In Europe on Tuesday, the FTSE Eurofirst 300 gained 0.13 percent higher to 1,218.06, its highest level at the close of a session since May of 2002.

The automobile manufacturing sector was up as analysts said the sector would grow by 22 percent in 2005, well ahead of its prediction at the beginning of the year that it would grow by 10 percent.

Porsche gained 2.3 percent to €685, Volkswagen was up 3.1 percent to €47.22, and BMW advanced by 2.5 percent to €37.89 after Goldman Sachs upgraded it on Monday from “in line” to “outperform”.

DaimlerChrysler gained 2 percent to €41.95 after it announced that it has averted a strike with Canadian workers by coming to agreement on a three-year deal on wages.

French insurer AGF gained 1.9 percent to €78.55 while it’s German parent company, Allianz, was up 0.8 percent to €106.19.

Meanwhile Danish company Moller Maersk, the largest container shipping company in the world, lost 3.1 percent to DKr65,400 on a ratings cut from “buy” to “reduce” from UBS. UBS also lowered the company’s target price from DKr70,000 to DKr60,000, warning that freight flows were slowing down even as capacity was rising.

Meanwhile in Germany, the Xetra Dax gained 0.8 percent on the day to 4,962.86 after sharp losses on Monday in the wake of the outcome of Sunday’s elections there.

The Tokyo equities markets were up substantially on the landslide election victory Sunday of Prime Minister Junichiro Kozumi’s Liberal Democratic party, as foreign investors seemed particularly enthusiastic in the post-election buying.

Upward revision of second-quarter gross domestic product figures also helped the markets to their gains. GDP growth was put at 0.8 percent in the second quarter, up from the original figures of 0.3 percent.

The Nikkei 225 was up 1.6 percent to 12,896.43, while the Topix index gained 1.3 percent to 1,309.80.

The LDP won 296 seats in the lower house of parliament, the first single-party majority there in 15 years. In addition the LDP’s coalition partner, the New Komeito party, won 31 seats, bringing administration-friendly seats to more than two-thirds of the lower house. Analysts say that this all but guarantees that the prime minister’s postal privatization bill will pass when it is reintroduced in the autumn.

Domestic sectors that figure to benefit the most from the recovery of the Japanese economy, which is expected to go forward after the election’s outcome, saw gains on the day.

Insurers gained the most on the day, with the sector rising by 3.9 percent. Other domestic sectors seeing advances included construction companies, which gained 1.8 percent; retailers, up 2 percent; real estate, which rose by 2.6 percent; and banking, which advanced by 2.8 percent. The biggest individual gainer came from the banking sector, when Mizuho gained 4.4 percent to ¥640,000.

Outside of the domestically-oriented sectors, the nation’s largest systems integrator, NTT Data, gained 8.4 percent to ¥424,000 on the expectation that it will experienced increased demand after post office privatization. Additionally, Yamada Denki, Japan’s largest discount electronics retailer, added 8.7 percent to ¥8,530.

In Europe on Wednesday, the FTSE Eurofirst 300 gained 0.3 percent to 1,205.03, its highest close in over three years, helped along by strength in the financial sectors.

Credit Agricole, France’s largest retail bank, gained 6 percent to €23.74 when its report that net profits were up by 23 percent, much more than had been expected.

The news prompted several agencies, including Deutsche Bank, WestLB, and Dresdner Kleinwort Wasserstein, to upgrade the stock Deutsche Bank also upgraded and increased its target price for UBS and Credit Suisse and also increased Commerzbank’s price target.

Commerzbank gained 2.4 percent to €22.21, while Credit Suisse also was up 2.4 percent, to SFr57.60 and UBS added 1.7 percent to SFr106.90.

Among reinsurers, UBS and Credit Suisse First Boston both upgraded Swiss Re, sending its stock up 2.4 percent to SFr82.50. Gains were also seen in technology sector, with STMicroelectronics up by 4.7 percent to €13.94, while Infineon gained 1.7 percent to €7.85, and ASML advanced by 0.9 percent to €13.76. There were some losers on the day. Accor, the hotels group, lost 2.7 percent to *42.33.

IT services group Atos Origin was down 2.4 percent to €59.75 even though its first half profits were up by 11 percent as it did not increase its full-year prediction. Brewer Heineken fell 0.5 percent to €26.87.

In Europe on Friday, the FTSE Eurofirst 300 saw losses on the day, falling by 0.1 percent to 1,183.95, but it gained 1.7 percent on the week.

Oil and construction were higher for the week, mainly in consideration of the damage caused by Hurricane Katrina in the Gulf Coast region of the United States.

Carmakers and reinsures saw losses for the week, however. The oil sector as a whole gained 4.2 percent to 1,438.33, with Finnish refiner Neste Oil up 13.3 percent to €27.90 on wider margins.

The construction sector was up 1.9 percent as it became clear that the storm-ravaged region will require extensive rebuilding after it is drained of water.

Reinsurers suffered as it became clear how much money in claims they would have to pay out to victims of Katrina. Munich Re and Swiss Re each estimated that their payouts could be in the neighborhood of $500 million. Munich Re lost 1.3 percent on the week to €90.02, while Swiss Re was down 1.4 percent on the day and lost 2.7 percent for the week to €79.85.

Zurich Financial SVS declined by 2.3 on the week to SFr215.60. Hannover Re reduced its profits estimate for the year by one-third.

Meanwhile, in the automobile manufacturing sector, high gasoline prices and a generally weaker dollar sent Porsche down 2 percent to €625.85, while DaimlerChrysler lost 3.2 percent to €40.60.

The FTSE Eurofirst 300 saw gains for the second straight day on Thursday, rising by 0.7 percent to 1,185.83.

Builders were the big winners of the day as it become clear just how much reconstruction will be necessary on the Gulf Coast of the United States in the wake of Hurricane Katrina, and shares in insurers and reinsures moved little as it was still unclear exactly how much that rebuilding will cost.

Builders and building materials suppliers in Europe benefited from the impression that US companies will be unable to provide all the materials needed for the recovery effort. The world’s biggest cement maker, Lafarge, gained 2.9 percent to €77.20.

Lafarge already does over half of its business in the US. Elsewhere in the sector, Holcim was up 1 percent to SFr82. Spanish builder ACS added 3 percent to €25.08 on a strong report of first-half profits due to its participation in the Spanish building boom and expansion into industrial services.

Insurers and reinsures were mixed as analysts said that any estimates of the monetary damages caused by Katrina were sheer speculation, considering that many areas were still inaccessible.

Swiss Re was up by 0.3 percent to SFr81 and Munich Re gained 0.1 percent to €90.90, but Hannover Re lost 1 percent to €28.82. The biggest loser of the day was Deutsche Post, which dropped 3.9 on the day to €19.65 amid heavy trading after it was revealed that it had made a bid to purchase Exel, the British logistics group.

Another 1995 spinoff from the former Bundespost, Deutsche Postbank saw an advance on the day, adding 3.5 percent to €46.01 as JP Morgan raised its target price to €40 per share from €32.

The London equities exchanges were up on Thursday, with the FTSE 100 seeing a gain of 0.6 percent to 5,328.5 and the FTSE 250 rising by 0.6 as well, to an all-time high of 7,798.5. Trading amounted to a total of 2.9 billion shares.

Part of the gains can be accounted for by a rise of 17.3 percent by logistics group Exel after it confirmed that it had received a bid from Deutsche Post.

At least one analyst anticipated that there would be counter bids for the company, possibly from US company UPS, which has considered bidding for Exel in the past.

Other companies in the transport sector benefited from the speculation, with TDG adding 3.1 percent to 236p and Wincanton gaining 6.2 percent to 288¼p.

Insurers again were down as the damage done by Hurricane Katrina grew more obvious. Wellington Underwriting lost 4.5 percent to 101¾p, Catlin declined by 4.1 percent to 439½p, Amlin was down 2.9 percent to 177p, and Brit Insurance dropped 2.8 percent to 87½p.

On the other hand, companies that stand to benefit from rebuilding after the storm saw their shares gain in value. Aggreko, the temporary power generator, was up by 7.5 percent to 225p and Ashtead gained 7 percent to 130½p. The world’s biggest distributor of plumbing supplies, Wolseley, was up 2.8 percent to £11.59.

The New York equities markets were up on Wednesday despite bad news from the area affected by Hurricane Katrina as well as economic news that showed economic growth up less than expected in the second quarter and data showing the manufacturing sector contracting for the first time in two years in August.

Higher oil prices were blamed for the negative economic data. The Dow Jones Industrial Average gained 0.7 percent to 10,484.52, the Nasdaq composite added 1.1 percent to 2,152.09, and the S&P 500 was up by 1 percent to 1,220.31. The S&P energy index gained 2.6 percent, while its insurance index was flat due to worries centered around the amount of damage caused by Katrina.

Insurer Allstate lost 0.8 percent on the day to $56.21, and it has lost nearly 4 percent since the hurricane made landfall on Monday. In contrast American Insurance Group was up 0.1 percent to $59.04.

In the energy sector TransOcean was up 2.6 percent to $59.04, Sunoco gained 5.6 percent to $72.61, and Valero Energy advanced by 10 percent to $106.50.

In the healthcare sector, hospital operator Tenet Healthcare lost 3.8 percent to $12.18 when it said it had closed six facilities because of the effect of Hurricane Katrina.

In more positive territory, luxury jewelry retailer Tiffany gained 12.3 percent to $37.42 on the announcement that its earnings were better than expected in the quarter and that it had raised its guidance for the full year.

The effects of Hurricane Katrina began to be felt on the New York equities markets on Tuesday, a combination of soaring oil prices, news of damage to the infrastructure in the areas affected that will cost insurers billions of dollars, and closures of retailers in the region hit by the storm.

Not even a report of increased consumer confidence in August helped much. The Dow Jones Industrial Average fell 0.5 percent on the day to close at 10,412.82, the Nasdaq composite lost 0.4 percent to 2,129, and the S&P 500 closed down 0.3 percent to 1,208.41.

All areas of the transport sector felt the effect of high oil prices. Delta Airlines, which was already near bankruptcy, lost 5.5 percent to $1.20 as the Amex airline index fell 3 percent to 46.75.

Ground transport was not immune either, as United Parcel Service fell 1.1 percent to $70.42 and rail freight company CSX declined by 1.7 percent to $44.85.

Insurers and reinsures dropped as damage estimates in the hurricane zone rose. Hartford Financial Services lost nearly 0.3 percent to $73.15, while American International Group declined by 0.4 percent to $59.28. Retailers and restaurants were down on the day, with many of them suffering closures in the storm-affected areas.

Wal-Mart lost 1 percent to $45.19 after it said that 123 of its stores had been closed due to the hurricane. Jewelry retailer Tiffany lost 2.6 percent to $33.31. Office supply chain Staples lost 2.9 percent to $21.85.

The oil sector, on the other hand saw substantial gains. Refiner ConocoPhillips was up 2.1 percent to $64.41, while oilfield services company Halliburton saw the value of its shares rise 3.5 percent to $59.84.

In Europe on Tuesday, insurers saw slight gains on hopes that the damage from Hurricane Katrina would not be as extensive and as costly as feared, while oil companies saw the value of their stocks rise with the gains in crude oil prices.

Meanwhile, construction companies saw mixed results. The FTSE Eurofirst 300 was down by 0.04 percent to 1,166.94. In the insurance sector, reinsurer Munich Re put its estimate of Katrina’s damage at between $15 billion and $20 billion in insured loss, and said that it did not see the hurricane’s effects as any reason to alter its 2005 earnings forecast. Munich Re gained 0.3 percent to €91. Meanwhile, Hannover Re gained 0.7 percent to €29.90.

In the oil and gas sector, prices that hit new record highs outweighed the known and possible damage to production facilities in the area affected by Katrina to send share prices higher. Repsol YPF was up 0.4 percent to €23.37, while Total gained 0.6 percent to €207.80 and Royal Dutch Shell added 1 percent to €25.99.

In the construction sector, Irish building materials group CRH dropped 2.8 percent to €21.65 despite having reported a 20 percent rise in pre-tax profits. On the other hand, Spanish builders did better. Acciona saw a 2.5 percent gain to €89.40 on its report that first-half profits were up by 37 percent, while ACS, Spain’s largest construction group, was up 1.7 percent to €24.10 in anticipation of the release of its first-half results on Wednesday.

In European equities markets on Monday, stocks rose after a full week of losses last week as the FTSE Eurofirst 300 ended the day up 0.3 percent to 1,167.43, in the absence of trading of 76 UK stocks because of the UK bank holiday.

The oil sector was mixed on the day, with Hurricane Katrina to blame. Smaller oil companies were mainly up, with Austrian company OMV up 2.7 percent to €43.70, while Saipem of Italy added 1.7 percent to €13.17.

However some larger oil companies, and especially those with operations in the Gulf of Mexico, sustained losses due to production halts and the uncertainty over whether or not their facilities would sustain damage from the storm. Royal Dutch Shell lost 0.1 percent to €26.79. Despite the storm Total, the French oil company, managed to gain 0.4 percent to €206.60.

The airlines and automobile manufacturing sectors saw losses due to rising oil prices. Lufthansa fell 0.1 percent to €10.74 and Ryanair declined by 0.6 percent to €6.55.

Tui, out of Germany, managed to overcome the news of higher oil prices to gain 1.2 percent to €19.28 on its announcement that it was thinking about raising fuel surcharges this winter.

In the auto sector Volkswagen was one of the few stocks to avoid losses, avoiding movement at all to stay at €42.91. Elsewhere, Renault lost 0.6 percent to €71.55, while Peugeot and Porsche each fell by 0.2 percent, to €50.60 and €637.63 respectively.

Insurers also had a bad day as losses due to Hurricane Katrina were being projected to possibly rise as high as $25 billion if it hit major population centers.

Primary insurers did badly enough, with Zurich Financial falling as far as SFr215.20 before ending the day up by only 0.1 percent to SFr220.70 and ING losing 0.3 percent to €23.18. Reinsurers did even worse. Swiss Re fell 0.4 percent to SFr81.65, Munich Re lost 0.5 percent to €90.73, and Hannover Re declined by 0.8 percent to €29.70.

The FTSE Eurofirst 300 saw five straight days of losses during the week, and ended the day Friday down by 2.5 percent from its starting point on Monday.

The oil sector saw mostly negative results despite a rise of 1 percent in crude oil prices for the week.

The exception was OMV, listed in Vienna, which gained 9.6 percent on the week to €42.63 to rate as the biggest advance during the week on the Eurofirst.

This rise came on an unexpectedly healthy rise in profits in the second quarter, brought about by good refining margins and a Romanian acquisition.

Elsewhere in the sector, the results were not so good. Eni dropped 2.9 percent to €23.22, while Repsol YPF lost 2.8 percent to €23.17 and France’s Total declined by 2.2 percent to €205.70.

In the automobile manufacturing sector, while Fiat lost 3.9 percent on Friday to end the week at €7.08, it still managed to post a gain of 0.7 percent for the week.

Most of the week’s gains for the carmaker came from heavy sales ahead of a loan conversion that could leave the banks that extended the loans owning more of the company than is held by the company’s founding family.

It was rumored that most of that buying had been done by the family’s holding company to limit how much the stock will be diluted by the conversion.

Reinsurer Swiss Re gained 2.8 percent on Friday, the best performance of the day, to SFr82, and notched a 1.9 percent gain on the week.

Japanese equities markets were up on Monday morning, as the Nikkei 225 gained 0.8 percent to 12,390.66 and the Topix index rose by 0.9 percent to 1,261.21 on continuing optimism about the direction of the economy and as investors bought into domestically-oriented companies.

Sanrio, the maker of the Hello Kitty brand was up 3.5 percent to ¥1,182 on a positive quarterly earnings report.

The oil sector advanced on higher crude oil prices but those same high prices did not seem to bother companies that use a lot of oil. Nippon Oil, Japan’s largest distributor of oil, gained 1.1 percent to ¥858, which Japan’s largest shipper, Nippon Yusen, gained 0.6 percent. The sea transport sector as a whole was up 1.4 percent, and stocks in air transport companies gained 0.7 percent.

Banking, insurance, and real estate were also up, with the banking sector as a whole up 2.4 percent, while real estate and insurance each rose by 1.2 percent.

Online broker Monex Beans added 3.9 percent to ¥133,000. Japan’s largest banking group, Mizuho, gained 3.6 percent to ¥580,000, and insurer NipponKoa was up by 1 percent to ¥793.

In European equities markets on Thursday, oil stocks were down on falling oil prices and concerns that if energy costs remain high they could cause the economy to slow.

The FTSE Eurofirst 300 fell 0.3 percent to 1,182.38 at the close of the trading day.

While still very high, oil prices hit their lowest level in two weeks. In reaction OMV, the Austrian oil company, declined by 4.3 percent to €37.86, Italy’s Eni lost 1.3 percent to €23.40, French oil company Total fell 1.2 percent to €206.90, and Neste Oil of Finland dropped 0.8 percent to €23.81.

High oil prices were not just responsible for declines in the oil sector, though. They were said to be at least partially to blame for Ciba Specialty Chemicals’ 20 percent decline in second-quarter net profits to SFr79 million.

While those results were better than had been expected, the chemicals company cut its outlook for the full year. The news sent shares in the company down 2.5 percent on the day to SFr7.00.

Insurers were also down on the day. Zurich Financial fell on profit-taking after announcing a 21 percent rise in net profits in the second quarter, a better result than expected. Shares in the company fell 1.5 percent on the day to SFr231, but are still up 24 percent since the beginning of the year.

Elsewhere in the sector, German insurer Allianz lost 1.2 percent to €107.45, while French company AXA declined by 0.5 percent to €22.35.

In London on Wednesday, the equities markets saw their fifth day in a row of negative figures at the close of trade as the Bank of England released the minutes from the most recent meeting of the Bank of England’s monetary policy committee.

The banking and insurance sectors took the implication of the report, that there would not be another interest rate cut soon, especially badly. Overall, the FTSE 100 lost 0.6 percent to close at 5,292.7, while the FTSE 250 declined by 0.6 percent as well, to 7,654.5 at the close. In banking and insurance, Royal Sun Alliance was down 2.3 percent to 94 ¼p, Barclays lost 2.1 percent to 563p, Aviva declined by 2.4 percent to 621 ½p, and Prudential fell 1.7 percent to 514 ½p.

The telecommunications sector did somewhat better as Vodafone gained 0.7 percent to 151 p, BT added 1.8 percent to 220 ¾p, O2 added 2.8 percent to 146 ¾p, and Colt-Telecom gained 3.7 percent to 62 ½p.

The airline sector was mixed. British Airways fell 2 percent to 385 ¾p as its labor dispute continued. EasyJet, however, was up 1.3 percent to 299p after it announced it would save £10 million for the year as a result of a 10-year maintenance deal with Swiss firm SR Technics worth $1 billion.

Mining companies were down for the second day in a row as copper prices continued to fall. BHP Billiton lost 2.9 percent to 813p, Anglo American declined by 2.8 percent to £14.11, Rio Tinto fell 2.6 percent to £19.85, while Antofagasta dropped 1.8 percent to £14.04.

In London on Tuesday, the FTSE 100 lost 0.4 percent to 5,322.3 and the FTSE 250 was down 0.1 percent to 7,697.0 on a volume of 2.8 billion shares traded.

The biggest loser of the day on the FTSE 100 was Cable and Wireless, on concerns that it is paying too much for Energis, its smaller rival.

Meanwhile, elsewhere in the telecommunications sector, O2 lost 2.6 percent to 142 ¾p after it was confirmed that Deutsche Telekom and KPN would not bid for the mobile phone group. It was a surprise to some analysts that O2 was up after the announcement, as speculation on a possible merger had been driving its gains since the beginning of the year.

Logistics group Exel gained 0.9 percent to 995 ½p on rumors that a bid for the company would come soon. Gains had been higher earlier in the day, but slipped back as the talk diminished during the session UPS and Deutsche Post have both been mentioned as being interested in Exel.

Insurer Royal & Sun Alliance also benefited from rumors of a bid on the company, gaining 4 percent to 96 ½p, the best performance on the FTSE 100 on the day.

The London equities markets were down on Thursday as insurance companies fell on warnings weak margins. The FTSE 100 fell 0.4 percent to 5,358.6, while the FTSE 250 lost 0.5 percent to 7,695.3 on a volume of 2.7 billion shares traded.

Aviva, the UK’s biggest insurance company, was down by 2 percent to 644p even though it reported results at the high end of expectations, as it issued a warning that margins in the UK life insurance sector were weak and as analysts said that the company was feeling some pressure to increase volume.

Royal & Sun Alliance fell even more, by 2.1 percent, to 92p as profit taking followed interim earnings results that met expectations. Elsewhere in the sector, Prudential lost 2.2 percent to 525p and Legal & General declined by 1.1 percent to 110 ½p.

In other sectors, British Airways was down 1.3 percent to 292 ¼p after it had to suspend check-ins at Heathrow in a dispute between the air carrier and a caterer.

Defense group BAE Systems gained 1 percent to 332p on an upgrade to “buy” from Dresdner Kleinwort Wasserstein. More than 81 million shares in BAE were traded when Morgan Stanley placed over 30 million shares at 325 per share.

The mobile phone sector was higher after Morgan Stanley advised investors to put their money in Vodafone and O2 rather than in fixed-line company BT Group. O2 gained 0.9 percent to 145 ½p and Vodafone was up 0.5 percent to 147 ¾p.

In Tokyo on Thursday, the equities markets closed at four-year highs on continuing indications that the economy was continuing its recovery.

The Nikkei and Topix indexes were both higher for the fourth day in a row as the Nikkei 225 ended the session up 1.37 percent at 12,226.32 and the Topix added 1.29 percent to 1,243.74.

Insurance, banks, and securities brokers were all up on the day. The insurance sub-index on the Tokyo Stock Exchange gained 6.3 percent as Mitsui Sumitomo Insurance gained 8.8 percent to ¥1,147 on strong income in their first quarter.

Sompo Japan added 8 percent to ¥1,210 and Nippon Koa was up 3.3 percent to ¥777. All saw strong interest from foreign investors.

The banking sub-index saw a 3.7 percent rise on the day. SMFG was up 6.6 percent to ¥812,000, MTFG gained 3.5 percent to ¥1,010,000, while Mizuho Financial Group added 3.1 percent to ¥531,000.

The securities sub-index was up 3.7 percent. Diawa Securities gained 1.6 percent to ¥722, Nomura Securities, Japan’s largest broker, was up 2.7 percent to ¥1,460, and Nikko Cordial rose by 4 percent to ¥542 as it announced plans to return 50 percent of its annual recurring profits as dividends.

New gains in crude oil prices sent the oil and coal sub-index up 3.2 percent. Nippon Oil gained 4.7 percent to ¥873, while Inpex added 3 percent to ¥851,000.

The London equities markets closed in positive territory on Wednesday as the FTSE 100 gained 0.3 percent to 5,377.5 and the FTSE 250 was up 0.4 percent to 7,734.6 on a volume of 2.8 billion shares traded.

Life assurers saw advances in share value. South Africa-based life assurers Old Mutual gained 2.5 percent to 134p on better-than expected first half results and a forecast that its strong performance will last through the year.

Aviv was up as well, by 2.2 percent to 657p, ahead of its first-half report and on confirmation that Lord Sharman was coming aboard as its new chairman.

Mobile phone company Vodafone gained 0.3 percent on the day to 147p on an assessment by Dresdner Kleinwort Wasserstein that investors were not taking note of rising valuations of Japanese companies and the improvement in Vodafone’s operations in Japan.

Banks didn’t do as well, as Lloyds TSB lost 1.8 percent to 474p, Royal Bank of Scotland dropped 0.9 percent to £16.05, and HBOS was down 0.7 percent to 903 ½p.

Other FTSE 100 decliners included oil company BP, which lost 0.8 percent to 653 ½p, pharmaceutical company AstraZeneca, which was down by 0.7 percent to £25.90, and mining company Rio Tinto, which dropped 0.8 percent to £20.32.

Record label EMI, however, gained 3 percent to 254 ¼p on the news that it is in discussions to purchase New York-based independent label Wind-Up Records, which records Creed and Evanescence. The proposed purchase prices is said to be $125 million.

The FTSE 100 gained 29.6 points to 5,344.3 and the FTSE 250 lost 6.6 points to 7,673.9 in a mixed day on the London equities markets. Volume was 2.9 billion shares, helped by share placings by several mid-cap companies.

The oil sector was higher on crude oil price gains. BP was up 1.9 percent to 649 ½p. BHP Billiton also gained 1.9 percent to close at 840p.

In the banking sector, Standard Chartered added 7.6 percent to £12.11, an all-time high based on better than predicted interim results, an acquisition of Korea First, a South Korean bank, as well as on speculation that US banking group Citigroup might be interested in bidding for Standard Chartered.

Barclays gained 1 percent to 582p on an upgrade to “buy” and a raised target price of 640p per share from Deutsche Bank. Royal Bank of Scotland, however, lost 1.6 percent to £16.22 on a lowered earnings estimate for 2006 and 2007 by ABN Amro.

Life assurance company Prudential gained 0.5 percent to 524 ¼p after Credit Suisse First Boston increased its price target to 560p.

Meanwhile, telecommunications equipment manufacturer Marconi gained 14.7 percent to 306 ¼p when it said it was involved in talks with Huawei Technologies of China, a privately owned company, on a number of issues.

Four bombs were detonated at four different points in London’s transportation system during the morning rush hour on Thursday, leaving a reported 37 dead and more than 700 wounded. The attacks are being investigated as terrorist acts. A group claiming links to Al-Qaeda claimed responsibility for the attacks and warned Italy and Denmark to withdraw their military forces from the Middle East. The claim, which one police official said had not been determined to be real, appeared on an Islamist website. Prime Minister Tony Blair, who left the G8 meeting in Scotland to deal with attacks, declared the intent of the British people to preserve their way of life and their values in the wake of the attacks.

The repercussions of the attacks on equities markets ranged far and wide. In London the FTSE 100 ended the day down 1.4 percent at 5,158.3 after a 4 percent drop earlier in the day. The FTSE 250 closed down 1.4 percent at 7,387.9. The volume of shares traded on the day was much higher than average at 4.6 billion shares. The news of the attacks in London prompted a broad-based sell-off, but by afternoon more limited losses in New York and the expectation that the attacks might prompt the Bank of England to cut interest rates helped the equities markets to recover somewhat from what had been a traumatic day. Analysts praised the resilience of the London markets and predicted that within a week they would be higher than current levels.

Almost all stocks on the FTSE 100 were lower on the day. Among those feeling the most effect from the bombings were travel-related sectors. Air carriers and cruise lines were down, as were hotel groups. British Airways lost 4.2 percent to 260 ¾p and EasyJet fell 3.8 percent to 254 ¼p, while airport operator BAA declined by 3.2 percent to 599p. Cruise operator Carnival fell 2.2 percent to £31.59. Hilton lost 3.3 percent to 288 ¼p, while InterContinental Hotels was down 2.8 percent to 701 ½p. Shares in companies touching on bus and train transport were down as well.

National Express, which bought the London bus division of Tellings Golden Miller just last month, lost 3.3 percent to 880p, while bus and train operator Go-Ahead Group was down 2.4 percent to £12.48. First Choice Holidays initially fell by 8.2 percent but recovered by the end of the day to a loss of 2.9 percent at 187 ¼p. Leisure companies with significant holdings in London also fell sharply. Ubrium, the nightclub operator, lost 4.3 percent to 770p, while Caffe Nero, the coffee shop operator, was down 2.9 percent to 187 ¼p.

Another sector seeing significant losses in the London markets was the insurance sector. Those firms had recovered much of their losses by the end of the day, however. Aviva closed down 2.2 percent at 611p after having fallen to 585p earlier. Prudential fell to 482½p before recovering to 502 ¼p at the close of trade, a decline of 1.9 percent. Gainers were few in London, and included pharmaceutical group Shine, which rose 0.2 percent to 620p, and Quadnetics Group, which supplies CCTV and video systems to London Transport. Shares in Quadnetics rose 1 percent to 242 ½p.

In the eurozone, the FTSE Eurofirst 300 saw an up and down day much like that in the London markets. The Eurofirst was down by 1.9 percent to 1,135.6 late in the trading day, but it had fallen as far as 1,107.49 earlier, down 4.3 percent. Again, the leisure and insurance sectors were the hardest hit, especially airline and travel stocks.

Tui, the world’s biggest travel agency, lost 2.3 percent to €20.59 even though a company officials said that it does not believe Thursday’s terrorist attacks in London will have a long-term effect on travel bookings. In the air travel sector, Lufthansa lost 2.3 percent to €9.95, Air France-KLM was down 1.3 percent to *12.42, Sweden’s SAS fell 1.5 percent to SKr64.25, and RyanAir lost 2.3 percent to *6.32.

European insurers were also down, with life insurers Aegon dropping 1.8 percent to €10.76 and Alleanza falling 2.7 percent to €8.77. Reinsurers did even worse, with Munich Re, the world’s largest reinsurer, lost 2.4 percent to €87, even though it said it was not affected by the attacks in London. Other reinsures were down between 1.9 percent and 4.1 percent.

Energy stocks in the eurozone were down after the price of crude oil initially hit record highs after the attacks but subsequently fell by more than $5 per barrel on concerns about the impact of the attacks on air travel and economic growth. Royal Dutch was down 2.7 percent to €54.90, Norsk Hydro lost 2.9 percent to NKr619.50, and Statoil fell 2.1 percent to NKr140.50. Crude oil prices recovered most of those losses later in the day but still ended the day down.

US stocks initially dropped on the news of the London bombings, but then recovered as European stocks recovered some of their early losses as the day progressed. The Dow Jones Industrial Average, S&P 500, and Nasdaq all ended the trading day in positive territory. The DIJA gained 0.3 percent to close at 10,302.29, the S&P 500 was up fractionally to 1,197.86, while the Nasdaq composite also gained 0.3 percent to close at 2,075.66. Early declines on the New York exchanges were about half of those experienced after the March 11, 2004 terrorist attacks in Madrid.

Another factor in the late recovery in New York involved the weekly report on first-time jobless claims in the US, which came in at just about the level expected. Still, as in London and in Europe, airlines and other travel-related stocks fell on the day. Delta Air Lines closed down 2.9 percent at $3.38, after recovering from a 10 percent drop in pre-opening trade. Meanwhile, Marriott International was off by 0.4 percent to $68.59.

The price of government bonds around the world surged, and yields fell, as investors looked for safe places to put their money after the events in London on Thursday morning.

In the UK, the 10-year gilt lost 8.3 basis points to yield 4.199percent at the close of trade. Earlier, yields on the 10-year gilt had fallen to a two-year low of 4.12 percent.

In the US, the 10-year Treasury bond was down, although not as much, losing 2.5 basis points to yield 4.049 percent, after falling to a yield of 3.96 percent earlier in the day. In the eurozone, the 10-year German Bund registered a loss of 3.6 basis points to yield 3.175 percent after bouncing back from an all-time low of 3.08 percent.

Trade was heaving at 1.4 million contracts in the eurozone. Some analysts said that as long as confidence remains high in Europe, the London attacks will not have an effect on the overall economic outlook for Europe.