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Banks and insurers were again the main beneficiaries as improved sentiment marked a move away from seemingly overvalued defensive shares.

The FTSE Eurofirst 300 banking sector, over the week, gained 8.6%, taking its gains since its March 9 low to 36%.

Meanwhile, the pharmaceuticals and biotechnology sector, seen as less vulnerable to the swings of the economic cycle, lost 1.6%.

The Eurofirst 300 index as a whole rose 2.16% over the week to 717.88 - it has now lost 13.6% for the year.

The Eurofirst automotive sector underperformed, falling 0.8% over the week.

GERMANY

German stocks rose for a second week, sending the DAX Index to a one-month high, as gains in Bayer AG and utilities outweighed analyst downgrades of Deutsche Post AG, Deutsche Telekom AG and Fresenius Medical Care AG.

Bayer surged 11% Friday after the company cleared a regulatory hurdle in the US on a new anti-clotting pill. E.ON AG and RWE AG advanced as UK power for next-day delivery rose. Deutsche Post, Deutsche Telekom and Fresenius Medical all dropped at least 2%.

The benchmark DAX Index added 0.6% to 4,068.74, the highest level since Feb. 19. The measure advanced 2.9% this week as the Federal Reserve said it will buy as much as $300 billion of government bonds. Concern the measures won't be enough to halt the recession sent the DAX Index down as much as 1.2% earlier Friday. The HDAX Index of the country's 110 biggest companies increased 0.6% at the close.

Bayer jumped 11% to 37.74 Euros. Germany's largest drugmaker and Johnson & Johnson won a US panel's backing to introduce the first new anti-clotting pill in 55 years. Bayer was also raised to "buy" at Bank of America and Commerzbank.

E.ON added 4.8% to 20.35 Euros, while RWE gained 1.9% to 52.61 Euros. UK power for delivery on the next working day advanced as forecasts showed demand will climb to the highest in more than a week in the country, where both companies generate more than 10% of their revenue.

Deutsche Post, Europe's biggest mail carrier, slid 3.2% to 7.535 Euros as Commerzbank AG cut its recommendation on the stock to "hold" from "add."

Deutsche Telekom slipped 2.4% to 9.14 Euros after Europe's largest phone company was lowered to "underperform" from "neutral" at Credit Suisse Group AG, which cited "a more cautious view" on the company's operations in the US

Fresenius Medical sank 5.4% to 26.07 Euros, a third straight decline, after Bank of America Corp. downgraded the shares to "neutral" from "buy."

Centrosolar Group AG gained 4.4% to 2.14 Euros. The maker of solar cells said full-year earnings before interest and taxes more than doubled to 12 million Euros ($16.4 million) as revenue gained 51%.

Q-Cells SE, Germany's largest solar company, climbed 13% to 13.15 Euros, extending Thursday's rally. Equinet AG lifted its recommendation on the shares to "hold" from "reduce."

Roth & Rau AG slipped 0.9% to 13.57 Euros, snapping a four-day gain, after the world's largest maker of equipment used to coat solar panels was downgraded to "neutral" from "buy" at Goldman Sachs Group Inc. Solarworld AG (SWV GY) gained 6% to 14.28 Euros as Germany's third- biggest solar company was raised to "buy" from "neutral" by the brokerage.

Tipp24 AG climbed 5% to 9.97 Euros. Deutsche Bank AG raised its share-price estimate for the German Internet gambling company 8.6% to 19 Euros.

FRANCE

In Paris, the CAC-40 index closed at 2,791.14 points, up 14.15 or 0.51%.

French bank Societe Generale SA Friday revised the terms of its controversial stock options scheme amid sharp criticism from President Nicolas Sarkozy and other government figures, saying that its leading executives wouldn't exercise their rights under the plan for as long as the bank benefited from state funding.

Earlier the bank released a statement that said in order "to return to a more serene debate on the long-term remuneration of executives, top management has pledged not to exercise those stock option rights while SocGen receives help from the state."

SocGen late last year received Eur1.7 billion of the government's Eur10.5 billion initiative to prop up French banks. The Paris-based bank expects this year to request a similar amount under a second phase of the government aid package.

The reaction of French leaders adds fuel to the growing debate worldwide over rewards paid by struggling financial services businesses to their executives.

Sarkozy called the SocGen stock option plan "a scandal," and government spokesman Luc Chatel earlier in the day told Europe 1 radio that it was at odds with a corporate governance code adopted by French companies. Budget Minister Eric Woerth said the announcement of the plan was inopportune.

SocGen said this week that several of its top executives would receive stock options under the latest plan. Chairman Daniel Bouton will receive 70,000 and Chief Executive Frederic Oudea will get 150,000 at a strike price of Eur24.45. Based on a Friday's share price, Oudea's stock options are worth around Eur690,000.

The options allocated are vested for seven years and could be exercised only after three years, SocGen said.

SocGen also said Friday that the share option plan applies to 4,800 staff and conforms with new corporate guidelines agreed with the Medef French business lobby.

Renault SA said it will boost production of its Clio small car in France as the global recession and government sales incentives boost demand for more fuel-efficient vehicles.

France's second-largest carmaker will assemble the Clio II, also known as the Campus, at a plant in Flins, west of Paris, it said in a statement Friday. The move will create 400 jobs at the factory, which already makes the restyled Clio III.

Renault is boosting French production because a plant in Novo Mesto, Slovenia, can't satisfy demand for the Clio and Twingo models it makes on a single production line. Smaller cars have bucked an overall slump in auto sales as buyers tighten budgets and state-funded "scrappage" programs encourage purchases of less-thirsty vehicles.

Like other Western automakers, Boulogne-Billancourt- based Renault has shifted output to lower-cost countries in recent years to help cut costs. The company said Friday it will seek to fill the new jobs by transferring workers from other French sites. Renault manufactured some Clio IIs at the Flins site last year as the Slovenian plant neared capacity.

The increase in French output is a response to higher demand and does not involve a reduction in assembly abroad, Renault said. French Industry Minister Luc Chatel said earlier Friday on Europe 1 radio that Renault would "repatriate" production of a vehicle to the Flins plant.

France last month granted 6 billion Euros ($8 billion) in soft loans to Renault and PSA Peugeot Citroen in return for commitments to maintain local jobs. The government later dropped the condition after European Union objections.

European Commission President Jose Barroso said in Brussels Friday that he was not aware of any decision from Renault that contradicted EU regulations, though the commission needs to verify whether the plans are compatible with internal market rules.

BELGIUM

The Bel 20 in Brussels remained solid Friday, up 1.13% to close at 1,708.66 on the day.

Shares in Sioen Industries sink as much as 6.7% after the Belgian specialty textile group reports an 82% nosedive in 2008 net profit, slashes its dividend and gives a cautious outlook for the future.

Sioen trades down as far as 6.7% at 2.80 Euros and are off more than 70% from its 12-month high of 9.98 Euros reached in May 2008. The Belgian small-cap index is 0.5% lower.

"We continue to forecast 25% lower sales in 2009, given the group's large exposure to the construction and transport sectors," writes KBC in a note to clients.

"Such a decline will significantly hit the group's earnings, in spite of lower raw material costs and ongoing costs savings," adds Sierens, who has a "hold" rating and a 3 Euro target price for Sioen.

The Belgian government will not receive a so-called golden share in French utility Gaz de France Suez (GSZ.PA) as previously agreed with the French government, Belgian financial daily De Tijd said on Friday.

Belgium's dominant gas and electricity company Electrabel is fully owned by the French group and French President Nicolas Sarkozy had promised the Belgian government last July it would receive the right to veto strategic decisions concerning Belgium's energy supply or key infrastructures.

But Prime Minister Herman Van Rompuy told parliament on Thursday the government would not be granted a golden share, De Tijd said.

Instead, a special committee made up of the Belgian and French energy ministers and a representative of GDF-Suez would safeguard Belgium's energy interests, the paper added.

A spokesman for Prime Minister Herman Van Rompuy was not immediately available for comment.

The golden share negotiations ran into trouble last year due to French legislation which makes it hard for a foreign country to be granted a golden share in a French group, but former Prime Minister Yves Leterme said at the time that he was confident these legal problems could be solved.

THE NETHERLANDS

In Amsterdam the AEX managed solid gains Friday, up 1.11% to round out the week at 212.71.

Dutch private bank Van Lanschot reported on Friday an expected 86% fall in 2008 profit and said it did not expect to return to former levels of profitability, sending its shares down 10%.

Van Lanschot booked a net profit of 30.1 million Euros ($40.6 million), in line with analysts estimates and the group's own forecast last December of about 30 million Euros. It made a profit of 215 million Euros in 2007.

Van Lanschot, a top-five Dutch private bank and rival of Dutch ING and Belgian KBC, gets almost half of its income from commissions on transactions for clients, but lower equity markets pushed commissions down 26%.

Van Lanschot shares were down 10.1% at 35.89 Euros by 0817 GMT compared with a 2.8% fall of the DJ Stoxx European banks index, which does not include Van Lanschot.

Royal BAM Group NV announced Friday it has completed the acquisition of the remaining 49% interest in property developer AM, as announced 27 November 2008.

BAM has now full ownership of all AM shares. The price which in 2006 was agreed with a consortium of investors for the 49% interest amounted to Eur49 million excluding any dividend still due for the 2008 financial year and for part of 2009.

AM - as an operating company of BAM - will continue to operate in its markets under its own name and identity.

SWITZERLAND

The Swiss market index closed at 4,787.17 points, down 7.46 or 0.16%.

Brokers Collins Stewart have Friday said that the quantitative easing programme embarked on by the Bank of England will prove to be a positive for insurance giant Zurich.

On March 19th the Bank of England announced it would start to buy Sterling corporate debt through a series of reverse auctions from March 25th.

Zurich has material corporate bond exposure

"Zurich had a $51bn corporate bond portfolio at year-end 2008, of which we estimate 54% is shareholders' share. "This gives a ratio of 128% to year-end NAV, a material gearing to movements in unrealised gains and losses, and among the highest of the stocks we currently cover (Hannover Re's was higher at 164%). Other stocks in the sector with material corporate bond exposure include L&G, Prudential, Aegon, Allianz and Axa. Swiss Re's corporate bond portfolio is largely hedged.

"Zurich has performed well in absolute terms as the market has rallied, but still only trades on 6x 2010E EPS and 1.2x historic tangible NAV. We think the core P&C unit should be a robust earner, even in a difficult economic environment, and the capital position is solid, even if asset prices decline further. Zurich will also pay a CHF11 per share final dividend on April 7th, putting it on a (near-term) prospective yield of 6.4%." Collins Stewart stated Friday.

In the fallout from the financial crisis, Switzerland is coming under increasing pressure to withdraw its banking secrecy laws. In addition to the calls for banking transparency, financial services institutions and governments around the world are fighting to increase their income, a battle which could now threaten Switzerland's dominant position as a wealth management center.

One agent pushing for change is that beleaguered pillar of Swiss wealth managers, UBS. Not only has UBS suffered the indignity of enormous losses, but the bank is currently before a US Senate committee to answer questions regarding its offshore banking practices, including the possible charge that it conspired to defraud the US government of taxes owed by its American clients (which the bank has declined to name).

The difficulty lies in the nature of Swiss banking privacy laws. The US government needs to provide significant evidence to back up its suspicions that any individual client is guilty of tax fraud, as without it the Swiss authorities will not assist in any foreign investigation, instead protecting the privacy of Swiss bank clients. However, "significant evidence" can be difficult to find during the course of an investigation, especially when only some of this information is available to the investigator. And, in the context of interlinked global financial markets, Swiss banks - and the Swiss authorities - need to accept the laws of the country in which their banks are operating.

The new CEO of UBS, Oswald Gruebel, has publicly stated that Switzerland needs to change its banking secrecy laws. In fact, he is admitting that it will no longer be possible to protect clients in the way that Switzerland has done previously, given the pressure that is being applied not just from the US authorities, but also from Germany and the UK.

However, there is contention over what lies at the heart of the pressure on Switzerland. Is it governments wanting to ensure that they get the taxes they are rightfully owed, or is it because the financial crisis has put pressure on the industry to challenge Switzerland's dominant position as a wealth management center so that Dollars can be pumped back into other global financial centers? Either way, the result is the same. Banks and countries are short of cash, and the wealthy need to spread it around - legitimately. For Switzerland, the price will be high, as a fall in the financial sector's share of GDP will have a significant impact upon the wealth of the nation.

AUSTRIA

The ATX in Austria rounded out the week at 1,627.43, a gain of 1% on the day.

Austrian financial sector groups have jumped to the defence of the economies of Central and Eastern Europe, after credit rating agency Moody's threatened to downgrade banks exposed to the region.

For the economies of Central and Eastern Europe, the current global economic downturn is threatening to throw away 18 years of the progress made in building a market economy, and with it the ultimate prize of re-integration with the rest of the European community. But there is also a sense of grievance over reports from credit rating agencies that are aggravating an already difficult climate.

A report by Moody's has made some bleak forecasts for the region. "After years of strong economic growth facilitated by hefty capital inflows, East European countries appear to be headed for hard landings in 2009," says the report. Moody's predicts that "while economic growth will slow globally, the downturn in Eastern Europe will be more severe as a consequence of many countries' dependence on such capital flows to finance large current account deficits. A few countries also have sizeable fiscal deficits, the highest being Hungary, with a 5.5% deficit-to-GDP ratio in 2007."

From an investor's point of view, countries with large macroeconomic imbalances are a risky proposition. As the report says: "The recent scarcity of international funding has increased substantially the vulnerability of these economies. Currency depreciation exacerbates foreign currency debt pressures, and those countries with fixed exchange rates or currency boards need even tighter fiscal policy to constrain credit demand in the absence of the exchange rate lever."

The report has caused consternation in Austria, the country whose financial services community is most closely connected with the economies of Central and Eastern Europe. The sense of grievance in the country over the report is strong.

Michael Buhl, joint chief executive of the Vienna Stock Exchange, says: "Moody's is a powerful institution and investors have reacted strongly to their report, perhaps too strongly." He questions whether Moody's has decided to review the CEE markets so negatively in an attempt to recover its reputation, tarnished as a result of the sub-prime debacle in 2007, which exposed the worthlessness of top credit ratings given to many asset backed credit derivatives.

Austrian financial services groups, such as Vienna Insurance Group, Erste Bank and Raiffeisen Group were among the first to move into Central and Eastern European markets, as they opened up after the fall of the Berlin Wall in November 1989. They were quickly followed by other European banks from Sweden (SEB and Swedbank), France (Société Générale, BNP Paribas and Calyon), Italy (UniCredit and Intesa Sanpaolo) and Belgium (KBC), all snapping up banks and insurance companies in the wake of the post-communist privatisation programme.

The Austrian National Bank predicted Friday (Fri) there would be a 1.5% drop in growth in the first quarter and a 0.7 slowdown in the second quarter.

OeNB said the decline of 1.5% in the gross domestic product (GDP) in the first quarter of 2009, compared to the last quarter of 2008, showed the downward trend in the national economy was "clearly accelerating."

The bank added it was likely that figures for the fourth quarter of last year were too high and would have to be adjusted.

The Vienna real-estate firms Immofinanz has denied rumours that certain investors are interested in taking over its Eastern European subsidiary Immoeast.

SWEDEN

The Stockholm OMX 30 dropped heavily Friday, down 2.65% to close at 661.59.

Handset maker Sony Ericsson said it expects to ship about 42% fewer phones in the first quarter than it sold in the previous quarter, heightening concern about the slumping cellphone market.

Sony Ericsson said Friday it expects to post a first-quarter pretax loss of €340 million to €390 million ($465 million to $533 million), well below market expectations. The loss excludes restructuring charges of €10 million to €20 million.

Volvo AB dropped 4.1% to 42.40 kronor. The Swedish maker of heavy trucks was cut to "underweight" from "neutral" at JPMorgan, which cited "the most severe downturn in the European truck market since World War II."

DENMARK

The OMX 20 in Copenhagen was down 0.78% Friday to close at 226.94.

Danish meat giant Danish Crown last week announced the first elements of a plan which aims to ensure competitiveness throughout the value chain, also in the future.

Under the name DC Future, employees at the Danish Crown head office in Randers, Denmark, were informed of the plan's initial measures, which this year include a pay freeze for all employees who normally negotiate their pay every year.

"Our owners are also our suppliers, and we must ensure competitive settlement prices for them. Otherwise, jobs are going to be lost in Denmark ," says Kjeld Johannesen, CEO.

Most Danish Crown employees in Denmark are paid by the hour and employed under a general wage collective agreement. They are covered by a three-year agreement, which this year is resulting in increased costs of just over DKK 120 million (€16.1 million) for Danish Crown.

"We are, of course, going to honour the agreements made - this sort of thing goes both ways. However, we are at the same time looking at cost increases which none of our foreign competitors are facing, and for this reason pay increases must be balanced by rationalisations and increases in productivity if Danish Crown and thereby jobs are to be safeguarded," Johannesen added.

The pay freeze is part of a broader package, and over the coming weeks the Danish Crown group must decide what other measures to implement under the DC Future plan.

"We are working on the early stages of the budget for 2009/10, and a lot can be gained by taking a smarter or fresh approach to things. However, I cannot rule out the possibility that we may have to look at the number of employees, also in administrative functions."

He is unable to say exactly when the next announcement will be made, but the Danish Crown management is hoping that the process will have progressed some way before the end of March.

"I appreciate the fact that his may be a cause for concern among employees, but we have decided to be as open as possible about this process, he concluded."

The head of Danish insurer Topdanmark on Wednesday said he saw no possibility of a friendly takeover by Finland's Sampo after it said it would consider a merger to grow its Danish market share.

"We prefer to remain on our own. We have always preferred that, and that hasn't changed," Topdanmark Chief Executive Poul Almlund stated.

"I don't see any possibility for a friendly takeover," he said, adding he also thought a hostile bid was unrealistic at the moment.

Sampo Chief Executive Bjorn Wahlroos told Jyllands-Posten a tie-up with Topdanmark was one of the paths it may take to grow its insurance market share in Denmark.

"A merger is one possibility, but it's a question of how to set it up. If one plays with the idea, there would definitely be large cost savings by putting If's (Sampo's Nordic insurance unit) Danish business into Topdanmark," Wahlroos was quoted as saying.

Almlund declined to comment on whether the companies had held talks on a possible deal.

Sampo already owns slightly above 11% of Topdanmark.

FINLAND

The OMX in Helsinki suffered heavily Friday, not helped by Nokia. The OMX closed down 2.24% to finish the week at 4,624.68.

Nokia Oyj, the biggest mobile-phone maker, retreated 6.2% to 8.35 Euros. Deutsche Telekom AG slid 2.4% to 9.14 Euros. Europe's biggest phone company was downgraded to "underperform" from "neutral" by Credit Suisse Group AG, which cited "a more cautious view" on the company's US operations.

Finnish steel maker Rautaruukki Oyj warned on Thursday it would make "a clear" loss in the first quarter due to weak demand and low steel prices, sending its shares sharply lower.

"The weaker than expected earnings performance is attributable to continued extremely low demand for steel products," the firm said in a statement.

"During the first months of the year, demand has also fallen as customers reduce high stockpiles, which in turn has also resulted in weaker than expected price development for steel products," it said.

NORWAY

The only Scandinavian bourse to make gains Friday with the OBX up 1.05% at 200.86.

Nordic bank DnB NOR rose 19.5% to NKr19.56.

Oslo bourse will cap the weight of oil company StatoilHydro in its OBX index .OBX at 30%, below Friday's 36%, to make the blue-chip index easier to track, the bourse said on Thursday.

The bourse will cap the largest stock in its market-weighted index of the 25 largest stocks at 30% and all other stocks at 15%, starting from Friday, it said.

"This will make it easier for the funds that track the index," product manager Linn Furuvald at Oslo bourse said.

Funds tracking the OBX index will then be able to comply with the European Union's UCITS mutual funds rules as well as Norwegian regulations, where only one constituent of an index fund is allowed to exceed 20% of the total market value.

Stocks will be capped in connection with the semi-annual rebalancing of the OBX in June and December, but may also be recapped if the largest stock closes at or above 35% or other stocks closes at or above 20%.

Oslo Břrs VPS Friday launched a service that will help companies listed on Oslo Břrs and Oslo Axess to identify the real owners of shares held in nominee accounts. This will contribute to greater openness and improved monitoring and control, and will thus help to further improve confidence in the Norwegian securities market.

Information on the identity of shareholders will also give companies a better basis for good IR activities and better communications with their owners.

There is a general feeling that the shareholder lists produced by VPS often do not give a real picture of a company's ownership because some foreign shareholders have registered their shares on what is known as nominee accounts.

This represents a growing challenge in terms of openness, good IR work and carrying out various types of corporate action. The new service Nominee ID helps companies to identify the real owners of their shares, putting them in a better position to understand the purpose of shareholders' positions and the balance of ownership between shareholders and fund managers.

SPAIN

In Madrid, the Ibex gained 0.11% to close at 7,710.00.

The Spanish market regulator set the deadline for acceptances for Gas Natural's bid for Union Fenosa, which values the company at 16.5 billion Euros ($22.3 billion), for April 14 on Friday.

Union Fenosa's shareholders can tender their shares in the offer from Friday, after the CNMV approved on Wednesday Gas Natural's 18.05 Euros per share bid for the 49.8% of shares it does not already own in the power company.

PORTUGAL

In Lisbon the PSI General dropped 0.05% having traded flat for most of the day to end at 2,076.60.

Shareholders of Portugal's second-largest listed bank, Banco Espirito Santo, on Monday approved a 1.2 billion Euro cash call at a subscription price of 1.8 Euros a share, with a premium of 0.8 Euros.

BES chief executive Ricardo Espirito Santo Salgado said the approval was practically unanimous and confirmed that a group of banks had already guranteed subscription for all the rights issue.

BES will now embark on a road show for the operation, for which it is yet to define a timetable. The capital raising, whose global coordinators are JPMorgan and BES Investimento, is designed to boost the bank's core-Tier 1 capital ratio to 8.25% from 6.1% as of the end of last year.

The cash call is to be carried out in stages, and the initial stage encompasses share issuance with 1 Euro nominal value.

Existing BES stocks now trade at around 5.7 Euros. They rose nearly 2% on Monday.

The 1.2 billion Euro rights issue was first announced in January. Last month, BES fixed 3 Euro maximum price in the cash call.

ITALY

Italy's benchmark S&P/MIB Index rose for a third day, gaining 199, or 1.4%, to 14,948 at 12:29 p.m. in Milan. Futures expiring in June rose 346, or 2.4%, to 14,615.

Fiat SpA fell 11 cents, or 2.3%, to 4.61 Euros. The carmaker said it won't assume any current or future Chrysler LLC debt as part of its agreement to purchase a 35% stake in the US automaker. The stock fell as much as 6% earlier on concern Fiat's assumption of part of Chrysler LLC's debt may weigh on its finances.

Fiat would assume responsibility for Chrysler's debt equal to its 35% equity stake, Chrysler's Chief Executive Officer Robert Nardelli said in a CNBC interview March 17.

Gruppo Editoriale L'Espresso SpA gained 7% to 62 cents. The stock trades in the benchmark S&P/MIB Index for the last day. Davide Campari-Milano SpA (CPR IM), one of the stocks joining the S&P/MIB as of March 20, surged 34.5 cents, or 7.6%, to 4.88 Euros.

Intesa Sanpaolo SpA, Italy's biggest bank by market value, will apply for 4 billion Euros ($5.5 billion) in government aid after posting a 1.23 billion-Euro fourth-quarter loss on writedowns. Intesa won't pay a dividend this year. Intesa rose 1.7% to 1.87 Euros.

Tenaris SA (TEN IM), the world's biggest maker of seamless steel tubes for carrying oil and gas, rose 0.8% to 7.4 Euros. Bank of America said the company may benefit from lower raw material costs, which should support profit margins. Tenaris held an investor presentation in New York Thursday, the broker said.

STMicroelectronics NV Europe's largest chipmaker, retreated 19 cents, or 5.4%, to 3.25 Euros, in line with technology stocks after Sony Ericsson Mobile Communications Ltd. Friday said it will report a pretax loss of as much as 390 million Euros in the first quarter as handset sale fall.

Unipol Gruppo Finanziario SpA fell 9.1% to 66 cents, after Italy's fourth-biggest insurer reported profit that missed analysts' estimates.

The company said Thursday after the close of trading that 2008 net income dropped 76% to 92.6 million Euros, missing the 151-million Euro average estimate compiled by Bloomberg. The company said it won't pay a dividend or give bonuses to managers on 2008 earnings.

GREECE

In Athens the Athex ended to day up 1.54%, closing out the week at 1,647.88.

Greek Prime Minister Costas Karamanlis said he could not rule out further emergency tax measures to deal with the economic downturn.

The Finance Ministry this week announced a one-off tax payment of 1,000-5,000 Euros ($1,350-6,775) for wealthier Greeks and a salary freeze for public servants with a gross monthly salary of more than 1,700 Euros ($2,230). Karamanlis said those measures would only be effect this year.

Japanese government bond yields fell a day after both the Japanese and US central banks said they will buy large quantities of government bonds in an effort to improve market liquidity and revive their economies.

The reaction in Tokyo was far more muted than in the Treasurys market, where the 10-year yield dropped almost a half-percentage point. In Japan, the benchmark 10-year yield shed 0.04 point Thursday to 1.26%.

The Japanese market was closed Friday for the Vernal Equinox holiday, and some investors have essentially stepped back ahead of the March 31 end of the fiscal year.

SOUTH KOREA

South Korean shares closed higher Friday, despite overnight losses in the US, with gains led by refiners and steelmakers.

The Korea Composite Stock Price Index, or Kospi, rose 9.13 points, or 0.8%, to 1170.94 as foreigners picked up both stocks and futures contracts.

Foreigners were net buyers of KRW103.1 billion of stocks and KRW146.1 billion of futures contracts.

The Kospi is tipped to move in the 1150-1200 band next week.

However, analysts said investors doubt the Kospi will be able to break above the strong resistance of 1200 without either additional policy momentum or economic data that show a convincing improvement in fundamentals.

A rebound in oil and commodity prices and the recent rise in the South Korean Won lent support to refiners and steelmakers, said analysts.

SK Energy rose 3.5% to KRW85,900, and Posco climbed 2.7% to KRW357,000.

Shipbuilders also advanced on higher oil and commodity prices, said Daewoo Securities analyst Sung Ki-jong.

Samsung Heavy Industries rose 2.4% to KRW25,500, and Daewoo Shipbuilding & Marine Engineering gained 5.1% to KRW21,500.

Banks lost ground on profit-taking, with Shinhan Financial Group falling 2% to KRW25,100 and KB Financial Group dropping 0.6% to KRW31,900.

GS Engineering & Construction fell 2.1% to KRW56,800 after Kuwait National Petroleum Co. notified GS Engineering and three other South Korean builders about the cancelation of a combined $8.36 billion in contracts awarded to them and Japan's JGC Corp in May.

But Hyundai Engineering & Construction and Daelim Industrial, which had also been awarded the scrapped contracts, recovered from early losses and ended up 1.5% at KRW54,200 and 1.7% at KRW49,000, respectively.

HONG KONG

China Mobile extended losses on a worsening earnings outlook while Chinese financial stocks tracked declines in their US counterparts overnight, pushing Hong Kong stocks lower Friday.

Traders said the Hang Seng Index may fall further in the near term, possibly toward 11,000 points, on concerns about deteriorating economic and corporate fundamentals.

The blue-chip Hang Seng Index fell 297.41 points, or 2.3%, to 12,833.51, after hitting an intraday low of 12,797.10. Turnover totaled HK$43.89 billion, down from HK$48.59 billion Thursday.

China Mobile fell 5.4% to HK$63.10, after a decline of 2.1% Thursday. It said Thursday its 2008 net profit rose to CNY112.80 billion from CNY87.10 billion in 2007, but profit growth slowed toward the end of the year amid intense competition and the weakening economy.

Bank of America Merrill Lynch downgraded China Mobile to neutral from buy and cut the target price on the stock by 15% to HK$73.00. It said China Mobile's earnings growth is decelerating, in part because depreciation expenses will rise as the company spends more to expand its network.

Chinese financial stocks tumbled, tracking a 16% drop in Citigroup's shares overnight, as the US banking giant prepared to issue preferred shares and sought approval for a reverse stock split, traders said.

Industrial & Commercial Bank of China fell 5.4% to HK$3.31, China Construction Bank dropped 5.2% to HK$4.16 and Bank of Communications shed 5.4% to HK$4.89.

CHINA

Resource companies rallied on expectations that the Federal Reserve's move to buy government debt will stoke inflation and push up the prices of resources, leading China shares to end higher for the fifth straight session Friday.

The benchmark Shanghai Composite Index, which tracks both A and B shares, ended 0.7% higher at 2281.09, or up 7.2% on the week.

The Shenzhen Composite Index was flat at 752.35.

Despite this week's gains, analysts said they expect the rally to run out of steam next week due to profit-taking pressure and lingering concerns over corporate earnings. They said the Shanghai index is likely to trade in a narrow range of 2200-2300 next week, barring any market-moving developments.

Zijin Mining Group rose by the 10% daily trading limit to CNY9.93, Western Mining rose 8.3% to CNY11.09, and Jiangxi Copper also ended limit up at CNY22.33.

Non-resource stocks were lackluster Friday due to concerns about the Fed's move and profit-taking pressure after four consecutive days of gains.

On the Shanghai bourse, companies that fell outnumbered those that rose by 251.

Haitong Securities ended down 1.3% at CNY12.73 after rising 3.3% Thursday, while Poly Real Estate Group dropped 4.4% after having risen 12.4% over the past four sessions.

TAIWAN

TSMC, the world's biggest contract chip maker, said on Friday it would end all unpaid leave for staff across the company from April, the latest sign of a recovery from the sector's downturn.

The decision came after TSMC (TSM.N) sharply raised its first-quarter sales and margin forecasts last week, due to rush orders from China, indicating a trend of falling sales that began six months ago had hit bottom. [ID:nTP219809]

"Recently, the furlough days of business organisations have been gradually reduced due to rush orders. After considering the business need, the company has made the decision to terminate furlough," TSMC CEO Rick Tsai said in a letter to staff.

TSMC released the news after the Taipei stock market closed on Friday. TSMC shares fell 3.1%, sharper than a 1.5% fall in the main TAIEX share index .

THE PHILIPPINES

Share prices closed 3.01% higher Friday, lifted by buying in index heavyweight Philippine Long Distance Telephone Co. (PLDT), dealers said.

The composite index added 53.64 points to 1,833.90 points while the all shares index rose 2.04% to 1,200.69 points.

There were 64 gainers, 19 losers and 41 unchanged. Turnover totalled 1.026 billion shares worth P2.996 billion ($62 million).

A holding firm of the Lopez family sold a 20-percent stake in Meralco to PLDT for $414 million last week, apparently trying to foil a rumoured hostile takeover bid by food and beverages giant San Miguel Corp.

PLDT rose 3.42% to P1,965.00 while the Manila Electric Co. rose 5.42% to P87.50.

Bank of the Philippine Islands gained 4.61% to P34.00 and Ayala Corp. rose 2.96% to P209.00.

San Miguel Corp. saw its A shares rise 1.19% to P42.50 while its B shares rose 1.17% to P43.00.

SINGAPORE

The Straits Times Index rose 12.06 points to 1,596.92, up 0.76% on the day.

Friday's rise in the STI was the third in as many days but dealers remained wary, saying the gains were not likely to be sustainable ahead of the earnings season.

Among the banks, DBS added four cents to 7.75 Dollars, United Overseas Bank gained 10 cents to 9.38 and Oversea-Chinese Banking Corp was three cents up at 4.56.

For the blue chips, Singapore Airlines was 22 cents higher at 9.71, Singapore Telecommunications fell one cent to 2.44 while Neptune Orient Lines was off a cent to 95.5 cents.

MALAYSIA

Share prices on Bursa Malaysia closed slightly higher on bargain hunting activities in selected key heavyweights like Sime Darby, Maybank and Tenaga, dealers said.

The benchmark Kuala Lumpur Composite Index (KLCI) also ended the day 4.64 points higher to settle at 856.82, led by the gains on selected heavyweights, after opening 0.68 point higher at 852.86.

The KLCI moved between 856.82 and 849.49 during trade Friday.

For next week, the market is expected to undergo window-dressing activities, ahead of the UMNO General Assembly.

Most investors are also expected to stay on the sidelines, awaiting the outcome of the assembly.

At close Friday, the Finance Index increased 3.86 points to 6,319.31, the Industrial Index rose 18.23 points to 2,072.57 and the Plantation Index eased 32.29 points to 4,354.18.

Of the FTSE-BM Index series, the FBMEmas rose 28.10 points to 5,570.02, the FBM30 gained 30.60 points to 5,477.69, the FBM2BRD increased 3.73 points to 3,839.18 and the FBM-MDQ declined 57.34 points to 2,953.14.

Gainers led losers by 243 to 207 while 187 counters were unchanged, 608 untraded and 33 others suspended.

The day's turnover increased to 311.746 million shares worth RM545.815 million from Thursday's 303.824 million shares worth RM543.544 million.

Volume on the Main Board slipped to 262.679 million shares valued at RM536,639 million from 267.394 million shares worth RM534.544 million previously.

Turnover on the Second Board was higher at 18.518 million shares valued at RM4.280 million compared to the 15.831 million shares worth RM3.489 million previously.

Volume on the Mesdaq Market declined to 9.494 million shares worth RM2.798 million from 14.815 million shares valued at RM3.831 million Thursday.

Warrants increased to 20.703 million shares valued at RM2.006 million from 5.397 million shares worth RM481,185 previously.

Among the actives, TMI gained 11 sen to RM2.35, KNM increased one sen to 36 sen and Resorts declined three sen to RM1.90.

As for the heavyweights, Sime Darby closed 20 sen higher at RM5.65, Tenaga rose 10 sen to RM6.30, Maybank gained 10 sen to RM4.36 and TM increased two sen to RM3.52.

INDONESIA

The Jakarta Composite Index rose 19.29 points to 1,360.89, a gain of 1.4%.

Top gainers included heavyweight Telkom, which climbed 6.0% to 7,100 rupiah on hopes for better-than-expected 2008 earnings.

Coal miner Bumi jumped 4.2% to 750, while nickel miner Antam finished 4.3% up at 11,200.

THAILAND

The Stock Exchange of Thailand composite index rose 1.92 points to 429.64 points, managing a 0.45% gain on Friday.

Thailand's top energy firm PTT Plc rose 2.00 baht to close at 151.00 and its subsidiary PTT Exploration and Production gained 2.50 to 97.50.

Coal producer Banpu also rose 2.00 to 212.00 while Siam Cement added 0.50 to 97.00.

INDIA

Indian shares snapped a two-session winning streak to end lower Friday on weak regional cues and an overnight fall on Wall Street as cautious investors booked profits before the weekend.

The market fell nearly 1.5% intraday in volatile trade amid concerns over the uncertain political outlook ahead of federal elections in April and May.

However, a move up is likely next week due to short covering before derivatives expiry on March 26 and year-end account closing by corporate houses on March 31, said analysts.

Friday, the Bombay Stock Exchange's 30-stock Sensitive Index fell 35.07 points, or 0.4%, to end at 8,966.68. The index, which traded between 8,867.13 and 8,999.98 Thursday, has risen almost 2.4% this week, but it is down 7% this year.

Total traded volume on the Bombay Stock Exchange was INR29.38 billion, compared with Thursday's INR39.74 billion. Gainers beat decliners 1,246 to 1,218, while 103 stocks were unchanged.

On the rival National Stock Exchange, the 50-stock S&P CNX Nifty index closed flat at 2,807.05.

Banks fell on concerns of a further decline in credit growth and the possibility of a rise in non-performing assets in the next fiscal year. ICICI Bank dropped 4.5% to INR322.90 while State Bank of India slid 1.5% to INR953.55.

Among blue chips, engineering and construction company Larsen & Toubro fell 4% to INR585.10, Reliance Industries, the country's largest listed firm by market capitalization, lost 0.5% to INR1,338.55 after gaining 12 % over the previous five sessions.

Mortgage lender Housing Development Finance Corporation, which rose 1.6% to INR1,409.80, and Oil & Natural Gas Corporation, which gained 3.4% to INR755.05, helped the Sensex recoup some of its early losses.

Metal stocks rose tracking an overnight rally at the London Metal Exchange. Hindalco Industries jumped 5.7% to INR47.60, Tata Steel rose 1.7% to INR176.10 while Sterlite Industries gained 0.4% to INR315.65.

AUSTRALIA

Aussie stocks edged lower Friday, dragged down by financials and property stocks. Major miners and energy stocks limited losses after a strong rally in oil and metals prices overnight.

At the bell, the All Ords was down 11.4 to 3,405.4, while the ASX/200 shed 14 to 3,466.2. Over 724 million shares, or $1.7 billion had changed hands.

The Materials and Resources sector gained 2.4%. Rio Tinto clawed back some of Thursday's losses, adding 3%, while BHP Billiton also put on 3%.

Amongst other stocks, Lihir Gold was up 3.7 and Newcrest Mining was 3.1% higher. Bluescope and Sims were 2% and 3.9% higher, while Fortescue Metals ended 6% lower.

On the downside, James Hardie shed 4.7%, while Boral and Fletcher Building revesed early losses to gain 0.6% and 1.2% respectively.

Overnight, crude oil prices closed above US$50 a barrel, their highest level since November, helping the Energy sector add 0.6%. Woodside Petroleum rose 1.2%, while Origin and Santos were 1.4% and 1% higher. Oil Search lost 1.4%.

Arrow Energy fell 6.1%.

Banks and Financials sank 1.9%. Of the big four, Westpac, ANZ, NAB shed 0.2%, 1.4% and 1.9% respectively. CBA ended flat.

Macquarie Group, which has soared around 40% in the last week, was off 4.5%.

Among insurers, AXA Asia Pacific, AMP and QBE rose 0.8%, 4.2% and 6.2%. Suncorp-Metway gained 5.2%.

Property Trusts lost 5.3%. Stockland and GPT Group fell 9.9% and 32.6%. Westfield added 0.6%, while Mirvac shed 12.8%.

This morning, Mirvac said it would cut its full-year distribution by up to 40%.

Industrials stocks were trading 1.2% lower. Sector heavyweights Leighton and Toll were down 3.5% and 3.4%. Qantas was off 3.1%.

Brambles bucked the trend, adding 2.7%.

Consumer staples fell 2% with the majors Wesfarmers and Woolworths easing 2.5% and 1.7% respectively.

Lion Nathan slipped 1.2%, while rival Foster's shed 3%.

The Healthcare sector was down 1.9%. CSL and ResMed led the decline, dropping 2.5% and 5.7%.

NEW ZEALAND

New Zealand shares fell, snapping a five-day rally, after Nuplex Industries was forced to make a rights offer at a deep discount and doubts swirled about the wisdom of the Federal Reserve's decision to print more money.

The NZX 50 Index fell 34.183, or 1.3%, to 2599.026, the first decline since March 12. Within the index, 29 shares fell, 12 rose and nine were unchanged. Turnover was NZ$85.5 million.

Nuplex sank 52% to 51 cents. Shareholders will be offered the right to buy seven new shares for every one held at 23 cents apiece, raising NZ$132.8 million to repay debt after the company breached its loan covenants. It had initially sought to raise NZ$110 million.

Fisher & Paykel Appliances has tumbled 69% this year as its performance suffered with a downturn in the housing market in New Zealand and in export markets. It is contemplating a capital raising though Stephen Walker, head of asset management at Goldman Sachs JBWere, said it has property and other assets that can be turned into cash

Nuplex has dropped 52% this year. Fund managers participating as sub-underwriters demanded Nuplex allow the right to top up their holdings after the rights issue. Underwriter First NZ Capital has the right to require Nuplex to make a top-up placement of NZ$22.8 million, or 15% of the shares on issue, at 23 cents apiece for five days following the issue.

APN News & Media, publisher of the New Zealand Herald, was unchanged Friday at NZ$1.20 and joins Nuplex and FPA as the largest decliners this year, having fallen 61%.

Telecom Corp. fell 4.9% to NZ$2.33. A Commerce Commission report on back-haul routes, part of the deal that gives rivals access to Telecom's local loop, suggests competition on some routes hasn't eventuated as expected while some new routes may warrant inspection.

Rakon Ltd., which makes components for navigation systems and has access to plants in China, New Zealand and Europe, fell 4.7% to NZ$1.21. Fisher & Paykel Healthcare, regarded as relatively recession proof because it sells breathing aids into a market which has been rising, fell 4.4% to NZ$3.06.

The healthcare company gets 80% of its revenue in US Dollars and the kiwi has strengthened the past week, reaching 56 US cents earlier Friday and trading recently at 55.66 cents. It was at 50.51 cents on March 4.

ProvencoCadmus, the owner of the eftpos system used by Warehouse Group, rose 3.9% to 13.5 cents and has surged 136% in the past week. The company had no explanation in answer to a query from the NZX. The stock is still more than 60% down on its high point in the last year.

Volume Friday of 861,269 marks this as one of the five heaviest trading days this year, with Thursday also among the top 5.

NZ Farming Systems Uruguay rose 11% to 78 cents and PGG Wrightson gained 1.7% to NZ$1.22. Rural Portfolio Investments, the investment vehicle owned by Wrightson chairman Craig Norgate and the family of Baird McConnon, has made arrangements to fund NZ$42.5 million of preference shares that mature in April. RPI owns a controlling stake in Wrightson , which owns NZ farming Systems and reaps a management fee in profitable times.