Japan Tobacco shares rose 3.1% to close at 597,000 yen ($5,068) in Tokyo Friday, while shares in Gallaher bslipped 0.5% Friday to 1,149.5 pence.


7:30AM Asian stocks advanced on Friday supported by a strong finish in Japan.
Asian markets closed higher on Friday. Japanese Nikkei 225 Stock Index gained 0.5% to close at 16,914.31. The tankan sentiment index for large manufacturers advanced to 25, up one point from the September figures and matching expectations. Shares of Japan Tobacco advanced 3.1% after saying it has agreed in principle to buy British cigarette maker Gallaher Group in a deal standing at $14.8 billion.

The Hang Seng Index in Hong Kong advanced 1% to 19,110.65. IPO led the gainers. Neo Neon advanced 30% and China Communication Construction surged 38%. Mainland China oil producers gained as oil prices advanced after the OPEC announced it plans to reduce production. PetroChina added 1% and Sinopec gained 2%.

The Korea Composite Stock Price Index, or Kospi, in South Korea, moved 0.25% higher to 1,421.87. Kookmin Bank, the largest lender by assets in South Korea, gained 2% on foreign buying. Posco advanced 2.1% after reaching a new high during the session on expectations of higher dividends and positive earnings for next year.

Other markets around the region also gained with Australia S&P/ASX 200 rising 0.1% to 5,557.00. Singapore Straits Times Index rose 0.5% to 2,931.29 and Taiwan Weighted Price Index gained 0.8% to 7,538.82.


6:30AM European stocks advanced on Friday in quiet trading with M&A bids.
European markets gained on Friday. The FTSE 100 started the day 0.3% higher at 6,246, while the German Xetra Dax added 0.4% at 6,577.18 and the French CAC 40 advanced 0.5% to 5,534.64.

Corporate news

Japan Tobacco, the third-largest cigarette maker in the world, agreed to buy Gallaher in the biggest overseas takeover of the nation.

Advancers

Altadis SA led advancers as tobacco companies after Japan Tobacco Inc. agreed to buy Gallaher Group Plc for 7.5 billion pounds ($14.7 billion). Altadis, the largest tobacco company in Spain, added 1.1%. Citigroup Inc. upped a recommendation on the shares to `buy'' from hold, announcing the company is a possible target as takeovers in the industry continue.

Swedish Match AB, the second-largest producer of smokeless tobacco products in the world, advanced 0.8%.

France Telecom rose 1.9% after it reiterated its financial targets for 2006. Altana firmed 0.9% after Deutsche Bank upgraded the chemicals company to buy from hold and lifted its price target.

Carmakers were in great demand. Fiat rallied 2.6% after its European market share jumped to 7.6% from 6.5%. Renault SA gained 1.2 %. Porsche AG surged 1.2%. Separately, WestLB AG raised its recommendation to hold from reduce and lifted its price estimate for the shares by 27%.

Decliners

Ahold fell 1.1%, erasing some gains on Thursday, which were prompted by talk of a bid talk for the Dutch retailer from KKR, the private equity group. Sources close to KKR have played down the prospects of it making an offer.

Oil and gold

Crude oil for January delivery advanced 36 cents, or 0.6%, to $62.87 a barrel in after-hours electronic trading on the New York Mercantile Exchange. The contract traded at $62.72 a barrel in early trading in London.

Gold for immediate delivery was at $625.45 an ounce today. It is little changed this week, after dropping 3.2% last week.