US Markets - Wall Street achieved back-to-back weekly gains on Friday. Investors are hoping that another Federal Reserve rate cut, and a White House plan to resolve some of the pain afflicting holders of subprime mortgages, can prevent the credit squeeze from freezing the broad economy.

The S&P 500 index closed down 0.2% at 1,504.66, but was higher by 1.6% this week. For the year, the S&P is up 6.1%, about 4% below its 2007 peak of 1,565.15, set in October.

The Nasdaq Composite fell 0.1% to 2,706.16 on Friday, a rise of 1.7% this week. The Dow Jones Industrial Average rose a fraction higher to 13,625.58, up 1.9% since Monday.

The worst fears of investors about the economy were not met on Friday, when the November employment report recorded a gain of 94,000 jobs. The report was not strong enough to change expectations that policymakers will ease the Fed funds rate to 4.25% from 4.50% next week.

Analysts are worried about how the economy and earnings will fare in the coming months as banks scale back their lending and house prices are seen falling further.

The US administration?s plan to help some holders of subprime mortgage modify their loans was described as being no ?silver bullet? by Hank Paulson, the Treasury secretary.

That came after data showed the share of mortgages more than 30-days delinquent reached 5.6% in the third quarter, the highest level since 1986.

Financials rebounded 0.5% this week, but remain 15.6% lower for the year. The outlook for the sector?s earnings in the fourth quarter darkened and these are now seen falling 35% after a 27% slide in the third quarter, according to Thomson Financial.

With materials companies facing a decline of 6% in their fourth-quarter earnings, overall average S&P 500 earnings are now seen falling 0.8%.

This bleak outlook for the current quarter follows a fall of 4.5% in S&P earnings for the third quarter. The last time S&P earnings fell in two consecutive quarters was in the last quarter of 2001 and the first three months of 2002.

This year, as financials and consumer discretionary stocks and other areas of the market ? such as small companies ? have been hit hard by the credit squeeze, investors have sought large companies with exposure to the global economy.

The falling Dollar has inflated foreign based earnings, but this week central banks in Canada and the UK cut interest rates, weakening their currencies.

Among stocks in the news this week, Lennar, the home builder, rose 15.7% to $18.32 after it announced a joint venture with Morgan Stanley?s real estate unit.

A sense that homebuilders are getting on top of their inventory problems powered a 16.6% rally in S&P homebuilder index this week. Since making a low of 291.55 in late November, the index has risen more than 30%, clipping its loss this year to 57%.

Mixed retail sales for November were reflected in the share prices of retailers. JC Penney gained 8.6% to $47.92, while Target lost 7.4% to $55.51.

Financials did experience a number of downgrades this week, and on Friday American Express fell 4.3% to $56.96 after Merrill Lynch cut it to a ?sell?. Bond insurers were hit after Moody?s said MBIA might need additional capital and the stock fell 17.8% to $30.

American International Group rallied 5.7% to $61.45 as the insurer soothed investors after announcing its exposure to subprime losses.

Research In Motion, the maker of BlackBerry devices, fell 8.9% to $103.65 after a brokerage downgrade.

Activision, the video game publisher rose 20.9% at $26.79, after Vivendi said it planned to buy a controlling stake in the company.

Comcast said 2007 revenue would be lower and expenses higher than previously forecast. The cable operator fell 11% to $18.28.

Intel rose 6.3% to $27.73, and is up 37% in 2007, after the chip maker was upgraded to overweight by Thomas Weisel Partners.

Macrovision, a developer of technology that prevents unauthorised copying and viewing of video, said it would buy Gemstar, the television listings provider, for $2.8bn in cash and stock on Friday. Shares in Macrovision were 21.4% lower at $20.44, while Gemstar had dropped 16.6% to $4.99.

At the start of trading, Wall Street was set for gains after a modest rise in the number of jobs created in November left the door open to a rate cut by the Federal Reserve next week.

European Markets - Europe's leading exchanges closed higher today, boosted by M&A chatter in the insurance and mining sectors, with investors holding on to hopes for a 25 basis point rate cut by the Fed next week.

The STOXX 50 ended 30.87 points or 0.82% higher at 3,786.01, adding some 0.88% on the week. The STOXX 600 closed 3.01 points or 0.81% higher at 372.88, ending the week with gains of around 0.70%.

Let's get closer to the numbers then and start in Paris where French shares closed higher, spurred by the prospect of a US Federal Reserve rate cut next week, as the market rebound continued for a third consecutive day and US stocks gained in early trade following the release of payroll data.

The CAC-40 index finished 44.99 points or 0.79% higher at 5,718.75.

Among CAC-40 stocks, 34 closed higher and 6 closed lower. On the Matif, December CAC-40 futures were trading at 5,747.50.

On the broader indices, the SBF-80 index closed 68.06 or 1.06% higher at 6,512.37 and the SBF-120 ended up 34.02 or 0.83% at 4,140.19.

Air France-KLM was the CAC-40's biggest gainer, ending the session 0.92 or 3.86% higher at 24.73 on continuing confidence that the group will be able to negotiate attractive financial terms for its proposed purchase of an Alitalia stake.

Alcatel-Lucent also fared well, gaining 0.20 or 3.77% to close at 5.50 as investors took advantage of the share's cheapness amid the renewed sense of optimism. The shares are extremely low at the moment. The market is now starting to turn more positive, with the restructuring plan, potential synergies between Alcatel and Lucent, and the fact the group should see some organic growth in the fourth quarter.

Accor also ended higher, gaining 0.82 or 1.42% to close at 58.76 after rising sharply in morning trade after the release of strong revenue per room statistics for the French hotel industry which point to a good year for the hotel group, despite concerns about its US exposure.

Peugeot ended the session 1.90 or 3.67% higher at 53.72, while its fellow auto stocks posted more modest gains. Michelin was up 1.06 or 1.36% at the close, while Renault gained 1.24 or 1.27% to 99.01.

AXA benefitted from positive broker notes to close 0.63 or 2.26% higher at 28.55. 'We think Axa's share price is far from its fundamental value, and in the coming three months, the news flow should be driven by the outlook for excellent H2 2007 earnings and a possible positive surprise for dividend,' Societe Generale analysts said.

EADS ended the session 0.05 or 0.23% higher at 21.70. Investors are awaiting updates on the group's plan to sell seven of its sites as part of its restructuring plan for aircraft manufacturing unit Airbus. An Airbus works council meeting is due to take place on Monday, but an Airbus spokeswoman was unable to comment on whether the plant sales will be on the agenda.

Off the CAC-40, fellow aviation stock Dassault Aviation closed down 15.00 or 2.34% at 625.00. The group reversed some of the gains it made yesterday on the back of hopes that it may win its first ever export deal to sell Rafale aircraft to Libya next week, after one of the aircraft crashed in central France, killing the pilot.

Fallers on the CAC-40 included Carrefour, ending 0.32 or 0.60% lower, Vivendi, losing 0.18 or 0.56% to close at 31.94, Pernod Ricard down 0.28 or 0.18% at 151.95 and EDF 0.13 or 0.16% lower at 82.17. Defensive stocks were paring gains after outperforming in the recent market turmoil, market sources said.

Sanofi-Aventis closed 0.68 or 1.05% higher at 65.70. Early on in the session trading on the group's shares was halted after a technical problem with Euronext.

Into Frankfurt now and Germany where shares closed higher particularly on the US news.

Gains on the German market were dampened after Goldman Sachs downgraded its rating on the DAX to 'underweight' in a country portfolio review.

The DAX closed up 53.49 points or 0.67% at 7,994.07 after trading between 7,957.55 and 8,009.76.

The MDAX added 133.29 points or 1.36% to 9,956.97, while the TecDAX was up 6.28 points or 0.64% at 984.59.

DAX futures were down 18.00 points or 0.22% at 8,100.00, while bund futures were down 0.98 or 0.85% at 114.05.

On the DAX, shares in Munich Re were the biggest gainers, adding 6.46 Eur or 5.16% at 131.60 after the Financial Times reported Swedish private equity firm Cevian Capital has bought a 3% stake in the world's second-largest reinsurer.

Peer Allianz also gained on the news, adding 3.77 Eur or 2.69% at 143.75, because of higher sector valuations and speculation that other major investors might be considering over buying large stakes in German insurers.

Continental AG increased 2.62 Eur or 2.93% at 91.92 as the stock stands to benefit the most from new a re-weighting of the DAX, expected to be instituted by Deutsche Boerse AG at the end of December.

Hypo Real Estate was 0.66 Eur or 1.76% higher at 38.15, adding to yesterday's gains on positive sentiment in financial stocks after Royal Bank of Scotland PLC revised its 2007 figures.

Of shares on the fall today, Deutsche Boerse dropped 5.69 Eur or 4.26% at 127.85 on a reported downgrade to 'neutral' from 'outperform' at Credit Suisse.

Metro decreased 0.64 Eur or 1.04% at 61.16, while Henkel slipped 0.36 Eur or 0.91% at 39.10.

ThysseNKrupp lost 0.18 Eur or 0.47% at 38.07.

Today, a second person died after a fire at the company's steel mill in Turin, northern Italy.

On the MDAX, Vossloh gained 7.14 Eur or 9.54% at 81.98 as the best performer, after Deutsche Bank upgraded its stance to 'buy' from 'hold'.

Gagfah added 0.53 Eur or 4.60% at 12.05 as traders pointed to an upgrade to 'neutral' from 'underweight' at JP Morgan.

At the other end of the index, Wacker Chemie lost 5.88 Eur or 3.18% at 179.03 as the worst performer.

TecDAX-listed Morphosys was the best performer on the index, rising 4.57 Eur or 9.89% at 50.77.

Aixtron lost 0.27 Eur or 2.89% at 9.07, being at the bottom of the index.

In Brussels, the Belgian market also closed higher, with Agfa-Gevaert strongly higher following positive comments made by the imaging technology group's chief executive.

At the close, the Bel 20 was up 16.27 points or 0.39% at 4,170.04.

Agfa-Gevaert closed up 0.67 Eur or 8.42% at 8.63 Eur after Jo Cornu, the newly-appointed chief executive, said the company's planned demerger is 'still on track for mid-2008'.

Cornu said the demerger is up for discussion at next Wednesday's board meeting.

Financial services group Fortis was up 0.35 Eur or 1.87% at 19.06 Eur. Peer KBC Group was up 0.90 Eur or 0.95% at 95.58 Eur and Dexia was down 0.05 Eur or 0.28% at 17.73 Eur.

Mobistar was up 0.93 Eur or 1.55% at 60.96 Eur after the mobile telecoms group named Benoit Scheen as new chief executive from Jan 1.

Suez was up 0.12 Eur or 0.26% at 46.61 Eur. The utility said its energy unit has secured a contract to construct a 660 megawatt coal-fired power plant in Thailand for a total investment of 770  million Eur.

Supermarket group Delhaize was up 0.06 Eur or 0.10% at 61.41 Eur.

For the fallers, Colruyt was down 4.67 Eur or 2.84% at 159.78 Eur after Bank Degoof and ABN Amro downgraded their ratings and upped their target prices on the discount supermarket group.

Pharmaceutical group UCB was down 0.28 Eur or 0.87% at 31.74 Eur.

InBev slipped 0.29 Eur or 0.49% to 58.62 Eur. Netherlands-based Nimbus Investments has bought United Dutch Breweries from the brewer. No financial details were disclosed.

Into The Netherlands now where Shares in Amsterdam closed higher, tracking a higher Wall Street amid a dearth of guiding corporate news, resulting in low trading volumes.

The AEX closed 3.16 points or 0.62% higher at 513.59, after trading in a range of 512.25-516.39.

Staffing stocks benefited from better-than-expected news about US non-farm payrolls.

Randstad led gainers, adding 2.53% to 28.81 Eur, while Vedior put on 1% to 18.16 Eur and USG People added 2.17% to 19.31 Eur.

Akzo Nobel added 1.83% to 54.60 Eur.

Financials gained, with Fortis putting on 1.82% to 19.05 Eur, Aegon adding 1.55% to 12.41 and ING gaining 0.93% to 27.07 Eur.

ArcelorMittal added 1.66% to 50.15 Eur after it made a buy-out offer on China Oriental and also announced a 600-700  million Eur investment in Kazakhstan.

Unibail-Rodamco gained 1.37% to 158.15 Eur as JP Morgan said it expects the property group to do relatively well in 2008.

TNT rose 0.93% to 29.25 Eur after Petercam upped the mail group's target price to 36 Eur, from 33.65.

On the other side of the spectrum, DSM shed 0.44% to 34.21 Eur, Heineken lost 0.73 pc tot 44.78 Eur, Ahold dropped 0.80% to 9.92, TomTom lost 1.18% to 60.35 after a downgrade at Dresdner Kleinwort and SBM Offshore lost 1.54% to 23.63 Eur.

Property stocks were in demand among midcap shares.

Wereldhave added 4.24% to 79 Eur, Oce put on 3.44% to 12.32 Eur and Corio rose 3.23% to 61.28 Eur.

Heijmans added 2.13% to 26.38 Eur after the sale of a small unit in Belgium, which led one analyst to speculate that perhaps Heijmans will divest more non-core operations.

Fugro lost 0.75% to 53.99 Eur, ASMI shed 0.90% to 15.46 and Binckbank shed 2.82% to 9.98 Eur.

Into Vienna now where Austrian Shares closed higher after strong gains by Wienerberger, Oesterreichische Post and Austrian Airlines helped to offset falls from index heavyweights Raiffeisen International and OMV.

The ATX closed up 0.81% or 36.37 points at 4,515.39. The ATX Prime closed 1.08%, or 22.96 points, higher at 2,142.95.

Wienerberger shares rose steadily in afternoon trading to close up 5.91% at 39.04 Eur. In the absence of news, observers put Wienerberger's gains down to a rebound on valuation grounds.

Shares in Oesterreichische Post climbed 4.06% to 24.62 Eur. The postal services group will close 7 of its 21 parcels distribution bases as part of a cost-cutting plan being put forward to its supervisory board next Wednesday, according to unconfirmed media reports. Trading in the company's shares was also boosted by its announcement a long-term parcels clients has extended its contract by an undisclosed number of years.

Austrian Airlines was part of the broad upswing in European airline stocks, finishing 2.09% higher at 5.38 Eur.

Intercell shares gained 2.01% to 27.86 Eur, still buoyed by news that the vaccines specialist has submitted a marketing authorization application for its vaccine against Japanese Encephalitis (JE) with regulatory authorities in Europe.

Renewed investor confidence in industrial stocks supported trading in voestalpine, up 1.88% at 47.59 Eur, and Andritz, which ended 1.65% higher at 42.39 Eur.

The market's generally more positive sentiment towards European financial stocks extended to Erste Bank, up 1.76% to 51.39 Eur, but failed to lift Raiffeisen shares, which inched down 0.09% at 107.30 Eur.

Shares in A-TEC Industries closed flat at 93.50 Eur. A-TEC's CEO said financing for its planned acquisition of Serbia's RTB Bor is arranged and no partners are being sought for the purchase.

Separately, Germany's cartel office extended until Jan 20 the deadline for its decision on whether A-TEC can raise its stake in Germany's Norddeutsche Affinerie above the 13.75% it currently holds.

OMV shares, down 0.89% to 50.14 Eur, followed the broader trend among oil stocks on the back of declining crude prices. The company today announced a 0.02 Eur drop in the recommended price of petrol and diesel at its domestic forecourts.

Telekom Austria shares slipped 1% to 19.80 Eur, as investors remained unmoved by news of a target price hike to 25 Eur at ING.

The broker also confirmed its 'buy' recommendation, citing the positive earnings impact of the Telekom Austria's recent acquisitions and the stock's 'attractive' valuation.

Zumtobel closed trading down 1.81% at 26.02 Eur. Although the lighting solutions specialist's half-year results narrowly beat analysts' consensus forecast, concerns about the general outlook for the construction materials sector weighed on the shares.

Neighbours Switzerland saw Zurich Shares close high in line with other regional markets - and for much the same reason.

At the close, the Swiss Market Index was 57.91 points higher at 8,799.65, while the Swiss Performance Index was also up 47.82 points at 7,150.22.

The Euro gained against the Swiss Franc to 1.6560 SFr, while the Dollar weakened to 1.1300 SFr.

Major banks moved up, with Credit Suisse gaining 1.30 SFr or 1.9% at 69.80 and UBS up 1.10 SFr or 2.0% at 57.20. But Julius Baer was slightly down, losing 0.10 SFr to 98.20.

Insurers all closed higher. Baloise gained 1.30 SFr or 1.1% to 117.10, Zurich Financial advanced 3.50 SFr or 1.0% to 338.75 and Swiss Life moved up 3.00 SFr or 1.0% at 309.50.

Adecco climbed 1.30 SFr or 2.1% to 62.70, closing at the top of the index.

Meanwhile, pharmaceutical heavyweights closed mixed.

Novartis gained 0.60 SFr to 64.80 after it said it received a record 15 new drug approvals in Europe and the US this year.

But Roche closed lower, down 0.80 SFr to 203.70, still under pressure after a FDA panel yesterday said it is not recommending cancer drug Avastin be approved for use by breast-cancer patients.

Fellow heavyweight Nestle also fell, down 2.50 SFr to 538.00, ending the week at the bottom of the SMI.

Swatch was also down 0.25 SFr to 340.75, having earlier said it will start its share buyback programme on Dec 10 2008.

Outside the SMI, Jelmoli fell 54 SFr or 2.0% to 2,703 after its shareholders rejected a proposed share buyback programme.

Into Scandinavia now and starting with Denmark where Copenhagen Shares closed higher, tracking gains across Europe on positive sentiment ahead of an expected US rate cut next week, with Novozymes AS leading the market, while Genmab AS fell.

The OMXC20 index closed up 3.14 points at 477.17 and the OMXCB Benchmark index gained 4.49 points to 459.36.

Novozymes finished 17.00 DKr higher at 572.00, and Vestas Wind Systems AS ended up 6.00 DKr at 514.00, off their day highs after US Senate Republicans blocked the quick passage of an energy bill passed yesterday by the House of Representatives. The bill is expected to give alternative energy providers a boost because it imposes new taxes on oil and gas companies as well as providing a renewable power mandate for utilities.

Genmab fell 7.50 DKr to 341.00, following a sharp upturn earlier in the week on unconfirmed takeover rumours.

According to RB Boersen, ING cut its rating for the pharmaceutical company to 'sell' from 'hold', saying a takeover would be unlikely.

Coloplast AS was up 5.50 DKr at 485.00 after Cheuvreux raised its target price for the health care group to 530 DKr from 440, RB Boersen said.

Elsewhere in the market, Bang & Olufsen closed up 16 DKr at 516.00, Carlsberg B up 8.00 at 654.00, and Danske Bank up 4.75 at 209.75.

Neighbours Sweden saw Stockholm Shares follow suit.

The OMX Stockholm index closed up 1.30% at 364.22, while the OMX Stockholm 30 index closed 1.31% higher at 1,119.70. Turnover was 17.330  billion SKr.

Electrolux which is one of the most beaten back stocks on the market this year and has good exposure to the US market, saw its B share jump 5.77% to close at 114.50.

Electrolux's spun off gardening equipment supplier, Husqvarna B also closed up 5.30% at 74.50.

Engineering stocks also enjoyed a broad rally helped by increased optimism over the US economic outlook. Sandvik closed up 1.73% at 117.50, SKF B up 2.88% at 116.00, and Atlas Copco A up 2.30% at 100.25.

In the telecoms sector, Ericsson B gained 1.27% to close at 15.90.

The truckers had a strong session with Volvo B gaining 3.55% to close at 116.75, and Scania B up 2.77% at 167.00.

Skanska B closed up 0.81% at 124.75. The construction group said its chief executive Stuart Graham will step down in 2008, but will remain in his position until a successor is in place.

Elsewhere in the market, Hennes & Mauritz B closed up 0.39% at 388.50, TeliaSonera up 1.25% at 60.75, Nordea up 1.03% at 107.70, Swedbank A up 0.25% at 199.00, and Boliden up 3.46% at 89.75.

Helsinki Shares in Finland also extended gains to finish sharply higher after US jobs data boosted Wall Street, with engineer Metso, stainless steel producer Outokumpu and tyremaker Nokian Tyres all jumping more than 6%.

The OMX Helsinki 25 index of top stocks rose 1.79% to 3,127.17 and the broader OMX Helsinki index 0.72% to 11,848.70. Volume was in line with recent averages at 1.4  billion Eur.

Metso surged 7.53% to 38.55 Eur, though is still well below the 50 Eur the stock was worth in October. Metso has won an order for two tissue manufacturing machines from China's Fook Woo Group, saying such machines normally fetch 4-8  million Eur each.

Nokian Tyes also notched up a 7.53% gain to finish at 27.43 Eur, while Outokumpu was the best performer in materials with a 6.56% gain to 22.59 Eur.

Papermaker UPM-Kymmene added 4.27% to 14.90 Eur, while peer M-real closed unchanged at 3.54 Eur. The European Commission said it has opened an in-depth inquiry into Arjowiggins' proposed acquisition of M-real's Zanders Reflex speciality paper mill in Dueren, Germany.

Bancassurer OKO led financial stocks with a 4.97% rise to 14.57 Eur. A fall for Nokia, however, capped index gains. The stock dipped 0.41% to 26.73 Eur after its ADRs slipped in Wall Street trade Thursday.

But bucking the trend not just in Scandinavia but for Europe, was Oslo where Norwegian Share prices closed significantly lower, led down by oil and gas major StatoilHydro following a major disappointment to investors about its oil production targets.

The OSEBX Benchmark index fell 1.6% to 486.8, while the OSEAX All Share index fell 2.5% to 561.2.

Total turnover was 26.4  billion NKr.

Statoil's statement, which came early in the session, dominated the market sentiment, undermining it at a time when other European markets were on the march upwards.

The Oslo energy index fell 5.8%, or 38 points, to 622.08 after StatoilHydro delivered its thunderbolt at the start of trade, the group shocking analysts by warning it will miss its 2007 production forecasts and following 2008 guidance that missed expectations.

Investors bailed out of the stock in droves, taking down the share price 10.9% to 164.80 NKr in heavy volume.

StatoilHydro is the mammoth in the Olso Bors -- and with 10  billion usd wiped off its market capitalisation, the remainder of the market was pulled inexorably into the red.

Oil service sector stocks wilted. Seimsic investors TGS-NOPEC Geophysical and Wavefield Inseis were down 4% to 69.10 NKr and 3.8% to 40.90 NKr respectively.

Earlier, TGS Nopec said it has formally initiated dispute resolution procedures in relation to its planned merger with Wavefield Inseis, which has stalled following significantly weaker third quarter results from TGS.

According to TGS, the two parties now have 30 days to reach an amicable solution, before arbitration proceedings in Oslo begin.

Prosafe was off 4.45% to 94.50 NKr -- even though it was awarded a one year extension to the agreement with Total for the provision of its 'Safe Caledonia' rig, in a deal worth 55  million usd. Awilco Offshore eased 0.5% to 57.70 NKr.

With such a gloomy general backdrop, Golden Ocean fell 2.7% to 32.10 NKr. Investors were not cheered when the group announced it is to issue 200  million usd in five-year convertible bonds in order to partially fund its ongoing new-build programme.

The bulk shipping firm said the unsecured bonds will be convertible into common shares, and are expected to have an annual coupon in the range of 3.125-3.625%.

Bank DnB NOR put on a handy 3% to 86.50 NKr, after it said it will make a gain of 1.4  billion NKr before tax after raising a total of 3.6  billion NKr through the sale of 22 buildings since the spring.

The latest sales conclude the Norwegian banking group's planned commercial property sales, it said.

Norske Skog was one of the biggest gainers, putting on just under 15% to 41.50 NKr.

But analysts said there was nothing stock-specific driving the jump with a share which is now notoriously volatile and can swing 10% either way from day to day.

Norske Skog this week told the market that it intends to decide soon whether to close down a significant amount of its European production - in a bid to eliminate some of the massive overcapacity in the industry which is hurting prices.

Down to warmer climes now and starting in Greece where Athens Shares ended slightly higher, off earlier highs, weighed down by Hellenic Telecomms (OTE) and Marfin Investment Group (MIG) on news of a law limiting ownership in strategic groups to 20%.

The ASE general index closed 0.2% to 5,133.3, and blue chips finished flat at 2,719.5.

Mid caps ended 0.5% higher at 6,289.6, and small caps closed up 0.6% at 1,029.7.

Advancers outnumbered decliners, 132 to 104, with 91 unchanged in heavy volume of about 590  million Eur.

OTE dropped 4.8% to finish at 23.52 Eur on news that the Finance Minister has submitted a directive capping private investors from acquiring more than 20% strategic companies with approval from an inter-ministerial committee.

Investment holding company MIG also reversed early gains and finished down 3.7% to 5.22 Eur on the same news of regulatory intervention.

In other news at MIG, it has raised its stake in OTE to 18.45% from 17%.

Mytilineos jumped 3.9% to 35.7 Eur after broker HSBC Pantelakis Securities raised its target price to 46 Eur from 42.7 Eur on the engineering and metals company's well diversified business portfolio, high base metals prices, and solid prospects for next year.

National Bank of Greece closed up 2.3% to 46.7 Eur after broker HSBC Pantelakis Securities hiked its target price to 58 Eur from 48 Eur saying that the bank remains its top local bank pick for 2008 as well.

Greek Postal Savings Bank closed up 2.3% to 13.26 Eur and refiner Motor Oil rose 2.4% to end at 16.2 Eur, both having recently underperformed the index's gains.

In Italy the Milan bourse closed high, with Fiat among leading gainers, recouping Thursday's falls on positive broker recommendations.

The Mibtel index rose 0.50% to 30,090 points, and the S&P/Mib was up 0.56% to 39,388.

Turnover was an estimated 4.181  billion Eur. Volumes were depressed by a public holiday in Milan and closure of banks.

Impregilo was up 2.60% to 4.81 Eur. Italcementi, which sells cement in the US, was up 1.37% to 14.54. Buzzi Unicem was up 0.47% to 19.09.

Fiat was up 2.60% to 4.81, rebounding after recent worries on 2008 auto sector outlook, continued speculation of a sale of a stake by Unicredit, and market rumours CEO Sergio Marchionne will leave.

Fiat declined to comment on the possibility Marchionne would leave. He is widely credited with turning Fiat around and there is speculation another auto company could try and hire him. Analysts said they don't see Marchionne leaving.

After the market closed, Unicredit said it will its 5% stake outside the stock market by year's end.

JP Morgan reiterated its 'outperform' and 30 Eur price target for Fiat, citing expected strong performance at the Iveco truck unit.

Finmeccanica rose 0.66% to 19.87.

Autogrill rose 2.13% to 12.17 and Luxottica was up 1.92% to 22.25. There is some speculation the Dollar may not weaken further, brokers said.

Banks were mostly firmer. Unicredit was up 1.52% to 5.95. One broker said this bank is getting over problems linked to sub-prime. Banco Popolare was up 1.12% to 15.15 on reports it will sell its Efibanca unit.

Utilities were out of favour. Terna lost 0.38% to 2.7175, AEM fell 0.19% to 2.9225, and Enel was off 0.12% to 8.35.

Eni was unchanged at 25.06. Kazakh comments on Eni remaining operator of the Kashagan field were a positive factor, brokers said.

Media stocks were mixed. Mediaset was up 1.91% to 6.68. Mondadori lost 0.37% to 5.615. Italy's antitrust authority said Mondadori is one company being probed over school book sales.

Alitalia lost 0.22% to 0.8665, giving up a small part of yesterday's gains after attracting bids in its privatisation.

Recently listed motor yacht maker Aicon fell 26.28% to 2.25 after saying its auditor PricewaterhouseCoopers had filed a report with market regulator Consob on related party transactions.

Aicon said it will fully cooperate with PWC and Consob, adding its majority shareholder intends to buy company shares.

Penultimately in Europe we go to Spain where Madrid's market closed higher in modest trading, underpinned by hopes for a US interest rate cut next week, with main banks Santander and BBVA outperforming, while broadcasters and property issues were also in demand.

The IBEX-35 index ended up 123.70 points at 15,819.60, after trading in a range of 15,759-15,855.

Main banks were firm, with Santander up 0.19 Eur at 14.88, while BBVA gained 0.28 to 17.23 on speculation that Ram Bhavnani could be eyeing the bank after he told Cinco Dias he is prepared to invest up to 800  million Eur to take 5% in a 'big' Spanish bank.

Popular, also tipped as a possible target for Bhavnani, put on 0.14 to 12.26.

Bucking the firmer trend in banks, Bankinter fell 0.34 or 2.4% to 13.80 on profit taking after recent strong gains fuelled by the fight for control between core shareholders Credit Agricole and Jaime Botin.

Broadcasters were higher, with Antena 3 climbing 0.70 or 6.24% to 11.91, Telecinco was up 0.76 or 4.17% at 18.98 and Sogecable added 0.41 to 22.51.

Antena 3 is widely tipped to be excluded from the exclusive index at the revisory meeting Dec 11 in favour of Grifols, which ended down 0.18 at 15.95.

Property issues were in demand, with Astroc up 1.01 or 15.28% at 7.62 and Fadesa rising 0.78 or 3.23% to 24.94, encouraged by news of a plan in the US to give relief to sub-prime borrowers.

Acerinox put on 0.42 or 2.33% to 18.47, amid expectations for an improved outlook for the European steel sector.

Meanwhile, selected utilities were on offer after recent strong interest, with REE down 0.51 at 43.54, Endesa 0.37 lower at 38.10 and Fenosa shedding 0.87 to 47.76. tf.

And bringing Europe to a close this week is Portugal, where in Lisbon Shares closed slightly higher in thin trade, underperforming strong European markets, boosted by gains in blue chip Portugal Telecom and cement maker Cimpor, while heavyweights EDP and BCP weighed on the index.

The PSI 20 index closed up 17.94 points at 13,116.35 after trading in a range of 13,101-13,170 on a volume of around 280  million Eur.

Equities opened higher but came off highs in early deals, only to extend gains midmorning on light volumes.

In the afternoon shares slipped, but stayed just in positive ground before recovering to trade a tight range just higher for the rest of the session.

Cement maker Cimpor climbed 0.14 Eur or 2.14% to 6.23, outperforming after UBS' decision to include the stock in its Top 20 European small and midcaps list. UBS rates Cimpor 'buy' with an 8.2 Eur per share price target.

Other construction-related stocks were mixed with Mota Engil slipping 0.05 to 5.44, while small cap Soares da Costa added 0.03 to 2.15.

Motorway concessionaire Brisa declined 0.10 to 10.00, after JP Morgan started coverage on the stock with an 'underweight' stance and a 10.60 Eur per share target price, noting it is sceptical about the company's planned international expansion.

PT Multimedia was up 0.04 at 9.22, and PT closed 0.08 higher at 9.33, with dealers citing support from the company's share buyback program.

Galp added 0.08 to 14.85. Earlier the company declined to confirm reports that it plans to meet Libyan leader Moammar Khadafi today to discuss enlarging the oil and gas group's operations in the country.

Blue chip EDP fell 0.04 to 4.59, weighing on the index after Spanish newspaper Expansion reported that the IPO of Iberdrola Renovables has been fully subscribed in the international institutions tranche, albeit at the lower half of the indicative price range of 5.3-7.0 Eur per share.

Also in the energy sector, REN climbed 0.06 or 1.63% to 3.74, adding to yesterday's sharp gains.

BES was up 0.15 at 16.05, continuing to outperform its banking peers, with dealers citing the bank's good fundamentals.

UK Market - Shares in Xstrata surged to a record high of £38.46 on Friday as speculation that the mining group would receive a bid approach intensified.

The FT?s Alphaville website reported that Brazil?s CVRD, the world?s second largest miner, had hired Lehman Brothers to study a bid for the Anglo-Swiss group.

A counter-rumour was that UK-listed AngloAmerican, 5.1% higher at £34.00, was also working on a takeover.

Mick Davis, Xstrata chief executive, said this week that the proposed takeover of Rio Tinto by BHP Billiton had created ?momentum for consolidation? in the mining industry, and the market is increasingly of the view that acquisitive Xstrata has made the willing shift from predator to prey. ?A bid from CVRD is possible, although in many ways AngloAmerican is a better fit,? said Simon Toyne, analyst at Numis Securities.

While comments attributed to Roger Agnelli, CVRD chief executive, damped expectations that a move was imminent, the Brazilians are still expected to play a leading part in any industry consolidation.

Xstrata closed up 7.9% at £36.56, making it the biggest FTSE 100 riser. Rio Tinto added 2.9% to £57.46, BHP Billiton gained 3.5% to £16.76 and Antofagasta rose 5.2% to 793½p.

The FTSE 100 ended the week on the front foot amid expectations of a further easing of monetary policy next year. The main index rose 69.3 points, or 1.1%, to 6,554.9 while the FTSE 250 added 137.1 points, or 1.3%, to 10,632.9.

The divergence between the two indices continued as a 1.9% gain for the FTSE 100 over the week compared with a loss of 1.1% for the mid caps.

Goldman Sachs lifted its stance on the FTSE 100 from ?neutral? to ?overweight? and said the index ?looks cheap versus the rest of Europe?.

British Land rose 4.7% to 975p as JPMorgan said that while it was too early to call the bottom of the market, the real estate sector could look forward to a better 2008. On Thursday, Lehman Brothers, which predicted this year?s de-rating, also turned positive on property stocks.

Northern Rock rose 7.4% to 110.6p as news that JC Flowers had ended its interest in the stricken lender was softened by a firm proposal from Olivant.

James Hutson, at Keefe, Bruyette & Woods, said the Olivant proposal, which is backed by Northern Rock?s leading institutional shareholders, ?looks far more attractive than the Virgin bid? that has been named preferred bidder.

The housebuilders were boosted by hopes of further interest rate cuts and well-received interims from London and south-east specialist Berkeley Group.

Berkeley rose 9.5% to £13.70 as it pledged to return cash to shareholders and said the ?fundamentals of the [housing] market remain unchanged? in spite of mounting evidence of a slowdown. Taylor Wimpey rose 7.6% to 214½p, Persimmon gained 5.8% to 794p and Bovis Homes firmed 7.4% to 648p.

Dairy Crest added 8.7% to 587p as co-operation with the Office of Fair Trading earned it a reduced fine for fixing the price of milk between 2002 and 2003.

Carpetright fell 0.1% to £10.04, leaving it 20% below the offer price of £12.50 from founder Lord Harris.

Sources familiar with the matter said that a positive update, though not a firm offer, was expected along with the retailer?s interims on Tuesday.

Balfour Beatty rose 6.4% to 497p as house broker ABN Amro raised the construction group from ?add? to ?buy? and highlighted ?the attractive valuation and the relatively defensive nature of group earnings?.

Japan & Asia Pacific - Stock markets across Asia were mixed Friday with Tokyo & Sydney extending Thursday's gains after Wall Street rallied again, while Seoul and Hong Kong succumbed to profit-taking.

Japanese shares closed higher Friday following the gains on Wall Street on the US government's plan to aid troubled homeowners and hopes of another rate cut.

Exporters were supported by a softer yen, which mostly traded near a three-week low against the US Dollar.

But investors retreated to the sidelines in late trading, waiting for the release of the US November jobs report later today.

The blue chip Nikkei 225 Stock Average finished 82.29 points or 0.5% higher at 15,956.37. It rose as high as 16,107.65 points at one stage, going above the 16,000-point resistance line for the first time since Nov 7. It hit a low of 15,948.54. The Nikkei gained 1.8% over the week.

The broader Topix index closed up 9.49 points or 0.6% at 1,561.76. It gained 2.0% over the week.

Gainers outnumbered decliners 1,053 to 539, with 127 issues unchanged.

Volume traded rose to 2.18 billion shares from 1.9 billion Thursday.

Hong Kong shares gave up early gains to close lower on Friday, halting the benchmark index's seven-day advance as investors opted to lock in profits ahead of the weekend.

The Hang Seng index closed down 716.45 points or 2.4% at 28,842.47 after coming within striking distance of the 30,000-point mark. The index gained 0.7% over the week.

Turnover was 140.12 billion Hong Kong Dollars.

HSBC helped limit the market's overall losses, rising 3.10 Dollars or 2.3% to 136.70 Dollars on optimism about the US government's plan to help financially distressed homeowners.

The property index finished down 1,650.62 points or 4.3% at 37,217.52.

Sino Land was the worst hit in the property pack, down 2.65 Dollars or 9.5% at 25.35 Dollars. The stock gained over 17.6% last month as Sino Land, with its high exposure to the residential property market, is expected to be a major beneficiary of the likely rate cut, with lower rates and cheaper loans expected to encourage people to invest in more lucrative options like real estate.

Sun Hung Kai Properties, Hong Kong's biggest developer, lost 5.50 Dollars or 3.4% at 155.10 Dollars while Hong Kong billionaire Li Ka-shing's flagship property company, Cheung Kong (Holdings), was 6.30 Dollars or 4.3% lower at 141.40 Dollars.

Newly listed China Railway Group posted sharp gains. Asia's largest construction company was up 27% at 7.36 Hong Kong Dollars at the close, against the offer price of 5.78 Dollars.

China Railway hit a high of 7.50 Dollars in morning trade, nearly 30% more than the IPO price. That compares to the nearly 70% surge in the stock when it debuted in Shanghai on Monday.

Investors had been anxious about China Railway's debut in Hong Kong, fearing that a weak performance could dampen interest in IPOs in the near future.

China A-shares closed higher with metals stocks spurred by news that a joint venture between China Minmetals Nonferrous Metals Co and Jiangxi Copper will buy Northern Peru Copper Corp.

The broader market moved in a narrow range with many investors trading cautiously after a government announcement this week that China's monetary policy stance will shift from prudent to tight in 2008 to tame inflation and prevent economic overheating.

The benchmark Shanghai Composite Index closed up 56.68 points or 1.13% at 5,091.76, ending the week up 4.52%.

Turnover rose to 71.66  billion yuan from 64.47 in the previous session.

The market posted strong gains this week, bucking the downtrend which began mid-October. Many analysts had forecast drops because of pressure on liquidity arising from massive share supply released by IPOs.

China Shipping Container Lines Co Ltd, the biggest of five IPOs this week, said it raised 15.47  billion yuan. The IPO attracted 2.642 trln yuan worth of subscriptions.

The market has also been calm so far after the announcement this week that China plans to tighten monetary policy next year.

Jiangxi Copper Co Ltd surged 2.05 yuan or 4.36% to 49.03. Vancouver-based Northern Peru Copper said late yesterday it agreed to be purchased by a joint venture between China Minmetals Nonferrous and Jiangxi Copper.

The two buyers will acquire all of Northern Peru's outstanding shares for 13.75 cad per share in cash, with the total value of the deal at 455  million cad. The deal is expected to close in early 2008

Steelmakers resumed their rise after taking a short break yesterday, after analysts said their valuations were low compared with other sectors.

Xining Special Steel Co Ltd soared 1.78 yuan or by the 10% daily limit to 19.57, and Angang Steel Co Ltd gained 0.87 yuan to 29.32.

Baoshan Iron & Steel Co Ltd rose 0.22 yuan to 16.72. Parent Baosteel Group today confirmed that it was not planning a bid for Rio Tinto, but added it is closely watching BHP's takeover bid.

PetroChina, the country's largest oil producer, advanced 0.19 yuan to 31.31. The stock started to recover late in the week after dipping nearly 40% since listing.

Shanghai Zhenhua Port Machinery (Group) Co Ltd rose 0.73 yuan to 23.90, after it Won a 200  million usd container crane contract from Taipei Port Container Terminal Corp.

Property stocks were weak on reports that property prices have begun to fall amid sluggish trade in some cities such as Shenzhen.

Gemdale Corp fell 1.89 yuan to 47.09, and China Enterprise Stock Co Ltd lost 0.65 yuan to 22.10.

The Shanghai A-share Index rose 59.39 points or 1.12% to 5,342.92 and the Shenzhen A-share Index was up 22.01 points or 1.62% at 1,382.20.

The FTSE/Xinhua China A 50 Index was up 247.99 points at 20,287.28 and the FTSE/Xinhua China A 200 Index was up 194.24 points at 14,418.10.

China B-shares closed higher following a two-day Wall Street rally, dealers said.

Shanghai Zhenhua Port Machinery (Group) rose 3% to 2.854 usd after it Won a 200  million usd container crane contract from Taipei Port Container Terminal Corp.

The Shanghai B-share Index rose 5.19 points or 1.47% to 358.96 on turnover of 562.00  million usd and the Shenzhen B-share Index rose 11.06 points or 1.55% at 724.81 on turnover of 331.17  million hkd.

In Shanghai, Shanghai Haixin Group Co Ltd rose 0.075 usd or 8.30% to 0.979.

Shanghai Jinjiang International Hotels Development Co Ltd added 0.065 usd to 1.770.

In Shenzhen, China Vanke Co Ltd was up 0.64 hkd or 2.85% at 23.08.

China International Marine Containers (Group) Co Ltd advanced 0.39 hkd to 14.49.

The FTSE/Xinhua China B 35 Index was up 218.30 points at 12,064.82.

South Korean shares closed lower on Friday, reversing an earlier rise, as investors opted to take profit on recent gains after the Bank of Korea (BoK) kept its key rate unchanged, as widely expected.

The central bank said while it remains concerned about rising inflationary pressure, it decided to keep its call rate target unchanged at 5% for a fourth straight month due to persistent worry over the US economy.

But caution set in at midday as investors turned their attention to key events next week, particularly the Fed's rate decision on Tuesday and the expiry of options and futures contracts for index and individual stocks in Seoul on Thursday.

The KOSPI index closed down 18.85 points or 1% at 1,934.32, after trading between 1,969.56 and 1,934.32. The benchmark index rose 28.32 points for the week.

At a press briefing following the BoK's monetary policy meeting early Friday, central bank governor Lee Seong-Tae said the country's inflation indicator is expected to hover around the upper end of its target range in the first half of next year as raw material prices build up, rendering grounds for a rate hike.

Trading remained thin, with 355 million shares exchanged worth 6.1 trillion Won.

Decliners greatly outnumbered advancers 515 to 294.

Foreign investors were net buyers of shares worth 289.1 billion Won while institutions and retail investors were net sellers of 126.9 billion Won and 175.7 billion Won, respectively.

Samsung Electronics fell 4,000 Won or 0.7% to 608,000 Won on profit- taking, snapping a four-day rally sparked by a recovery in memory chip prices. But Hynix extended its gains, advancing 550 Won or 2% to 27,500 Won as foreign investors massively bought into the stock on its solid earnings outlook.

Banks surged after prolonged weakness, tracing their US peers following the government's rescue plan for the mortgage market. Kookmin jumped 2,100 Won or 3.3% to 66,000 Won, Shinhan climbed 3,000 Won or 6.2% to 51,300 Won, and Woori added 550 Won or 3.2% to 18,000 Won. Hana Financial rose 3,400 Won or 7.5% to 48,850 Won.

KEPCO extended strong gains for a fourth session, rising 1,200 Won or 3% to 41,300 Won, with investors attracted by its recent joint venture business in China.

Telecom stocks fell back on profit taking after several days of gains triggered by SK Telecom's deal to take over Hanaro Telecom. SK Telecom fell 13,000 Won or 4.9% to 253,000 Won and KT declined 1,400 Won or 2.7% to 51,500 Won.

Philippine shares closed higher for the seventh straight session Friday, also tracking gains on Wall Street after President Bush unveiled a plan to rescue homeowners facing foreclosures, easing concerns about the US subprime mortgage crisis.

After opening higher, the market seesawed in the final hour of trading as investors locked in some gains, but the main index still managed to finish at fresh four-week highs.

The composite index closed up 11.43 points or 0.3% at 3,745.39, off a high of 3,772.48. It was the key index's highest close since Nov 7 when it settled at 3,788.26.

The main index rose 4.7% from last week.

The broader all-share index gained 8.82 points or 0.4% to 2,273.63.

However, decliners outnumbered gainers 60 to 53, while 53 stocks were unchanged.

A total of 1.8 billion shares worth 4.8 billion pesos changed hands.

Banks and property developers paced gains, with Metropolitan Bank and Trust Co up 2 pesos or 3.3% at 62.50 pesos. Bank of the Philippine Islands rose 1 peso or 1.6% to 65 pesos.

Property developer Megaworld Corp advanced 10 centavos or 2.4% to 4.35 pesos.

Market leader Philippine Long Distance Telephone Co retreated 5 pesos or 0.2% to 3,120 pesos, giving up early gains.

Manila Electric Co was down 1.50 pesos or 1.7% at 87 pesos, snapping a six-day rise.

San Miguel Corp's A-shares, exclusive to Filipinos, fell 50 centavos or 1% to 50.50 pesos. The food and beverage conglomerate's B-shares, open to foreigners, lost 50 centavos or 1% to 51 pesos.

In Taiwan, Taipei Share prices closed off highs as late selling set in to pare early rises.

An increase in the amount of purchases by foreign investors Thursday also boosted the market in early trade. Net selling by foreigners had battered the Taipei bourse in recent weeks.

However, profit-taking and loss-cutting pressure emerged in late trade given lingering global economic uncertainties.

The weighted index closed up 27.97 points or 0.32% at the day's low of 8,722.38, off a high of 8,804.93, on turnover of 115.08  billion twd.

Decliners outnumbered advancers 1,139 to 872, with 471 stocks unchanged.

For the week, the index gained 135.98 points, or 1.58%.

Nine stocks closed limit-up, while 33 were limit-down.

The petrochemical sector was up 1.35% and financials gained 1.05%.

The transport sector lost 0.58% and electronics dropped 0.04%.

The Taiwan Dollar ended the morning session at 32.313/Dollar, compared with the previous close of 32.309.

Acer closed 1.00 twd lower to 66.40 after late selling eroded its early rally boosted by the news that the computer vendor expects its 2008 revenue to surpass 20  billion usd before climbing to 30-40  billion usd by 2012.

Quanta Computer gained 0.50 twd to 49.00 as its parent-level sales in November rose to 82.27  billion twd from 53.56  billion in the same month a year earlier.

AU Optronics fell 0.40 twd to 63.40 and High Tech Computer fell 11.00 twd to 625.00 despite strong November sales.

Formosa Plastics rose 1.60 twd to 91.20, Nan Ya Plastics added 1.30 twd to 88.00, Formosa Chemicals & Fibre added 0.30 twd to 82.90, and Formosa Petrochemical advanced 1.10 twd to 95.00 after Taiwan Ratings Corp raised its long-term corporate credit ratings on the four companies.

Among other stocks in focus, Taiwan Semiconductor Manufacturing Co added 0.70 twd to 62.60; United Microelectronics added 0.05 twd to 19.50; MediaTek was steady at 427.50; while Cathay Financial Holdings rallied 1.40 twd to 72.10.

Indonesian shares closed lower Friday as profit-takers dominated the afternoon session, putting telecom and mining stocks under pressure and ending the key index's rally after a four-day run.

The composite index closed down 16.45 points or 0.6% at 2,778.95, off a fresh all-time intraday high of 2,818.54. The previous intraday high was 2,802.68 set yesterday.

For the week, the composite index was up 90.62 points or 3.4%.

The LQ-45 index was down 4.90 points at 612.91.

Volume was 4.71 billion shares valued at 6.33 trillion Rupiah.

The Indonesian Rupiah was trading at 9,267/9,278 to the US Dollar, compared to 9,260/9,270 late Thursday.

Singapore shares closed slightly higher as select blue chips held on to small gains while the broader market succumbed to profit-taking in afternoon trade.

The Straits Times Index rose 5.40 points or 0.2% at 3,557.95, after trading between 3,549.5 and and 3,621.84 points.

Decliners led gainers 447 to 353, with 895 stocks unchanged.

Volume was 1.8 billion shares valued at 2.2 billion Singapore Dollars.

Banking stocks were higher with DBS Group up 10 Singapore cents at 21.10 Dollars, United Overseas Bank adding 10 cents to 20.10 Dollars and Oversea-Chinese Banking Corp 5 cents higher at 8.60 Dollars.

Singapore Telecom gained 6 cents to 3.84 Dollars on expectations it will continue to benefit from the strong regional economy.

Among other blue chips, ST Engineering added 2 cents to 3.68 Dollars but Singapore Airlines shed 20 cents to 18.10 Dollars and Singapore Exchange fell 50 cents to 14.40 Dollars while Singapore Press Holdings was unchanged at 4.74 Dollars.

Property heavyweights were higher, recovering from a recent slump, as investors picked up select stocks where they found value. CapitaLand was up 5 cents at 6.95 Dollars, Keppel Land gained 20 cents to 7.90 Dollars and City Developments added 10 cents to 14.50 Dollars.

Shipyard operator SembCorp Marine added 22 cents to 4.50 Dollars after Credit Suisse increased its price target for the company to 6.30 Dollars from 5.00 Dollars to reflect higher earnings expectations.

Credit Suisse also lifted its target price for SembCorp Industries to 7.70 Singapore Dollars from 6.80 Dollars. SembCorp Industries finished unchanged at 5.80 Dollars.

Malaysian shares closed Friday lower as investors took profits in select blue chips ahead of the weekend after the key index hit fresh records three times this week.

Gains in plantation, oil and banking stocks helped limit the market's overall loss.

The Kuala Lumpur Composite Index (KLCI) lost 6.35 points or 0.4% to settle at 1,434.04, after rising to a fresh intraday high of 1,449.70. The KLCI has hit record levels for three days in a row.

For the week, the KLCI gained 38 points or 2.7%.

The FTSE Bursa Malaysia 30-large cap index was down 32.35 points or 0.4% at 9,213.56 and the FTSE Bursa Malaysia second board index was 10.53 points or 0.2% lower at 6,782.13.

Decliners led gainers 554 to 285, with 280 stocks unchanged and 226 counters untraded.

Trading volume was low at 842 million shares, valued at 1.7 billion Ringgit.

At the close, Sime Darby, the world's largest listed palm oil company by planted area, dropped 30 sen or 2.6% to 11.20 Ringgit.

IOI Corp, Malaysia's second largest palm oil producer by market value, was among the leading gainers, jumping 30 sen or 4.2% to 7.40 Ringgit.

Among other index heavyweights, national power company Tenaga Nasional was down 20 sen or 2% to 9.80 Ringgit, Telekom Malaysia dropped 10 sen to 11.20 Ringgit and Maybank added 10 sen to 11.90 Ringgit.

Elsewhere, infrastructure group YTL Corporation succumbed to profit-taking, losing 35 sen or 4.1% to 8.20 Ringgit after strong gains yesterday.

Its managing director Francis Yeoh said the company is confident of securing the multi-billion Ringgit bullet train project linking Kuala Lumpur and Singapore.

YTL also said it has partnered with Lehman Brothers Investment Pte Ltd to jointly develop a resort project in Thailand's Koh Samui.

Oil and gas company KNM added 5 sen to 7.45 Ringgit on the company's plan to acquire a foreign rival early next year in a 2 billion Ringgit deal.

At the close, the Ringgit was quoted at 3.3230/3260 against the US Dollar and three-month interbank rates were at 3.60/61% and overnight rates stood at 3.48/50%.

Thai shares closed lower on Friday as investors stayed on the sidelines ahead of the Federal Reserve's rate-setting meeting next week.

The Thai market also fell on profit-taking in energy-linked stocks.

The Stock Exchange of Thailand (SET) composite index fell 3.80 points or 0.5% to 841.39 and the blue-chip SET-50 index slipped 3.88 points to 616.89.

Decliners led gainers 185 to 114, with 143 stocks unchanged.

Turnover was 1.4 billion shares worth 19.6 billion Baht.

The Thai Baht closed at 33.71-73 to the Dollar, marginally up from Thursday's 33.79-80. Against the Euro, the Thai currency was quoted at 49.30-32 from 49.20-26.

Top energy firm PTT fell 10.00 Baht to 356.00 and its subsidiary PTT Exploration and Production declined 3.00 to 155.00, but Thai Oil rose 1.00 to 87.00.

The kingdom's top lender Bangkok Bank added 2.00 to 119.00.

Thai Airways International gained 1.00 to 38.00, but the kingdom's biggest mobile phone operator, Advanced Info Service, lost 1.50 to 93.50.

Indian shares closed a volatile session higher Friday, helped by strong global cues and an unexpected slowdown in the inflation rate.

Government data released yesterday afternoon showed India's wholesale price index-based inflation rose 3.01% for the week ended Nov 24 from a year ago, compared to the 3.21% rise the previous week.

The Bombay Stock Exchange's benchmark Sensex closed 170.13 points, or 0.86% higher at 19966 points, while the National Stock Exchange's S&P CNX Nifty closed 0.33% higher at 5974.30 points.

Meanwhile for the week, India's Sensex is up more than 600 points, while the Nifty gained 211 points.

Stocks of companies with lesser capitalisation, however, ended in the red today after rallying over the past few sessions. The BSE's midcap index lost 11.80 points or 0.13% to 9021.96, while the smallcap index closed 18.46 points or 0.16% lower at 11342.27.

ICICI Bank extended gains to close 4% higher at 1247.50 Rupees after reports quoted its joint managing director as saying the company is aiming for 30-35% growth over the next three years.

Two of the biggest telecom players Bharti Airtel and Reliance Communications both advanced even as the logjam over the telecom regulator's proposed norms -- which call for an up to 15 times hike in subscriber base for operators to qualify for more spectrum -- continued.

CDMA player Reliance Communications rose 2.17% to 734.30 Rupees after the Department of Telecom gave it an all-India GSM licence, while Bharti Airtel rose 2% to 959.65 Rupees amid reports it will launch services in other South Asian countries such as Bhutan, Nepal, Bangladesh and Maldives.

On the flipside, Hindalco Industries extended losses as investors took profits from the scrip's good run over past few sessions. It closed 2.51% lower at 188.15 Rupees.

Down under to Sydney where Australian shares closed higher on Friday, tracking gains on US markets.

The S&P/ASX 200 closed up 53.8 points or 0.8% at 6,654.7, after trading between 6,612.0 and 6,671.4. The benchmark index is up 121.6 points or 1.9% for the week.

The All Ordinaries closed 53.5 points or 0.8% higher at 6,714.0.

Volume traded was 1.80 billion shares worth about 5.48 billion Australian Dollars.

Gainers outnumbered decliners 747 to 530, with 356 stocks unchanged.

The S&P/ASX 200 December futures contract was up 45 points at 6,667.

The yield on the 10-year bond rose 0.03percentage point to 6.04% while the yield on 90-day bills was down 0.009percentage point at 7.253%.

Major banks were higher, with National Australia Bank rising 16 cents or 0.4% to 39.22 Dollars, Australia & New Zealand Banking Group up 36 cents or 1.3% to 28.48 Dollars, Commonwealth Bank up 32 cents or 0.5% to 60.69 Dollars and Westpac 63 cents or 2.2% higher at 28.93 Dollars.

Merger and acquisition speculation centred on the resources sector after Midwest Corporation was placed in a trading halt at the company's request pending an announcement. Midwest, an iron ore miner, yesterday said it is in talks with several parties over possible transactions.

Chinese steel maker Sinosteel, Fortescue Metals Group and Gindalbie Metals were rumoured to be the mystery parties. Midwest last traded at 4.85 Dollars, up 10 cents or 2.1% on the previous day.

Rio Tinto, another takeover target, jumped 74 cents or 0.5% to 145.48 Dollars after its chief executive Tom Albanese described BHP Billiton's three-for-one share offer as being 'dead in the water'.

Rio has already rejected the merger proposal from BHP on the grounds it undervalues the miner's assets and growth potential.

BHP's proposal is also facing increasing resistance from China's largest steel maker, Baosteel, which publicly called on the Australian government to stop the deal.

Senior manager of strategy and planning at Baosteel, Fang Xiaodong, told the Australian Broadcasting Corporation that he wants the newly elected Rudd government to intervene to prevent the merger.

BHP closed 12 cents or 0.3% higher at 43.50 Dollars.

Surfwear and accessories retailer Billabong International surged to 14.90 Dollars after announcing the acquisition of swimwear maker Tigerlily from its founder Jodhi Meares for an undisclosed sum. Billabong settled at 14.73 Dollars, up 3 cents or 0.2% from Thursday's close.

And rounding out the region this week we go to Wellington where New Zealand's NZX 50 index closed up 45 points to 4088 on Friday.

Auckland International Airport closed up 7c to $2.89, and Sky City was up 6c to $4.91. Telecom was up 13c to $4.44 and fellow market heavyweight Fletcher Building was up 29c to $11.69.

The Warehouse was up 10c to $6.64 after reports that Foodstuffs and Woolworths have already started talks with the retailer.

Commodities - Fears over the outlook for global growth ensured downward pressure on base metals this week while oil struggled for direction in spite of Opec?s decision on Wednesday to keep its current production quota unchanged.

News on Friday of a sharper-than-expected fall in US consumer confidence in November contributed to renewed weakness for oil prices. Nymex January West Texas Intermediate dropped $2 to $88.23 a barrel on Friday, for a fall of 0.5% this week. ICE January Brent lost $1.63 at $88.55 a barrel on Friday, up 0.3% this week.

Dollar weakness affecting the revenues of oil producers and the recent retreat in crude prices from a record $99.29 a barrel were seen as key factors behind the cartel?s decision to keep its production quotas unchanged.

But in spite of the fall in spot oil prices, long-term prices have barely moved. WTI June 2015 futures traded above $85 a barrel on Friday.

At Barclays Capital?s third annual commodities conference held in New York this week, an audience survey found that more than half of the participants thought oil prices would be above $100 in five years.

Gold slipped 0.8% to $796.90 a troy once on Friday but gained 1.8% over the week. Gold made a couple of forays above $800 but struggled to maintain a grip above that level.

However, traders said that rising levels of risk aversion, concerns about inflation and any further weakness in the Dollar would provide further support for gold prices.

Platinum rose 1.2% to $1,455 a troy ounce this week amid supply concerns after miners in South Africa held a one-day strike on Tuesday over safety to protest at the mounting death toll in the industry.

The outlook for base metals has been clouded by global macroeconomic concerns, illustrated this week by China indicating that monetary policy would tighten further to prevent overheating.

Lead was the weakest performer, sinking 12% to $2,692.5 a tonne this week, amid expectations the Magellan mine, which produces 3% of global output, will restart production early in 2008. Over the week, zinc dropped 6.2% to $2,435 a tonne, while copper fell 1.3% to $6,905 a tonne. Aluminium eased 0.6% to $2,485 a tonne, and nickel edged 0.9% higher to $27,350 a tonne.

Exchange stocks for some metals have risen in recent months, viewed by many as a signal of slowing demand. Some merchants and consumers have struggled to obtain financing after the recent credit crunch and RBC Capital Markets said this meant they were unable to hold inventories and had been forced to deliver metal to exchanges. This shift from ?just in case? to ?just in time? inventory management could mean stock increases were a one-off and an inventory decline may resume, according to RBC.

Currencies - Sterling and Canada?s Dollar were the biggest casualties on currency markets this week as the Bank of England and the Bank of Canada cut interest rates.

Canada and the UK became the second and third of the G7 nations after the US to embark on monetary easing as the financial turmoil of recent months had a negative impact on the economies of both countries.

The UK central bank cut its main rate by 25 basis points to 5.5% on Thursday, as financial market conditions worsened.

The problems facing the Bank were highlighted this week by data showing falling house prices and slowing service-sector activity ? the jewel in the crown of the UK economy.

The Pound had a poor weekly performance as talk turned to how far the Bank?s monetary policy committee would be forced to move.

Sterling fell 1.2% over the week to $2.0296 against the Dollar, by 1.5% to £0.7213 against the Euro and 0.8% to Y226.55 versus the yen.

The Bank of Canada provided the first of this week?s central bank decisions. It said the unfolding subprime crisis in the US and the weak US Dollar were behind its decision to cut its benchmark rate by 25bp to 4.25%.

The Canadian Dollar has had a turbulent ride since hitting parity with the US Dollar in September. The loonie peaked just below $0.91 last month, but has since fallen sharply as oil prices dropped and the economy weakened. The currency fell 0.7% this week to $1.0058.

The surprise of the week was the suggestion by Jean-Claude Trichet, president of the European Central Bank, that the ECB?s board had discussed a rate increase before coming to its decision to leave the main Eurozone rate at 4%.

Mr Trichet was very hawkish in his statement, leading most analysts to believe the ECB would leave rates on hold throughout 2008.

The Euro rose 0.6% over the week against the yen to Y163.50, but was flat against the Dollar at $1.4647.

Rate decisions also came from the Reserve Banks of both Australia and New Zealand. They held at 6.75% and 8.25%, respectively, and both presented similar outlooks.

New Zealand?s central bank said a surge in domestic demand had boosted the economy, but subsequent inflationary pressures meant rates would remain at current levels until 2009. The kiwi rose 2.1% to $0.7795 against the US Dollar.

The Australian Dollar fell 0.5% to $0.87, however, as most investors had expected the Reserve Bank to continue its recent run of rate increases.

Yesterday?s non-farm payrolls data had little impact as the 94,000 jobs added to the US economy in November was already factored into the market.

The Dollar, however, had been firmer for most of the week, boosted partly by the decision at the beginning of the week by the Gulf Co-operation Council states not to abandon their Dollar pegs.

The Dollar rose 0.5% to Y111.66 against the yen as carry trades made a comeback at the end of the week.

The New Zealand Dollar gained most from the hunt for yield-based gains, rising 2.7% to Y87.13.

The South African Rand added to gains this week, but was rebuffed at the 6.68 Dollar support level.The Rand traded at 6.7050 to the Dollar at 1540 GMT, 0.22% stronger than its previous close in New York. It earlier touched 6.68, its firmest level in three weeks, and was holding steady against the Euro.
 
And as always, we close currencies this week with the RMB - which closed at 7.4030 to the Dollar on the over-the-counter (OTC) market, compared to 7.4095 Thursday.

China - ArcelorMittal, the world's largest steelmaker, said Friday it will offer at least $1.65 billion for the remaining shares in China Oriental Group Co. that it does not own after a ruling by Hong Kong's securities regulator.

But an analyst said Beijing was unlikely to give its approval for foreign majority ownership in such a strategic sector of the Chinese economy as steel.

ArcelorMittal said it would offer at least 6.12 Hong Kong Dollars ($0.79) a share, the same price it paid for a 28.02% stake, or 820 million shares, in the Chinese steelmaker last month, according to a statement posted on China Oriental's Web site.

That would bring the total offer price for the remaining 2.1 million shares to at least HK$12.9 billion, or $1.65 billion.

The Luxembourg-based steelmaker said it would maintain China Oriental's listing on the Hong Kong stock exchange.

The purchase would still need to be approved by China's communist leadership, which has strict rules on foreign majority ownership.

They would have to go through an approval process, and the chances are of approval being given any time soon is highly unlikely. Steel is not thought of in China as it is in other places. It's not just a commodity, it's a strategic part of the economy.

ArcelorMittal has been expanding its investments as it seeks to build its position in the world's biggest steel-making and consuming market.

However, its bid to buy a 38% stake in state-owned mid-sized steelmaker Laiwu Steel Corp. stalled after Chinese regulators demanded a higher price to let the deal go through.

Approval for the China Oriental takeover would depend on how much Beijing wanted to be seen as interfering with a private company.

The government has made it very clear that it does not want foreign majority ownership in state-owned steel mills, but in this case, it's a private-owned company, and it's up to the chairman to decide how much of his shares he wants to sell.

The Chinese company makes steel billets, strips, cold-rolled and galvanized steel at factories in Hebei province in northern China and in Guangdong province in the south.

The Hong Kong Securities and Futures Commission ruled Thursday that ArcelorMittal had acted in concert with China Oriental's chairman, Han Jingyuan, to buy the 28% stake. Under Hong Kong listing rules, ArcelorMittal is now obliged to make a general offer for the rest of China Oriental, according to a statement posted on the regulator's Web site.

ArcelorMittal's support would help the company become one of China's leading producers of heavy-section steel, said Han, who holds a 45% stake in the company.

ArcelorMittal said it would share technology and technical expertise with China Oriental, and assist the Chinese company with sourcing iron ore and coal.

"We have made no secret of our wish to participate more actively in the China's fast growing steel market, and the agreements we have signed are a major step forward in delivering that strategy," Lakshmi Mittal, ArcelorMittal's president and chief executive officer, said in the statement.

China Oriental's shares have been suspended from trading on the Hong Kong stock market since 7 November.

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Chinese companies stepped up their efforts to acquire overseas natural resources assets with two separate takeover bids on Friday for an iron ore company in Australia and a copper miner with operations in Peru.

Sinosteel, one of China?s largest steelmakers, made a A$1.19bn ($1.04bn) cash bid for Midwest Corporation, the Australian iron ore explorer, in what would be one of the largest takeovers in the industry by a Chinese company.

China Minmetals Nonferrous Metals, the metals trading group, and mining group Jiangxi Copper have made an agreed $450m cash bid for Northern Peru Copper, a mining company listed in Canada.

According to Dealogic, the research group, Chinese companies have invested $1.14bn this year in 11 foreign-listed mining groups, which is already a big rise from the $829m they spent last year.

Chinese companies have been making overseas acquisitions for a while, but events such as the possible takeover of Rio Tinto have made people think more seriously about it. Chinese companies now have more money and more experience to do these kinds of deals.

Chinese companies have mostly invested overseas in smaller mining operations, in spite of speculation a Chinese consortium might try to launch a counter-bid for Rio Tinto, which has received a $140bn bid from BHP Billiton.

The bid for Minmetals by Jiangxi is the third by Chinese companies in Peru this year, following Chalco?s $790m takeover of Peru Copper and Zijin Mining Group?s takeover of London-listed Monterrico, which has a $1.4bn copper mining project in Peru.

Midwest announced late on Friday it had received an offer from the Chinese company for A$5.60 in cash per share.

However, it said the bid was ?incomplete, non-binding, subject to due diligence and a number of other conditions?.

Midwest is also in early-stage takeover talks with another party, which it has declined to identify, and is being pursued by Murchison Metals, a rival Australian-listed iron ore miner that has had an offer worth A$1bn rejected.

Dealogic said a A$1.19bn takeover of Midwest would be China?s largest mining takeover.

Sinosteel already has an option to acquire up to half Midwest?s iron-ore projects. Other Chinese backers are behind a separate venture to build the supporting infrastructure on its behalf.

Northern Peru, which has a copper, gold and molybdenum project in Peru, said it was supporting the C$13.75 a share bid.

In 2005, Minmetals made a $5bn bid for Noranda, another Canadian mining company, but later left the bidding. That offer triggered strong political opposition in Canada.

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China's Central Government will increase its overall investment budget and continue to adjust investment structure, the nation's top economic planning agency said on Friday.

Ma Kai, head of the National Development and Reform Commission, said at a national development and reform meeting that after "continuous and rapid" increase in fiscal revenue in recent years, China will mainly use its fiscal expenditure to improve people's livelihood and boost economic and social development in weak and backward areas.

He didn't disclose the specific figures for 2008, noting a relevant ministry is working at the budget.

The fiscal budget for 2007 reached 2.687 trillion yuan (358.2 billion US Dollars), up 14.4% year on year.

Ma said the larger investment will be mainly used in construction of rural regions and the western areas, energy-saving and emission reduction projects, innovation, social welfare and on major infrastructure projects.

Ma said that the central government planned to issue smaller amounts of long-term construction debts next year.

The 2007 Central Economic Work Conference, which finished on Wednesday, said China will maintain a "prudent" fiscal policy for the coming year.