnings helped firms shrug off global credit worries, while the Dollar steadied against the Yen ahead of US jobs data. Although most markets, other than China, still ended the week down overall.

Japan 's Nikkei average ended almost flat on Friday as cellphone parts makers such as TDK Corp. rose after Nokia's upbeat earnings results, but bank shares were hit by concerns about fallout from US subprime mortgage woes, adding fuel to bearish investor sentiment.

Shares of Sumitomo Realty & Development Co. Ltd. jumped nearly 5% after Japan's third-largest property firm posted a 50% rise in group quarterly operating profit and revised up its first-half forecast due to improved profit margins in its condominium business.

After opening higher, the Tokyo market had a volatile session, moving in and out of negative territory towards the end of trade.

The Nikkei ended the day down 0.03% or 4.25 points at 16,979.86.  The broader TOPIX index added 0.19% to 1,672.54.

Trade was active, with 2.1 billion shares changing hands, in line with last week's daily average volume. Declining shares outnumbered advancing ones by 920 to 686.

After the closing bell, Toyota Motor Corp. said its quarterly operating profit rose by a better-than-expected 32% as brisk European and North American sales combined with a softer Yen to make up for chronic weakness in domestic demand.

In Hong Kong , Share prices closed higher as select blue chips and China-related stocks rose, with sentiment buoyed by a record-breaking finish on the mainland market as investors there built strong positions in the financial sector on upbeat interim earnings.

The Hang Seng Index closed up 95.19 points or 0.42% at 22,538.44, off a low of 22,356.30 and a high of 22,644.58.

Turnover was 74.35 billion Hong Kong Dollars. For the week, the key index was down 31.97 points or 0.14%.

Select China stocks (listed in Hong Kong), especially financial counters which got A-shares also listed in China, also posted sharp gains in late trade.

China banks were sharply higher, with China Merchants Bank leading the sector's advance with a 1.50 hkd or 5.49% gain to close at 28.8. The stock was boosted by expectations that the company will report strong first-half results next Thursday.

China Construction Bank was up 0.08 hkd or 1.41% at 5.74, ICBC was up 0.06 hkd or 1.28% at 4.74 and BoComm up 0.03 hkd or 0.36% at 8.46.

China Life gained 0.20 hkd or 0.63% to 32.2, Ping An was up 1.35 hkd or 2.11% at 65.2, while PICC P&C was down 0.59 hkd or 6.03% at 9.2 after denying market rumors that it is planning to buy a life insurance operation in China.

The Hang Seng China Enterprises index was up 71 points or 0.56% at 12,779.67.

Among large-caps, HSBC closed up 0.4 hkd or 0.28% at 144.1, China Mobile gained 1.15 hkd or 1.32% to 88.60. HKEx was down 0.30 hkd or 0.28% at 106.4 and Hutchison Whampoa down 0.30 hkd or 0.37% at 81.0.

Among local banks, Hang Seng Bank was up 1.10 hkd or 0.93% at 119.60 and BOC Hong Kong was up 0.09 hkd or 0.45% at 20.05, reversing its early losses.

Bank of East Asia fell 0.60 hkd or 1.32% to 44.80 on profit-taking after the company reported its first-half results yesterday showing a net profit of 1.88 bln hkd for the six months to June, against 1.57 bln a year earlier.

South Korean share prices closed higher Friday, recouping some of their steep losses over the past two sessions, as investors took heart from Wall Street's second straight day of gains and as foreign investors reduced their liquidation activities.

The KOSPI index closed up 23.73 points or 1.3% at 1,876.80, after moving between 1,865.75 and 1,890.63. The index ended the week down 6.42 points or 0.3%.

POSCO was in the spotlight, up 16,000 Won or 3.1% at 526,000 Won, after Moody's Investors Service on Thursday placed the company's 'A2' long-term foreign currency rating on review for possible upgrade.

Volume was 344 million shares worth 5.7 trillion Won.

Rises outpaced falls by 523 to 242.

Institutions were net buyers of shares worth 209.9 billion Won, while foreign and retail investors were net sellers of 249.2 billion Won and 10.1 billion worth, respectively.

Samsung Electronics meanwhile was flat at 590,000 Won, trimming all earlier gains at the close, due to reports that operations at its key semiconductor chip production plant in South Korea's Giheung have been partially suspended due to a power outage.

Other technology counters were strong on bargain-hunting after the recent steep correction. LG Philips LCD rose 1,350 Won or 3.3% to 42,450 Won and LG Electronics jumped 1,300 Won or 1.7% to 78,800 Won.

Taiwan shares rallied for the second day on Friday on bargain-hunting following Wall Street gains overnight.

The Weighted Price Index of the Taiwan Stock Exchange rose 107.25 points, or 1.2%, to close at 9,057.82 in moderate volume.

Chi Mei Optoelectronics was up 4.5% at NT$37.00, after the company announced its third-quarter large LCD panel shipment was expected to rise 30% from the second quarter.

MediaTek gained 1.7% at NT$600, after the company forecast a 15-20% rise in third-quarter revenue compared with the second quarter.

Philippine share prices closed 0.2% lower Friday as continuing concerns over problems in the US home loan market killed off an attempted rally.

The composite index lost 6.78 points to 3,352.24, its lowest level since May 10 when it settled at 3,342.21.

On the day, the market was up 70 points to peak at 3,429.81 before ending lower and nearly five% down for the week.

The all-share index fell 23.50 points to 2,150.18.

Declines led gains 127 to 19, with 27 stocks unchanged.

Turnover was 5.3 billion shares worth 7.7 billion Pesos (168 million Dollars).

Philippine Long Distance Telephone bucked the broader market's decline, rebounding from steep losses earlier in the week ahead of the release of its results for the three months to June next Tuesday.

PLDT jumped 105 Pesos to 2,625. Ayala Land fell 75 centavos to 15 Pesos.

SM Investments was down 15 Pesos to 377.50. Megaworld Corp. was off 15 centavos to 3.40 Pesos.

San Miguel also fell back, with its A shares down one Peso to 67 and the B shares two Pesos lower to 69.

China A-shares rose sharply to close at fresh record levels, with investors building strong positions in financial stocks on upbeat interim earnings.

The Shanghai Composite Index, which covers both A- and B-shares listed on the Shanghai Stock Exchange, closed up 153.04 points or 3.47% at a record 4,560.77, surpassing Tuesday's previous record of 4,471.03.

Turnover rose to 173.67  billion yuan from 140.93  billion yuan in the previous session.

The index climbed rapidly in the two days following a 3.8% decline on Wednesday amid global worries about the US mortgage market.

Friday's record brings the market's gains so far this year to 70%. Analysts said recent gains are mainly driven by institutional investors, including mutual funds.

Assets managed by mutual fund companies surpassed 2 trln yuan as of July 31, double the level from the beginning of the year. They were equivalent to one third of the China markets' value, securities newspapers reported.

China Merchants Bank Co Ltd surged 3.00 yuan or 10% to 33.00, while Ping An Insurance (Group) Co of China Ltd soared 6.97 yuan to 88.79.

Industrial and Commercial Bank of China added 0.24 yuan to 5.82, while CITIC Securities Co Ltd gained 6.52 yuan or 10% to 71.95.

Indonesian shares closed slightly lower in volatile trade as quick profit taking emerged in the afternoon session which sent the main index to negative territory after a firm opening.

The composite index closed down 1.06 points, or 0.1%, at 2,269.79, off a high of 2,294.73 and a low of 2,259.10.

Volume was 4.66 billion shares valued at 3.1 trillion Rupiah. For the week, the main index fell 28.61 points or 1.2%.

The LQ-45 index was up 0.10 points at 470.22. Decliners led gainers 131 to 63, with 53 stocks unchanged.

Thai share prices closed higher Friday, marking the first rise in a week as sentiment turned upbeat in line with steader regional markets.

Buying spread across the board as investors bought back shares on bargain-hunting following recent losses.

The Stock Exchange of Thailand (SET) composite index rose 7.44 points or 0.9% to 837.73 and the blue chip SET 50 added 5.54 points to 599.53.

Singapore share prices closed a volatile session flat on Friday, earsing gains made earlier in the day with losses in banking shares.

The Straits Times Index closed up 0.58 points or 0.02% at 3,436.04, after trading between 3,422.90 and 3,474.31. For the week, the index lost 56.66 points or 1.64%.

Gainers led losers 500 to 334, with 781 shares unchanged. Volume traded was 2.00 billion shares valued at 2.21 billion Singapore Dollars.

Malaysian shares closed mixed Friday after a volatile session as investors continued to adopt a cautious stance ahead of the weekend.

Gains in construction, technology and consumer stocks helped the key index stay in positive territory.

The Kuala Lumpur Composite Index (KLCI) was up 2.14 points or 0.2% at 1,335.42, off a high of 1,350.09 and a low of 1,333.40.

For the week, the KLCI lost 19.96 points or 1.5%.

The FTSE Bursa Malaysia 30-large cap index lost 10.76 points or 0.1% to 8,422.82, while the second board index dropped 0.05 of a point or 0.04% to 113.40.

Losers led gainers 452 to 424, with 281 stocks unchanged and 202 counters untraded. Trading volume was 1.06 billion shares, valued at 1.81 billion Ringgit.

Index heavyweights closed mixed, with Telekom Malaysia adding 10 sen to 10.10 Ringgit, national power company Tenaga was unchanged at 10.70 ringgit, while Maybank, the largest lender in Malaysia by assets, was down 10 sen at 12.0 Ringgit.

Elsewhere, chip maker Unisem was unchanged at 1.54 ringgit on profit-taking after gaining earlier on an improved second quarter net profit.

Indian shares rose Friday, led by bank stocks such as the State Bank of India.

The Bombay Stock Exchange's 30-share Sensex index gained 153 points, or 1%, to close at 15,138 points.

On the broader National Stock Exchange, the 50-company S&P Nifty index rose 45 points, or 1%, to end at 4,402 points.

Among major gainers was the State Bank of India, which climbed 2.7% to 1,636 rupees. ICICI Bank rose 1.7% to 915 rupees.

Automobile stocks were also among the leaders, with Maruti Udyog Ltd. rising 1.7% to 850 rupees and Bajaj Auto Ltd. moving up 1.6% to 2,330 rupees.

Friday's solid, positive close came after two days of volatility.

Indian shares tumbled 4% on Wednesday as they tracked declines in other Asian markets and Wall Street.

The Sensex recorded its second biggest fall of the year Wednesday, shedding 615 points.

In Australia , the Australian market ended slightly higher Friday as the indexes mirrored Thursday's volatile trading, swinging between positive and negative territory as investors remain wary following the heavy losses earlier this week.

Most players were also taking a cautious stance ahead of tonight's jobs data in the US and the likelihood of another sell-off on Wall Street if the data comes in weaker than forecast.

The S&P/ASX 200 closed up 9.2 points or 0.2% at 6,021.0, having moved between 5,980.8 and 6,061.0.

Over the trading week, the key index lost 61.9 points or 1.0%, after already suffering a 2.8% plunge last Friday.

The All Ordinaries index added 5.6 points or just 0.1% to close at 6,055.9.

Volume traded reached 1.7 billion shares worth 5.4 billion Australian Dollars.

Losers narrowly beat gainers 643 to 641, with 312 stocks unchanged.

The S&P/ASX200 September futures contract was up 30 points at 6,002.

The yield on the 10-year bonds rose 0.0075%age point to 5.9475%, while the yield on the 90-day bills climbed 0.002%age point to 6.597%.

Leading investment bank Macquarie rose on bargain hunting after its sharp drop in recent sessions arising from exposure of its Fortress Fund to the US subprime mortgage market.

Macquarie shares regained 1.40 Dollars or 1.9% to finish at 75.00 while its Fortress Fund added 0.4 cents or 0.8% to 51.5 cents.

The major banks were mixed after strong gains in early trade. National Australia Bank ended unchanged at 38.00 Dollars, Commonwealth Bank gained 11 cents to 53.31 Dollars, ANZ rose 21 cents to 28.16 Dollars but Westpac fell 12 cents to 25.80 Dollars.

New Zealand share prices closed lower Friday after market leader Telecom NZ fell sharply.

The benchmark NZX-50 index closed 15.79 points or 0.38% to 4,122.41 on turnover worth 170.6 million NZ Dollars (131.0 million US).

Telecom fell 15 cents to a 10-month low of 4.32 NZ Dollars after forecasting a net profit of between 680 million and 720 million Dollars in the current fiscal year. This was below analysts expectations for around 757 million Dollars.

Telecom announced a bottom line annual profit of 3.02 billion Dollars for the past year to June, with two-thirds of it coming from the sale of the Yellow Pages directories business.

Fletcher Building surged 34 cents to 12.50 Dollars after announcing the planned closure of a board plant. The company also said it had purchased Australian-based AG&S Building Systems and Hi Tech Pty Ltd.

Contact Energy rose 13 cents to 9.30 Dollars while Fisher & Paykel Healthcare was up a cent at 3.29 Dollars and Fisher & Paykel Appliances lost nine cents to 3.48.

Commodities - A new record for crude oil prices was the eye-catching feature of a volatile week for commodities which displayed resilience despite the turbulence which dragged other risky assets lower.

West Texas Intermediate crude hit a record $78.77 a barrel in Wednesday’s session but profit-taking rapidly set in and prices fell subsequently.

Nymex September West Texas Intermediate retreated $1.08 to $75.78 Friday, down 1.6% this week. ICE September Brent lost 75 cents to $75.01 a barrel Friday, down 1.7% this week.

Speculators had built record levels of bets on price appreciation but they took advantage WTI’s surge to book profits.

With hurricane season approaching in the US, traders are watching weather forecasts carefully. Colorado State University expects 15 tropical storms with eight growing to hurricane strength

Wheat prices traded near recent 11-year highs this week. Global stockpiles have slid to a 30-year low and a significant decline in production this year is feared. Estimates for this year’s French crop have been reduced and Germany’s harvest has been delayed. French November milling wheat futures rose 0.2% to €210 a tonne this week.

In the UK, around 12% of this year’s wheat harvest is complete compared with 30% normally at this time. Canada’s Wheat Board has reduced its forecast to 20m tonnes, a 6% decline from the previous estimate of 21.2m tonnes.

In Chicago, CBOT September wheat eased 0.2% to $6.52 a bushel this week.

CBOT September corn rose 2.8% to $3.30 a bushel amid speculation that the US Department of Agriculture may reduce its current yield estimate from 150.30 bushels an acre.

Copper eased 0.7% to $7,710 a tonne this week, bolstered by strike action at Grupo Mexico’s Cananea mine. Goldman Sachs raised its forecast for copper prices in 2008 from $7,500 a tonne to $10,000 a tonne, part of an upbeat assessment for base metals prospects. Goldman said a period of relative calm appeared to be ending as demand was outpacing supply and warned further tightness could bring inventories back to critical levels, causing prices to spike.

Nickel fell 3.9% to $29,300 a tonne this week, sinking below the key $30,000 level as cutbacks by stainless steel producers weighed on sentiment.

Dollar weakness helped gold, up 1.4% to $669.70 a troy ounce this week.

Currencies - The Dollar staged a broad retreat Friday after weaker-than-expected US employment and business activity data overshadowed the turbulence of credit markets and focused minds back on the economy.

In July, 92,000 new jobs were created in the US, fewer than the 127,000 expected. The Institute for Supply Management also reported its index of activity in the services sector, which includes financial groups and retailers, fell more sharply than expected in July. The reports were the last major data before next week’s interest rate policy meeting of the Federal Reserve.

The Dollar Friday fell 0.5% against the Euro to $1.3767, and by 0.2% to $2.0400 against Sterling.

The US currency fell to its lowest level of the year against the Swiss franc, down 1.2% over the week to SFr1.1938.

On any normal week, Friday’s US data would have been the highlight but subprime mortgage and credit woes continued to trigger turbulence in financial markets which were light on liquidity.

The Dollar’s losses over the week were a product of this volatility as profits were taken from the US currency’s rally of the previous week. The Dollar had been boosted in that week by safe-haven US Treasuries and an unwinding of carry trades where low-yielding currencies like the Yen are sold to fund higher-yielding purchases.

Over the week, the currency was down 1% against the Euro and 0.9% against Sterling.

Against the Yen however, the Dollar remained 0.1% higher on the week as the Japanese currency’s recent rally also petered out. Having hit a 12-week high of Y118.05 against the Dollar early in the week, the Yen faded to stand at Y118.42, despite Friday’s 0.2% rally.

The Euro climbed 1% over the week to Y163.01, supported by growing expectations of a September interest rate increase from the European Central Bank.

At Thursday’s ECB meeting, rates were left at 4% but Jean-Claude Trichet, president, spoke of the need for “strong vigilance” on inflation, the bank’s code for an increase at the next meeting.

Markets are pricing in a quarter-point rise to 4.25% in September.

Sterling also rallied 1% this week against the Yen to Y241.57 as expectations remained in favour of further rate increases from the Bank of England, despite it leaving rates on hold at 5.75% at Thursday’s monetary policy meeting.

The Pound was little changed over the week against the Euro at £0.6745.

South Africa's Rand was weaker against the Dollar in late Friday trade - giving up its earlier gains - as the greenback's own softness against the Yen brought risky-asset jitters back to the fore.

The Rand was trading at 7.1135 against the Dollar, down 0.33% from New York's Thursday close of 7.09, having earlier strengthened to 7.0360 as some market players liquidated long Dollar positions.

The Australian Dollar regained some stability on Friday after a week of volatile trading and heavy falls in the wake of the meltdown in international credit and stock markets.

At 5pm Sydney time, the Australian Dollar had edged up to US85.88c, up from Thursday's close of US85.36c, after trading in a relatively narrow band throughout the day.

The Indonesian Rupiah was trading at 9,270/9,275 to the US Dollar compared to 9,285/9,295 late Thursday.

And rounding out currencies here in China, The RMB finished at 7.5680 to the Dollar on the over-the-counter (OTC) market, up from 7.5718 Thursday.

On the exchange-traded market, the RMB ended at 7.5650, also up from Thursday's close of 7.5709,

China - Despite measures by the Chinese government to temper the market, the China real estate market continues to be a significant investment opportunity for both domestic and foreign investors. However, amid the vast business and investment opportunities, the special characteristics governing the accounting and taxation of China's real estate market pose a number of challenges to investors, according to business and tax advisors, Deloitte.

Speaking at a press conference to launch Deloitte China's Real Estate Investment Handbook last month, Deloitte China's Southern China Regional Managing Partner, Mr Kester Yuen said: "Driven by the continuous growth of the Chinese economy, rapid pace of urbanization, the upcoming 2008 Olympic Games and 2010 Shanghai World Exposition, the China real estate market is proving to be a significant investment opportunity for both domestic and foreign investors. In fact, the biggest and quickest price growth in China is currently being seen in the Southern region, where prices in Shenzhen jumped 14.2% in May following a 12.8% increase in April. Beijing and Shanghai on the other hand recorded increases of 9.6% and 0.6% respectively in May."

Deloitte noted that domestic demand has been spurred by rising incomes and the influx of an estimated eight million people to the cities. Although domestic and Asia-based investors traditionally have been the dominant investors in China real estate, US, European and, most recently Middle Eastern, investors are emerging as active buyers.

Mr Yuen said: "The Handbook has been prepared as a resource for investors, investment advisors, fund managers and others participating in the real estate industry to provide guidance to assist the planning or maintaining of real estate investments."

Deloitte China's Real Estate Industry Practice Leader, Mr Richard Ho cautioned: "There are many issues which investors in the China real estate market must consider and plan for, especially in the areas of accounting and taxation, which can make a significant difference in the net return on their China real estate investment. That is why we have subtitled our Handbook The details that make a difference."

The Handbook highlights the main issues faced by institutional investors, namely transparency, the legal system, the transaction process, valuation criteria, repatriation of capital and profits, and limited liquidity.

Mr Ho said: "Most existing and prospective investors know or at least have an idea that the regulatory framework of China's real estate market, while developing rapidly, is still very young compared to other developed markets such as North America or Western Europe. However, understandably, there are many compelling reasons to invest in China’s real estate market and thus the challenge is to understand, anticipate and be able to navigate through the complexities. These really can be the "make or break" for foreign investors in China real estate. "

Challenges faced by foreign institutional investors include the latest tightening measures and recent developments in the new Partnership Law, the new China Generally Accepted Accounting Principles (GAAP), and tax reform.

Ms Nancy Marsh, Deloitte China's Real Estate Tax Leader, said: "Taxation certainly ranks as one of the major challenges facing institutional investors. There are various taxes of which China’s real estate investors must be aware, such as Business Tax, Deed Tax, Urban Real Estate Tax, Urban and Township Land Use Tax, Stamp Duty and Enterprise Income Tax. However, the biggest challenge is presented by the Land Value Appreciation Tax (LAT) which is imposed on the taxable gain derived by companies and individuals from the transfer of real properties in China. The LAT is the most controversial tax in the real estate industry, not only because of its high rate, but also due to inconsistencies in local enforcement and calculation methodology. However, the challenges for real estate investors are counterbalanced by other measures. Currently the applicable income tax rate is 33% for most real estate companies, but this is expected to be reduced to 25% from January 1, 2008 including possible changes in withholding tax rates."

Mr Anthony Tam, Deloitte's Southern China Deputy Managing Partner for Tax, said: "With the growing trend for mergers and acquisitions in China, it is also important for foreign investors to recognize that Chinese financial statements usually do not provide as much information as they might be used to receiving. There may not be enough detail to measure business performance or to form a basis for valuation and price determination in an acquisition. Therefore it is important that buyers perform their own financial and tax due diligence review before acquiring a Chinese target."

In conclusion, Deloitte advises that careful accounting and tax planning is critical in avoiding the unexpected traps that could wipe out an otherwise high return. Tax planning must also continue throughout the lifecycle of a real estate investment project as circumstances and tax rules have a habit of changing over time.