* Nokia reports profit, expects market fall
* UK mortgage fix expected
* Oil hits record above $115 per barrel

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Nokia the world's biggest maker of mobile phones, expects the mobile market
to fall in euro terms this year, knocking nearly 10 percent off its shares.
The company reported underlying first-quarter profit rose as expected, but a
bigger-than-expected fall in its average selling price for phones also weighed
on the stock. Nokia, which has a strong lead in emerging markets including
China and India, sold 115.5 million phones in the quarter, up 27 percent from
a year earlier, and more than its three closest rivals combined.

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Meanwhile, pressure has been growing on the British government and the Bank
of England to do more to resolve a mortgage debt crisis that is threatening to
slam the brakes on the British economy and a plan may be announced as soon as
next week. News of possible swift action lifted sterling and boosted bank
shares. Banks' fear that high-risk mortgage debt is lurking on balance sheets
has driven the interest rates at which they lend to each other well above the
BoE's 5 percent benchmark, in turn raising borrowing costs for households and
companies. The new plan is expected to allow banks to temporarily swap
mortgage-backed securities for government bonds to help free up their balance
sheets and allow them to lend more to consumers.
   
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Nokia was the main drag on the markets but some European indices were in
positive territory in afternoon trade. The FTSEurofirst index was down around
a quarter of a percent in afternoon trade as U.S. weekly jobless data and bad
news from Merril Lynch  weighed on the index.

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Oil set a record high above $115 a barrel as a drop in U.S. gasoline
inventories raised concern of tighter supply.  Oil has hit new peaks for three
consecutive days.

Stefanie McIntyre, Reuters