1:30PM New York, 5:30 PM London – Russia and Germany led the gainers in the region in 2007.

Banks in UK fell after the Nationwide Building Society reported a drop in housing prices, for the second month in a row. December home prices fell 0.5% from November to 182,080 pounds but rose 4.8% from a year ago. Home prices fell 0.8% in November from October month.

Alliance Leicester, Barclays, and Schroders lost more than 1%.

Of the 102 stocks in the FTSE 100 index, 39 declined, 57 rose, and 6 were unchanged.

Schroders led the decliners in the FTSE 100 index with a loss of 2.5% followed by losses in BT Group of 2.2%, in Standard Life of 1.8%, and in Severn Trent of 1.45%. Tesco, Rexam, SABMiller, and International Power lost more than 1%.

Cairn Energy led the gainers in the index with a rise of 3% followed by increases in Reed Elsevier of 2%, in BSkyB of 1.5%, and in Persimmon of 1.33%. British Energy, Smiths Group, and Land Securities added more than 1%.

In Paris trading stock changed a little ahead of the holiday weekend, however Alcatel-Lucent fell nearly 3% to 4.99 euros.

Air France –KLM rose 1.6% or 38 cents to 23.85 euros after the Italian finance minister named the carrier as preferred partner for the sale of Alitalia.

France’s national statistics office Insee reported that economy in the third quarter rose at 0.8% from the second quarter after rising at 0.3% in the second quarter. Consumer spending in the third quarter rose at 0.8% and corporate investment increased at 1.1%.

In German trading DAX index rose 0.4% led by a rise in Alliaz, Bayer, and Deutsche Boerse. The German market will reopen next year after short trading hours today.

DAX index has led other markets in western European region with a rise of 22%.

MAN AG rose 2.40 euros or 2.2% to close at 113.80 euros and Siemens AG advanced 41 cents to 0.34% to close at 108.86 euros.

Air Berlin Plc, the third largest discount carrier in Europe said that Deutsche Bank has added to its stake in the carrier and lifted it to 15.02% from 14.25%. Volatile stock of the airline has lost nearly 25% in 2007 on rising fuel cost and growing competition in the region.

In London FTSE 100 Index closed lower 30.90 or 0.48% to 6,466.90, in Paris CAC 40 Index decreased 0.23 or 0.004% to close at 5,627.25, and in Frankfurt DAX index also increased 28.72 or 0.36% to close at 8,067.32. In Zurich trading SMI lower 33.73 or 0.40% to close at 8,484.46.

Russia’s Micex index declined 1% to 1,888.86 but managed to gain 12% for the year. RTS Index dropped 0.1% to 2,290.51 and for the year rose 27.3%.

12:00PM New York, 5:00PM London – Alitalia may be sold to Air France –KLM thorugh stock swap according to Italian finance minister.

ING has agreed to sell its reinsurance division in the U.S. to Berkshire Hathaway Inc.

After months of negotiations and bids withdrawal Italian Finance Minister Tommaso Padoa said today that his ministry and the government favors Air France-KLM for the sale of Alitalia.

The finance ministry holds 49.9% in the airline. Air France has offered to purchase the stake with its shares and valued the airline at half the current market value to 486 million euros or $720 million. The lack of cash in the deal shows the Aliltalia’s weakness in the market.