UK interest rates slashed to 3%

The Bank of England has cut interest rates in the UK by one-and-a-half percentage points to 3%, its lowest since 1955, in a shock move.
Last month it cut rates from 5% to 4.5% in an emergency move co-ordinated with other central banks.
There had been widespread calls from industry for a major cut as the country begins to face up to the prospect of a deep recession.
It is the most dramatic cut since a two percentage point reduction in 1981.

Read more at BBC

Funds sell record Rs22,271 crore of debt in Oct

Mumbai: Indian mutual funds sold debt worth Rs22,271 crore in the first three weeks of October because investors are reluctant to infuse fresh money to replenish outflows caused by a surge of redemptions in a volatile market.

Analysts say the measures taken by the Reserve Bank of India (RBI) to ease a cash and credit crunch will take time to soothe the Rs5.29 trillion mutual fund industry, but inflows should return soon with the overnight inter-bank money market rate declining to around 6.5% from around 20% at the peak.
Higher call rates encourage investors in debt funds, particularly banks, to withdraw money from mutual funds and lend in the overnight call money market to earn more.
RBI has cut its policy rate by 100 basis points and banks’ cash reserve ratio (CRR), or the proportion of deposits that banks need to keep with the central bank, by 250 basis points to release Rs1 trillion into the banking system. One basis point is one-hundredth of a percentage point. Besides, it also created a Rs20,000 crore liquidity window for mutual funds.
So far, mutual funds have drawn only Rs8,800 crore from this window. On Friday, there was no taker.

Read more at Livemint

Norway fund to put $2 bn in India

New Delhi: In a move that will bring considerable relief to Indian equity markets roiled by the global credit crisis, the Norwegian sovereign wealth fund (SWF), plans to invest around $2 billion (about Rs9,772 crore) in India, primarily in equities, over the next two months because it has increased India’s weightage in its investment portfolio.
According to Thorvald Moe, deputy secretary general in the Norwegian finance ministry, India’s weightage was enhanced recently to 0.94% from the earlier 0.2%. The enhanced weightage will see an inflow into India of around $2 billion, which needs to be invested by the end of this year, Moe said.
This money will come into the country at a time when foreign institutional investors (FIIs), the main driver of Indian stock markets, have taken out close to $11.2 billion from the country since January.
In this period, Sensex, the benchmark index of the Bombay Stock Exchange has fallen by almost 50% to 10,683.39, the level it closed at on Tuesday.

Read more at Livemint

Markets offer early warning signals

India now has the distinction of being one of the rare countries to introduce new derivatives markets this year, at a time when most countries are clamping down with bans or more regulations.

Derivatives, especially the exotic kinds, have become a bad name across the world. India, too, has had its share of problems with over-the-counter (OTC) forex derivatives. One good outcome of all this is that the case for exchange-traded derivatives has only become stronger vis-a-vis OTC markets. It has become increasingly clearer to more policymakers and market participants that wherever standardization is possible, a derivatives contract must be listed on an exchange to avail of the benefits of transparency and the elimination of credit risk through centralized clearing and settlement.

Read more at Livemint

Global air traffic dips 2.9% in September: IATA

Early signs of global air travel slowing down are evident from a recent IATA (International Air Transport Association) report which says that air travel across the globe has dipped 2.9% for September 2008, as compared to previous month. However, IATA has taken up the issue with various governments on finding a solution to this grim scenario. Over 230 airlines from across the globe are members of the IATA, a trade body that deals with air traffic related issues.
Taking a peek at the traffic slowdown figures revealed by IATA, African carriers posted the largest decline in traffic at -7.8%, followed by Asia-Pacific carriers with a 6.8% drop in the month under preview (September) and European carriers saw a traffic drop of -0.5%.

Read more at The Financial Express

HDFC-HDFC Bank merger possible: Parekh

Deepak Parekh, chairman, Housing Development Finance Corporation (HDFC) has indicated a possible merger of HDFC-HDFC Bank in near future. However, he did not elaborate his statement on such a proposed move, while responding to a question asked by industrialist Anand Piramal at an event held at Indian Merchants Chamber in Mumbai on Tuesday.
Parekh also said that inflation in India might settle down at 6-7% levels by March 2009. He expects the inflation to fall below the 10%-mark within a month and the country’s growth rate to remain at 7-7.5% in the current fiscal.
“We will wait-and-watch for some time before taking a final call on the interest rates. The deposit rates in the system have to come down first before cutting the lending rates. And, I do not rule out the possibility of more monetary measures being implemented by the Reserve Bank of India,”Parekh added.

Read more at The Financial Express

Centre sets aside 2 million tonne wheat to meet export requests

The government on Wednesday decided to set aside around 2.0 million tonne of wheat for export, to meet requests made through diplomatic channels. This is the first time in more than a year that the government has gone for a one-off exemption to the country’s export ban on wheat.
“We have kept aside two million tonne wheat for supplies to some countries,” agriculture minister Sharad Pawar told reporters on the sidelines of an international conference here.
The external affairs ministry will decide on quantities to be supplied to countries that have requested India for wheat, Pawar said. Requests will be considered on humanitarian grounds.

Read more at The Financial Express

Is Apple getting into the chip business?

SAN FRANCISCO (MarketWatch) -- A brewing battle between Apple Inc. and its frenemy, IBM Corp., over the role of an executive who at one time managed Big Blue's PowerPC chip business may be an early sign that the Silicon Valley wunderkind is considering designing some of its own semiconductors.
On Tuesday, Apple (AAPL:
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AAPL 103.30, -7.69, -6.9%) said it was hiring Mark Papermaster from IBM as a senior vice president of devices hardware engineering. Apple made the hire despite a lawsuit last week by Big Blue against Papermaster. IBM wants to keep him from working at Apple for a year, because of the sensitive information Papermaster is believed to have on its chip business, especially the PowerPC processor, which the companies developed together nearly 20 years ago.

Read more at Market Watch

Yahoo's Yang: 'Open minded' about Microsoft deal

SAN FRANCISCO (MarketWatch) - Yahoo Inc. Chief Executive Jerry Yang said late Wednesday that he remains "very open minded" about a full or partial merger with former suitor Microsoft Corp.
"The best thing for Microsoft to do is to buy Yahoo," Yang said during an appearance at a technology conference in San Francisco, "At the right price, whatever that price is."
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MSFT 22.08, -1.45, -6.2%) had offered as much as $33 a share for Yahoo (YHOO:
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YHOO 13.92, +0.57, +4.3%) , before pulling its bid in May.
Since then, Yahoo's share price has crumbled, and investors and analysts have been pressing for the company to reconsider some sort of deal with the software giant -- including selling its online search business, a prize that Microsoft covets.
Yang said Wednesday that such a transaction remains possible.
"As far as a search deal goes, we're very open minded about that," he said.
"They walked away from a public offer, and we were ready to negotiate," Yang said of Microsoft. "Had we been able to do that, we would have been very happy."

Read more at Market Watch