Price cap hits China oil refiner

Profits at top Asian oil refiner Sinopec nearly halved in 2008 because of caps on how much it could sell fuel for, even as oil prices soared.

Annual net profit fell 47% to 13.3bn yuan ($1.94bn; £1.35bn) from 56.5bn yuan in the same period a year earlier.

It marked the first profit decline at the state-run firm in seven years.

The loss came as the company was obliged to supply fuel at low prices set by the government, even when prices reached a record $147 a barrel.

But analysts expect margins to improve in 2009 as price caps ease and oil prices remain far below the record reached in 2008.

The firm predicts its net profit for the first three months of this year will rise by half compared to the same quarter a year earlier.

But it also warned that demand would slow further.

"The demand growth for refined oil products in the domestic market is expected to slow down," the company said.

"Due to the combined pressure of slower economic growth and a downward cyclical trend, the chemicals business will be facing more challenging situations."

While the firm saw its profits fall sharply in 2008, the government provided annual subsidies worth 50.3bn yuan.

Other firms in the sector have also been hit, with PetroChina recently saying its net profit in 2008 fell 22%.

Deutsche Bahn boss set to resign

The head of Germany's railway company, Deutsche Bahn, has offered to resign after the company admitted spying on thousands of its employees.

Chief executive Hartmut Mehdorn said: "I have offered the chairman of the supervisory board my resignation".

The firm admitted that it conducted a surveillance operation on staff, intended to tackle corruption.

Mr Mehdorn said he had not been aware of the spying but expressed regret over what had happened.

There have been calls in the media for him to resign but in a recent newspaper interview he vowed to stay on.

Deutsche Bahn, the country's biggest public company, has previously confirmed it employed investigators from a detective agency in Berlin to carry out covert surveillance operations on its employees.

It has also admitted monitoring staff emails to check whether they were being critical of the company's policies.

Privatisation

Mr Mehdorn has previously won plaudits for turning Deutsche Bahn into a profitable company.

Earlier on Monday the firm posted a 4.8% increase in pre-tax profits to 2.5bn euros (£2.3bn; $3.3bn).

As well as the controversy over spying, Mr Mehdorn has become embroiled in scandals regarding train safety and bonus payments relating to a planned privatisation of the firm.

Until now he's been able to count on the support of Chancellor Angela Merkel, who has backed him over previous confrontations.

But as she faces a federal election in six months, analysts have suggested her support could diminish.

Russia's poor 'need crisis help'

Russia's economy will shrink by 4.5% this year because of the global downturn, the World Bank has predicted.

The Bank said Russia, a major oil producer, would be particularly hard hit by the low price of oil.

It said the Kremlin should shift the focus of its anti-crisis programme to the poor because of "the threat of significant social pressure".

The Bank added that aid to Russia's poor might have the added benefit of stimulating domestic demand.

Unrest feared

The World Bank says that the social situation in Russia has worsened so rapidly and so unexpectedly that it is important to shift the focus of the anti-crisis policy to the population.

It says that the Russian government should increase payments to the unemployed and to pensioners.

Since the global economic downturn began to affect Russia, the authorities here have been worried by the prospect of social unrest - especially in towns where single enterprises are the engine of the entire local economy.

The government insists that it has the funds to meet social spending requirements, but the World Bank's prediction is likely to cause further concern.

While the Bank expects the Russian economy to shrink by 4.5% this year, the Russian government predicts a 2.2% contraction.

GM chief Wagoner ousted by Obama

The chief executive of struggling US car company General Motors has been ordered to step down by US President Barack Obama.

Rick Wagoner will leave immediately, a government official confirmed.

Mr Obama is preparing to outline terms for offering more help to GM and fellow car giant Chrysler.

The two firms have already received $17.4bn (£14.4bn) in bail-outs. Chrysler has requested a further $5bn while GM says it needs $16.7bn more.

Plans rejected

Reports have suggested that a frustrated Mr Obama will reject GM and Chrysler's turnaround plans as unrealistic, raising the risk of the carmakers' bankruptcy.

The auto task force appointed by Mr Obama released two reports on Monday on the financial health of both carmakers, saying that Chrysler was "not viable" in its current form.

It demanded a merger with Italy's Fiat or another carmaker if Chrysler was to survive and said the Obama administration would only provide the company working capital for the next 30 days.

It also said that it would pledge to fund GM's operations for the next 60 days only, requiring the carmaker to come up with another plan detailing further restructuring.

"While Chrysler and GM are different companies with different paths forward, both have unsustainable liabilities and both need a fresh start," the task force said.

"Their best chance at success may well require utilising the bankruptcy code in a quick and surgical way."

GM says 7,500 workers to leave

US carmaker General Motors has said 7,500 union workers have accepted its offer of incentives to leave the firm.

All of the hourly members of the United Auto Workers union working for GM have been offered a voucher for a new car and $20,000 in cash to leave.

GM, which has received at least $13bn (£9bn) in US government loans, is trying to cut its workforce to match lower car sales as the recession bites.

GM shares closed 14% higher in New York following the announcement.

Most of the workers will leave by April, the carmaker said.

"The special attrition programme, along with the many difficult but necessary actions we have taken in recent months will help ensure the long-term viability and future success of General Motors," Gary Cowger, vice president for global manufacturing and labour relations.

Earlier this month, GM said it would not need the $2bn of funding it had previously requested for March from the government because of an acceleration of its efforts to cut costs.

In December the company warned it could run out of cash in a matter of weeks if money were not made available.

GM said the $2bn requested for March would not be needed "at this time", but did not say if the carmaker would cancel or modify its request for $16.6bn in aid asked for last month.

India, Israel sign USD 1.4 billion deal on air defence system

India has signed its biggest defence deal with Israel for the purchase of a state-of-the- art air defence system at a whopping cost of USD 1.4 billion (Rs 7,042).

Israel Aerospace Industries (IAI) has officially acknowledged that the defence deal between the two countries was inked on 27th February under which Israel will develop and manufacture seaborne and shore-based systems against missile attack on India, business daily 'Globes' reported.



The signing of the deal comes as India is in advance stage of testing of its own anti-missile shield. The Defence Research and Development Organisation (DRDO) has already successfully test-fired its advanced air defence (AAD) missile.



The two sides have agreed that part of the payment for the systems will be made during the development period and the balance will be paid during the 66 month delivery period, which is slated to begin 90 months from the date the advance payment is received, the report said.



As per the agreement, IAI has also undertaken to procure military or aviation products and services from India. It will invest in defence companies in India up to an amount equal to 30 per cent of the contract.



India is currently Israel's largest arms buyer

Google lays off another 200 staff

The search engine company Google is planning to cut nearly 200 marketing and sales jobs in its second set of lay-offs this year.

Google blamed the cuts on having grown very quickly, which meant it had over-invested in some areas as well as "creating overlapping organisations".

The cuts represent less than 1% of the 20,200 people employed by Google.

Earlier this year, the company decided to lay off 100 of its recruiters because it was taking on fewer people.

"Google has grown very quickly in a very short period of time," Google's Omid Kordestani said on the company's official blog.

"When companies grow that quickly it's almost impossible to get everything right and we certainly didn't."

Google said that staff affected would be given time to find other jobs within the organisation or severance packages if they had to leave.

Sensex improves further after initial volatility

After initial hiccups, the benchmark sensex improved further by 88 points at 10:15 hrs following overnight strong rally on Wall Street amid sustained buying by foreign funds.

The 30-share barometer, which jumped by a whopping 1,036.42 points or 11.56 per cent in the last four-day rally, initially moved erratically in a range of 10,091.18 and 9,914.29 points before being quoted at 10,090.97 at 1015 hours, a rise of another 87.87 points from its previous close.



The broad-based 50-issue Nifty of the National Stock Exchange also moved up by another 24.50 points or 0.79 per

cent to 3,106.75 at 1015 hrs from its last close.



Brokers attributed rally in share values to smart rise on Wall Street on Thursday. The Dow Jones Industrial Average and the tech-heavy Nasdaq Composite Index were up by 2.25 per cent and 3.80 per cent, respectively on hopes that the US economy's worst days might be over.



However, Asian indices were trading narrowly mixed in early trade. Metal, capital goods, banking and pharma shares were in keen demand, while IT counters were down on profit-selling

on the first day of the April series.



Continued capital inflows and fall in inflation to 0.27 per cent mainly gave support to the market.

Oil weaker in Asian trade, NY crude above USD 54

Oil weakened in Asian trade on Friday after an overnight rally driven by the surge in US equity markets, analysts said.

New York's main contract, light sweet crude for May delivery dropped 29 cents to USD 54.05.

Brent North Sea crude for May delivery was off 21 cents to USD 53.22.

Crude prices likely ran out of steam amid worries the worst is not over for the US economy, analysts said.

"While the bounce in financials could run on, the broader economy is still in the doldrums and unlikely to turn the corner until next year at the earliest," research house Capital Economics said in a report.

"As such we think the prospects for non-financials remain far from rosy."

Revised data released Thursday showed the US economy shrank 6.3 percent in the fourth quarter ended December, which was worse than the initial estimate of a 6.2 percent decline.

The slump was the steepest since 1982 but not as bad as the 6.6 percent annualised drop expected on average by private forecasters.


Meanwhile, the president of oil-producer United Arab Emirates said in an interview published on Thursday that an oil price of 70-75 dollars a barrel would be "fair."

Japan's retail woes add to slump

Retail sales in Japan saw their biggest fall in seven years in February, adding to fears of a deepening recession.

Shoppers spent 5.8% less than a year earlier, bringing the total value of sales to 9.98tn yen ($101bn), according to government figures.

The figure is more than twice January's year-on-year decline of 2.4% and is the sixth monthly decline in a row.

Meanwhile, South Korea and Vietnam also reported weak economic data, as the slowdown hits Asia's economies.

South Korea's economy grew less than first estimated in 2008, expanding 2.2%, compared with a initial estimate of 2.5%.

Vietnam's economic growth rate slowed to 3.1%, its lowest rate in a decade, according to an estimate for the first quarter.

Deflation fears

In Japan, consumer price inflation remained unchanged for a second month in a row.

The Consumer Price Index (CPI) figures, which exclude volatile fresh food prices, prompted analysts to warn that Japan was on the brink of a return to the deflation that plagued it in the late 1990s.

"We are expecting deflation to last for two years, well into 2010," said Hiroshi Watanabe, an economist at Daiwa Research Institute.

'Worst crisis'

The figures were the latest in a stream of grim statistics charting Japan's economic woes.

The country's exports saw a record plunge of 49.4% year-on-year in February, as worldwide demand for its products collapsed.

Japan's economy contracted by 3.3% in the last quarter of last year - its worst showing since the oil crisis of the 1970s.

Economic Minister Kaoru Yosano has said Japan is facing its worst economic crisis since the end of World War II.

Australia rejects China takeover

Australia has rejected a Chinese state-run firm's $1.7bn (£1.2bn) takeover bid for Australia's Oz Minerals because of national security concerns.

Australia said one of Oz Minerals' key mines was located near a weapons-testing range in the outback.

It said the bid by China's Minmetals could only be approved if the deal excluded this copper and gold mine.

The surprise move jeopardises Oz's future and clouds other Sino-Australian deals still waiting for approval.

"Oz Minerals' Prominent Hill mining operations are situated in the Woomera Prohibited Area in South Australia," Treasurer Wayne Swan said in a statement.

"The Woomera Prohibited Area weapons testing range makes a unique and sensitive contribution to Australia's national defence," he added.

Oz and Minmetals said they would look to revise the deal.

Prime asset

Prominent Hill mine is considered Oz's prime asset and analysts questioned whether Minmetals would be prepared to go ahead with the acquisition without it.

Increased investment by Chinese firms has raised hackles in Australia, which has typically been open to foreign investment.

Australian authorities have yet to decide on Rio Tinto's $19.5bn tie-up with Chinese aluminium firm Chinalco and Fortescue Metals' plan to sell a $770 stake to China's Hunan Valin Iron and Steel.

Australia extended its review of Chinalco's investment until June. Some Rio shareholders have expressed opposition to the deal.

Australian Foreign Minister Stephen Smith, who held talks with his Chinese counterpart Yang Jiechi in Beijing on Friday, defended the decision.

"We encourage overseas foreign investment, capital investment in Australia that is one of the things that the whole of Australia's economy is built on," Mr Smith said

"But from time to time a difficult context passes and we are faced with having to make a decision in the national interest."

Oz Minerals, the world's second-largest zinc miner, is struggling to meet a Tuesday deadline to repay $1.3bn to creditors.

Mining firms are struggling as the global slowdown hits demand for raw materials.

Nano booking to start from 9th April

The booking of the Nano, the Rs one-lakh people's car from the Tata stable, will begin on 9th April and remain open till 23rd April; the delivery of the first lot of Nano cars will begin in early-July.

Announcing this ahead of its launch on Monday, Tata Group Chairman Ratan Tata told editors that the car, which would have the smallest footprint on the road, will be sold to the first one-lakh buyers at a price to be announced later.

The promise that has been made to sell the car at around Rs one-lakh would be kept despite the fact that commodity prices had shot up, Tata said, adding that the fall in commodity prices now may provide some cushion.

The delivery of the first lot of Nano cars will begin in early-July, he said, adding that applications for booking of the car would be available in 30,000 locations in 1,000 cities across India.

State Bank of India would be the qualified banker for collection of bookings in 850 cities, he said.

The car can be booked by just paying Rs 2,999 upfront while the rest can be secured by way of loan, he said.

There would be 15 preferred financiers for the booking whose names would be disclosed in three days.



The initial 50,000-60,000 Nano cars is to be supplied from its Pantnagar plant primarily set up to manufacture Ace trucks, Tata said, adding that the plant to manufacture the Nano at Sanand (Gujarat) is likely to go on-stream by end-this year or early next year.

The first one-lakh customers will be selected by draw of lots from the bookings, he said, adding that those not allotted would have the option to retain their bookings.

The customers who wait for more than one-year will be paid 8.5 percent interest and those beyond two-years will be paid 8.75 percent, Tata Motors' Managing Director, Ravi Kant, said.

No interest would be given to the first one-lakh allotments, Ravi Kant said, adding that the company expects to supply the cars to the first lot in a year's time.

Tata made it clear that Nano production at Pantnagar was, however, an interim solution after the company was forced to shift its production from Singur in West Bengal to Sanand.

"Personally, to say the least, I feel very excited that we were able to go to the last mile to implement Plan B and launch the vehicle in March this year instead of December (this year) or January (next year)," Tata said.



Tata said that all preferred financiers would roll-out their booking schemes within three days.

The rate of interest on the loan would be decided by the banks that provide the loans, Ravi Kant said, adding that several banks would be providing loans including public sector banks.

The Sanand plant would have a capacity of 2.50-lakh units per annum which could later be expanded to half-a-million, Tata said.

The model would meet BS II, III and IV norms which are equivalent to Euro II, III and IV norms, Tata said.

US unveils $1tn toxic asset plan

The US has announced details of a plan to buy up to $1 trillion (£686bn) worth of toxic assets to help repair banks' balance sheets.

The "Public-Private Investment Programme" will purchase the troubled mortgages and securities that have been at the root of the credit crunch.

The Treasury has committed $75bn to $100bn to the programme and said the private sector would also contribute.

Investors welcomed the news, with stocks rising in Europe and Asia.

The Treasury said the plan would help the financial system recover.

US banks still hold many mortgage-related assets that they cannot value or sell.

Having so many of so-called toxic assets on their books has made them reluctant to lend, causing the financial system to freeze up, and pushing the economy further into recession.

Sony Ericsson braced for losses

Sony Ericsson has said that it expects to make a loss in the first three months of this year as sales continue to suffer in the economic downturn.

The company predicts a net loss before tax of between 340m euros (£320m; $466m) and 390m euros for the quarter.

Both retailers and distributors are cutting their stock, said the firm.

Other mobile phone firms have also seen sales fall as demand slows. Earlier this week, Nokia said that it would shed 1,700 jobs due to poor sales.

And previously mobile phone giant Motorola said it would cut 4,000 jobs, roughly 6% of its workforce, to reduce costs.

Sony Ericsson said it was likely to ship around 14 million phones during the first quarter.

It is due to announce its full quarterly results on 17 April.

Oil price soars above 50 dlrs on US Fed plan

Oil prices jumped above USD 50 after the Federal Reserve moved to inject another trillion dollars into the US financial system to boost the world's biggest economy.

New York's main futures contract, light sweet crude for delivery in April, ended USD 3.47 higher from yesterday's close to USD 51.61 per barrel, topping USD 50 for the first time in four months.

In early trading, the contract surged to USD 52.25 - the highest level since 28th November, 2008.

Brent North Sea crude for May delivery rose USD 3.01 to 50.67 in London after breaching USD 51.

Analysts attributed the price jump to Wednesday's announcement by the US Federal Reserve that it would pump USD 1.15 trillion into the financial system. The move also has pulled down the US dollar against key currencies.

"You need to put this action in the context of what has happened in the last few weeks in the market. There has been a shift in market sentiment," said Constanza Jacazio of Barclays Capital.

"From a market where demand was the only driver of price action and sentiment, there seems to have been a shift in a more balanced view," he said.

Crude futures had slid on Wednesday on news of a larger-than-expected increase in US energy reserves that highlighted weak American energy demand, but trimmed losses after news of the Fed plan.

Nineteen US states go after AIG

Nineteen US states are demanding that insurance giant AIG reveal details of bonuses paid to executives, so they can take steps to recover the funds.

This comes after New York Attorney General Andrew Cuomo said AIG had given him such a list on Thursday.

The US House of Representatives has passed a bill to levy a tax of 90% on the big bonuses paid to people working at firms that have received state aid.

The $165m (£114m) of bonuses have caused outrage across the US.

US President Barack Obama has denounced such bonuses, while even AIG boss Edward Liddy has described them as "distasteful".

AIG has taken $170bn in aid from the US government.

French aid prompts Renault move

French carmaker Renault is to shift some car production back to France after the guarantee of state aid.

Renault will take the production of its Clio Campus model to the Paris suburbs from Slovenia, creating 400 jobs, a French government minister said.

But the European Commission has demanded clarification about the plan, saying it may be protectionist.

France last month agreed to give Renault and Peugeot Citroen loans in return for keeping French plants open.

The plan to offer both Renault and Peugeot Citroen 3bn euros ($4bn; £2.8bn) sparked a row over protectionism after President Nicolas Sarkozy suggested that the money should not be used to rescue French-owned factories in Eastern Europe.

Luc Chatel, a junior minister for industry, announced Renault's decision in a local radio interview.

European concerns

EU Competition Commissioner Neelie Kroes told the BBC she was highly surprised and was seeking urgent clarifications. Ms Kroes said she received a pledge from Mr Chatel just a few weeks ago that the state bail-out for French car firms would not be linked to moving jobs to France.

If the aid proves to be conditional on this, Ms Kroes said it would be illegal under EU rules and should be paid back.

BBC correspondent, Oana Lungescu, said the clash comes at a pivotal point.

"This row couldn't have come at a worse moment for the EU, just as leaders meeting in Brussels are calling on the US and others to tackle the global crisis by avoiding all forms of protectionism," she said.

But Renault has defended its plans, saying its Slovenia factory was at full capacity and that the move to the Flins faciility in Paris would allow Renault to cope with additional orders.

In 2008, the French government said it would give consumers 1,000 euros if they traded in cars older than 10 years for a low-emission car.

'Increased production'

Renault spokeswoman Natalie Bourette said the move will not see job losses at Renault's Slovenian plant, which makes the Twingo and Clio models, but would rather be used as an opportunity to ramp up Slovenian production of the Twingo.

"Novo Mesto [the Slovenian plant] has no more available capacity, which is why we took the decision," she said.

Renault's claims were backed up by French President Nicolas Sarkozy.

"This is not about cutting jobs in Slovenia," he said.

"It doesn't take a single job from our Slovenian friends and it increases jobs for Flins," he added.

Meanwhile, Renault anticipates it will produce 8,000 Clio Campuses in Flins between June and October. Flins mostly produces the newer Clio III model.

Carmakers in Europe and beyond have been hit hard by the economic downturn.

Renault last month reported a steep fall in profits and abandoned its targets for 2009, blaming an economic crisis "of massive proportions". Sales in Europe were down more than 7%, it said.

OPEC Ministers agree to leave existing output targets unchanged

OPEC Ministers agreed to leave existing output targets unchanged, but promised to enforce those curbs more strictly and said they would meet again at the end of May.

The decision reflected concern for the world economy and a belief production curbs so far have begun to take away some of the over-supply from oil markets, the Organization of the Petroleum Exporting Countries said in a communiquéé after the nearly five-hour conference.



OPEC spokesman Omar Ibrahim told a news conference in Vienna that the conference therefore emphasized its commitment to comply fully with its decision of December 2008.



Ministers from the 12-member producers' club had repeatedly said their focus was better compliance with deals in place since September to lower targets by 4.2 million barrels per day.



OPEC adherence has been estimated at roughly 80 percent.

Obama 'outraged' at AIG bonuses

US President Barack Obama has expressed anger at $165m (£116m) bonuses pledged to executives of bailed-out insurer AIG, calling the payments "an outrage".

"It's hard to understand how derivative traders at AIG warranted any bonuses, much less $165m in extra pay," he said.

He has told Treasury Secretary Timothy Geithner to "pursue every single legal avenue" to block the bonuses.

White House spokesman Robert Gibbs later said AIG's next bailout payment could be altered to protect taxpayers.

He did not say how this could be achieved, but analysts say the government could reduce the payment - which is $30bn - by $165m, in order to force AIG to account for the bonuses in another way.

'Play by rules'

AIG announced the bonus payouts on Sunday.

In a speech which was intended to launch initiatives to help small businesses deal with the economic crisis, President Obama strongly criticised the company.

"All across the country, there are people who work hard and meet their responsibilities every day, without the benefit of government bailouts or multimillion-dollar bonuses," he said.

"And all they ask is that everyone, from Main Street to Wall Street to Washington, play by the same rules."

The $165m was payable to executives by Sunday and part of a larger total payout reportedly put at $450m.

New York Attorney General Andrew Cuomo now says he has issued legal papers demanding that AIG reveal the names of those receiving the bonuses - something which he says the firm has refused to do.

"When a company pays funds that the company effectively doesn't have, it's akin to a looting of a company," he said.

AIG has not yet commented on the legal move, but a spokeswoman said the firm was "in ongoing contact" with the attorney general.

Google in court over Vuitton row

Lawyers for Google are to appear in the European Court of Justice in a row over the search engine's use of trademarks.

LVMH, the company behind Louis Vuitton luggage and other brands, has accused Google of selling search words such as Vuitton to the highest bidder.

Web users searching for its products will see adverts for rivals or firms selling counterfeit goods, LVMH argues.

Google appealed to Brussels after a French court ruled against it. The web giant says it does respect trademarks.

No outcome is expected for several months.

Trademark case

This case comes as criticism grows about the dominance of Google, says BBC technology correspondent Rory Cellan-Jones.

"Some comes from rivals like Microsoft - but there's also concern from media firms and from privacy campaigners about a firm which has a huge share of online advertising, and knows an awful lot about millions of web users."

In 2005, Google lost an appeal against a court ruling over trademark infringement brought about by two French travel companies.

A lawsuit was filed after Google users searching for the two French companies - Luteciel and Viaticum - found themselves directed instead to rival sponsored links.

Google's failure to follow an order quickly enough triggered a 75,000-euro fine.

LVMH has been active in efforts to protect its brand online.

In June last year, a French court ordered auction site eBay to pay 40m euros to LVMH for allowing online auctions of fake copies of its goods.

LVMH had said eBay's French site had not done enough to stop the sale of counterfeit bags and perfumes, under brands including Louis Vuitton, Christian Dior and Givenchy.

Nokia to cut 1,700 jobs worldwide

Nokia, the world's largest mobile phone maker, has announced plans to shed 1,700 jobs worldwide as part of a major cost-cutting drive.

Phone sales have been hit hard by the economic downturn and the company said in January that it would cut costs by 700m euros ($910m; £647m).

The job cuts will be across a number of departments, including marketing, development and support functions.

"Nokia continues to seek savings in operational expenses," the group said.

'Big numbers'

"Altogether, these plans will affect approximately 1,700 employees globally. Where applicable, Nokia will start consultations with employee representatives about these plans," it added.

Nokia employs about 125,000 people globally.

"The number of employees we have to reduce is 1,700," confirmed Arja Suominen at Nokia.

She said about 700 jobs will go in Finland, with the US and the UK the next hardest hit.

"We are making very small changes in a large number of countries, but when you count them together you come to very big numbers," she explained.

Further details will be announced once negotiations with employees have begun, she added.

For the final three months of 2008, Nokia made a profit of 576m euros, down almost 69% from 1.84bn euros during the same period in 2007.

The company blamed the poor results on the global economic slowdown that is affecting people's ability to buy new mobile phones.

Oil prices down in Asian trade

Oil prices were lower in Asian trade on Friday following an overnight rally ahead of OPEC's weekend meeting to discuss output levels, analysts said.

New York's main futures contract, light sweet crude for April, dipped 34 cents to USD 46.69 a barrel.



Brent North Sea crude for delivery in April declined 33 cents to USD 44.76.



Analysts said the market was looking to the Organisation of the Petroleum Exporting Countries (OPEC) meeting in Vienna on Sunday to discuss whether to slash production.



The cartel pumps about 40 percent of the world's crude supplies.



"Most industry specialists seem to anticipate another cut but we are not convinced there is a consensus yet among the cartel members," said Julian Jessop, chief economist of London-based research house Capital Economics.


"Even if OPEC does cut quotas by the 500,000 barrels per day that some expect, the impact on prices should be limited. For a start, by far the greater issue is the weakness on the demand side," he said.

China 'can boost stimulus plan'

China is ready to introduce new economic stimulus measures "at any time", Premier Wen Jiabao has said.

He said there was enough "ammunition" to add to the 4tn yuan ($586bn; £421bn) package already announced.

He was speaking at the end of China's annual parliamentary session - the only time he takes questions from reporters.

Although Mr Wen said he expected China and the rest of the world to be better off in 2010, he said the government was ready to face tougher times.

"We have prepared contingency plans to handle greater difficulties," he said.

"We have prepared enough ammunition and we can launch new economic stimulus policies at any time."

Opening the annual session of the National People's Congress nine days ago, Mr Wen had said that this year would be the most difficult China has faced this century.

Confidence needed

He said confidence was "more important than gold or money" in overcoming the world's financial troubles.

"Only when we have confidence can we have courage and strength, and only when we have courage and strength can we overcome difficulties."
But Mr Wen said he was worried about the safety of the huge amount of China's foreign-exchange reserves invested in US government bonds.

"I'd like to take this opportunity here to implore the United States... to honour its words, stay a credible nation and ensure the safety of Chinese assets," he said.

Almost half of China's $2tn in currency reserves is thought to be invested in US treasury bills and other government-affiliated notes.

"We are extremely interested in developments in the US economy," Mr Wen said.

G20 meets to tackle world crisis

Finance ministers from the world's leading countries are gathering near London to discuss plans for coordinated action to tackle the economic crisis.

They hope to agree the agenda for the G20 summit of world leaders next month.

The aim is to send a signal to the world that key countries are working together to tackle the worst economic downturn since the Great Depression.

The G20 includes the world's biggest industrial and developing countries, making up 85% of the world economy.

The meeting is likely to focus on the need for tougher regulation of banks and more funds to tackle the crisis.

UK Chancellor Alistair Darling, who is hosting the meeting, said that the world's biggest economies must work with other countries if they are to bring about economic recovery.

Disagreements But there are already signs of disagreement among the G20 countries over how much money governments should spend to get their countries out of recession, with Europe notably less enthusiastic than the US about further spending.

French President Nicolas Sarkozy said on Thursday that "in Europe we have already invested a lot for the recovery" and that the priority should be "putting in place a system of regulation so that the economic and financial catastrophe the world is seeing does not reproduce itself".

However, Chinese Prime Minister Wen Jiabao said that China had enough "economic ammunition" to launch a new economic stimulus plan at any time.

Madoff fraud investigation widens

With disgraced US financier Bernard Madoff now behind bars, attention has turned to whether others were involved in his estimated $50bn (£35bn) fraud.

While Madoff insists he acted alone, prosecutor Lev Dassin said he was investigating if others had joined in the crime.

Investigators are also continuing work to see how much of the stolen funds can be recovered.

Madoff has been remanded in jail ahead of his sentencing in June.

This has seen him swap his wife's luxury Manhattan apartment for a small cell in New York's Metropolitan Correctional Centre, just a few miles away.

No plea deal

"We are continuing to investigate the fraud and will bring additional charges against anyone, including Mr Madoff, as warranted," said Mr Dassin.

He also rejected speculation that Madoff had agreed to plead guilty in exchange for leniency to help any others who may have been involved in the crime. "There is no agreement whatsoever," he said.

Madoff told his Thursday court hearing that his family members, and other colleagues, had only ever worked in parts of his business - Bernard L Madoff Investment Securities - that were "legitimate, profitable and successful".

Some of Madoff's thousands of victims have said they were angry that Madoff had been allowed to plead guilty, as this means he will avoid a full jury trial.

The victims had hoped that such a trial would have allowed the full details of the crime to be revealed.

"If there will not be a trial... a lot of this information that people want to hear about... may not come to light," said victim Richard Friedman.

'Money we need'

Investigators say they are now continuing efforts to recover $177bn from Madoff. He himself estimates that the fraud totalled $50bn, and investigations have only managed to recover $1bn so far.
Because of the nature and length of the scheme, victims may recover only a small fraction of their losses," added Mr Dassin.

Some victims have also been paying taxes for a number of years on profits that have turned out to be fake.

Under current US rules, taxes can only be reimbursed for the past three years, but Madoff's fraud started in at least the early 1990s.

"We were paying taxes on money that didn't exist. We paid a fortune," said victim Lenore Schupak, 55.

"This is money we need to live on," added Ms Schupak, who said she had been forced to sell her home and move in with her sister.

Authorities have yet to make any comment on whether Madoff victims will be able to claim back taxes from more than three years ago.

McDonald's warns of revenue drop

US fast-food chain McDonald's warned that the stronger dollar and commodity costs will squeeze its first-quarter revenues and earnings per share.

First quarter revenues could be at least $600m (£434m) lower, it said.

McDonald's sales have remained steady in the economic downturn, helped by its low prices and the ubiquity of its fast-food outlets.

It posted a 1.4% rise in sales in February, compared with a year earlier, at outlets open at least 13 months.

The small increase in sales came despite having one fewer day in February this year than in last year's Leap Year.

But the rates of increase are substantially lower than last year when, with McDonald's reporting an increase of 11.7% in February 2008.

Sales were up 2.8% in the US, helped, it said, by the chicken menu, particularly the quarter pounder. Sales were down 0.2% in Europe compared with the year before .

"If foreign currency rates remain at current levels, currency translation is expected to negatively impact first-quarter revenues by at least $600m and earnings by at least $0.07 to $0.09 per share," the company said in a statement.

"In addition, as previously stated, commodity cost pressures are expected to have a greater impact during the first half of the year."

Pound slides as bank shares hit

The pound has sunk back below $1.40 to a six-week low, as confidence in the UK economy took yet another knock following falls in bank shares.

The pound was down almost four cents at $1.3776. Sterling touched its lowest levels in 24 years in mid-January, nearing $1.35.

UK financial shares fell in Monday trading after the government increased its stake in Lloyds Banking Group.

Against the euro, the pound was down over two cents at 1.0927 euros.

Shares in Lloyds fell more than 10%, before recovering during afternoon trading to end the day up 4.1%.

Barclays lost 13% before bouncing to end down 5.3%.

Other banking stocks among the day's biggest losers included HSBC, down 3.3%, and RBS, which fell 4%.

'Downward pressure'

"What's going on in UK shares at the moment is putting pressure on sterling," said Geraldine Concagh at AIB Group Treasury.

She added that the Bank of England's programme of quantitative easing will put further downward pressure on sterling.

The taxpayer will soon own 65% of Lloyds Banking Group - up from the current 43%.

Chinese prices record rare fall

Chinese consumer prices showed an annual fall in February for the first time since 2002, figures have shown.

The consumer price index fell 1.6% from a year earlier, dragged down by falls in food prices but officials downplayed the threat of a deflationary spiral.

Consumers welcome falling prices, but a prolonged drop undermines company profits as people put off purchases.

Growth in China has slowed sharply as its exports have been hit hard by the global economic downturn.

"Deflation is a symptom of a weak real economy and industrial capacity, which has left companies with little pricing power," said Jing Ulrich, an analyst at JP Morgan.

She added that China's bout of deflation was likely to be temporary as government measures to kick-start spending take effect.

Slowdown

China's inflation rate hit a 12-year high of 8.7% in February 2008 because of shortages of grain and pork.

Officials said this high base for comparison partly explained February's fall.

In the first two months of 2009, prices were down just 0.3% from a year earlier.

In the final three months of last year, China's economy expanded by 6.8% from a year earlier - below the 8% that officials view as the level needed to keep unemployment in check and avoid social unrest.

Overall growth in 2008 stood at 9% - the first time since 2002 that the economy has expanded at a single-digit pace.

Airbus company returns to profit

European aerospace group EADS, the parent company of Airbus, made a profit of 1.57bn euros ($2bn; £1.45bn) in 2008 despite the uncertain economic climate.

In 2007, EADS made a loss of 446m euros. The firm said it expected 2009 profits to be lower than 2008's amid doubts about future aircraft demand.

Airbus delivered a record 483 aircraft in 2008, beating main rival Boeing.

However, EADS said that setbacks in the production of its A400M military transporter would continue.

The A400M's first flight has been postponed because of problems with its engines.

Reshaping

In the fourth quarter of 2008, EADS made a net profit of 490m euros, up 89% from a year earlier.

EADS said the robust profits were in part down to cost cutting.

"We made significant headway in reshaping the company," said Louis Gallois, EADS chief executive.

Although 2009 would be "challenging", he said that 2009 profits would be "significantly positive".

Unlike many companies that have been forced to cut payments to shareholders because of the economic downturn, EADS said it would pay a dividend of 0.20 euros per share, up from 0.12 euros a year ago.

Ford staff accept working changes

Workers at US carmaker Ford have voted to accept changes to their contracts and other benefits, the United Auto Workers union (UAW) says.

The changes include freezing wages, eliminating cost-of-living increases as well as some paid holidays and bonuses.

The deal, which is aimed at helping the firm remain competitive, also involves a new funding arrangement for a health care trust.

Ford's rivals GM and Chrysler will now face pressure to do similar deals.

Ford is the first US carmaker to come to an agreement with the UAW. US carmakers have struggled with a slump in demand as the economic crisis continues. Ford is also the only one of the so-called Detroit Three that has not asked the US government for any emergency loans.

Ford claims it currently has enough money to survive the downturn but says the deal will help it address a fall of income as car sales collapse.

The deal with the UAW is one of several steps Ford has taken to cut costs as part of a turnaround plan that the company initiated four-years-ago.

Sacrifices

The union said 59% of production workers and 58% of skilled-trades workers voted for the agreement.

"We are facing an unprecedented loss of sales and revenue at Ford," said UAW Vice-President Bob King.

"The voting results show that our members are prepared to make painful sacrifices in order to be part of the solution to the problems facing Ford and the US auto industry."

The deal will also save Ford billions of dollars in health care costs. The company will now pay up to half of its obligation to a trust fund for retired workers in stock rather than cash.

The announcement came as members of the Obama administration task force were touring General Motors and Chrysler facilities in the Detroit area.

GM and Chrysler have already received $17.4bn (£12.6bn) between them in federal support, and have asked for a further $21.6bn.

Similar agreements with the UAW are needed as a requirement of their bailout packages.

IMF predicts a global recession

The world economy is likely to shrink for the first time in decades this year, the head of the International Monetary Fund (IMF) has warned.

Dominique Strauss-Kahn's prediction is gloomier than that the IMF's current official forecast of 0.5% growth.

He added that trade was falling at an alarming rate and business and consumer confidence had collapsed.

He was speaking at a conference in Dar-es-Salaam, Tanzania, to discuss how Africa should respond to the crisis.

"The IMF expects global growth to slow below zero this year, the worst performance in most of our lifetimes," Mr Strauss-Kahn said.

The World Bank, the IMF's sister institution, on Monday said it also expects the world economy to shrink in 2009.

'Severe'

Mr Strauss-Kahn also warned that Africa's economic growth will be affected by the continuing world downturn. The IMF predicts that growth in sub-Saharan Africa will slow to about 3% in 2009, half the growth rate it previously thought.

Mr Strauss-Kahn said even this rate may be "too optimistic".

"Even though the crisis has been slow in reaching Africa's shores, we all know it is coming and its impact will be severe," he said.

"We must ensure that the voice of the poor are heard. We must ensure that Africa is not left out."

The conference will discuss what external support the IMF and other Western donors may be able to provide to help mitigate the impact of the crisis on Africa, which has the highest poverty rate of any region in the world.

Not at fault

The IMF's managing director, Dominique Strauss Kahn, told the BBC on Monday that the conference would be a "milestone" and that he wanted to build a different kind of partnership with Africa, as well as providing additional funds.

Africa has little direct exposure to the credit crisis. Its banks have not invested much, if at all, in the problem financial assets at the heart of the crisis.

But the global downturn has undermined demand for many industrial commodities, which are important exports for several African countries. - including oil in Nigeria, Angola and Equatorial Guinea, and copper in Zambia.

Less than a year ago, the IMF's forecast for sub-Saharan Africa was economic growth of 6.7% in 2009, an increase on the 5% growth enjoyed in 2008.

Now the low growth forecast means that many African countries are likely to see very little increase in living standards, and could fall further behind in meeting poverty targets.

It says that 15 of the 21 countries which it judges most vulnerable to the crisis are in Africa.

Inflation back to 2002 level at 3.03 per cent

Inflation declined to about a six-and-a-half-year low of 3.03 per cent by the third week of February as most food, fuel and manufactured items turned cheaper, justifying the RBI's rate cut move to propel growth.

With wholesale prices-based inflation coming to a level seen on 10th August, 2002, by falling 0.33 percentage points from 3.36 per cent a week ago, economists expect the RBI to further cut rates next month.


This is the fifth consecutive week that inflation has fallen.


Economists expect inflation to reach zero by this fiscal end.


While most food products in raw form saw a decline in prices, manufactured food items like sugar and ghee turned marginally expensive.


Most other manufactured products also became cheaper, with the exception of metals alloys and machine tools.


Crisil Principal Economist D K Joshi said, "There could be further rate cuts. I believe there could be a cut of 50 basis points in both the repo and reverse repo rates next month."



With inflation going below four per cent, the RBI on Wednesday cut the short-term lending and borrowing rates the repo and reverse repo by 50 basis points to arrest economic slowdown with India's GDP growth falling to over a five-year low of 5.3 per cent in Q3 of the current fiscal.


However, the central bank has noted that consumer prices are still high, but expressed the hope that they may also come down after some time.


The Reserve Bank pointed out that consumer price inflation, as reflected in various indices, is in the range of 9.85-11.62 per cent as of December 2008-January 2009 and is yet to show moderation.


"Consumer price inflation has remained at elevated level due to increase in primary articles' prices. With WPI inflation having moderated significantly, consumer price inflation may also be expected to decline, though with a lag," the RBI said.


However, it is mainly wholesale price inflation that is widely tracked.


The wholesale price index (WPI), on which inflation is based, declined by 0.1 per cent to 227.6 points for the week ended
21st February, 2009, from 227.8 points a year ago.



Among food products, vegetables turned cheaper by 3.2 per cent and fruit by little less than one per cent. Bajra, jowar and gram also became cheaper.


However, prices of maize and arhar moved up.


Among non-food items in raw form, raw silk prices declined by seven per cent, copra by three per cent and rape and mustard seed and gingelly seed by one per cent each.


In fuels, jet fuel saw a 4 per cent decline in prices, and furnace oil by one per cent.


In the manufactured goods category, sugar turned expensive by two per cent and ghee by one per cent.


Prices of machinery and machine tools also rose, but those of textiles, basic metals alloys and transport equipment and parts declined.

Satyam approved to sell 51% stake

Fraud-hit IT firm Satyam has been given the go-ahead to sell most of itself.

Indian financial authorities approved plans for the company to sell a 51% stake as it seeks to win back clients and restore customer confidence.

Reports suggest computing giant IBM and Indian engineering firm Larsen & Toubro are frontrunners for the stake.

Satyam has struggled since former boss Ramalinga Raju admitting inflating their assets by more than $1bn.

Shares in Satyam jumped 18% after the company's state-appointed board got approval to sell the majority holding.

Satyam lost more than 80% of its market value following Mr Raju's confession in January.

The auction for the stake will be global and potential buyers would need to have assets of at least $150m.

The buyer then would not be able to sell its stake for at least three years, Satyam said in a statement.

Satyam had been one the biggest players in the booming Indian IT software market, supplying back-office services to firms from around the world.

EU calls for crisis talks over GM

The European Commission has called for a crisis meeting among EU states hosting General Motors (GM) plants.

EU Industry Commissioner Guenter Verheugen said that the way GM was "dealing with the issue of Europe is not acceptable".

Earlier, the troubled carmaker's auditors said there was "substantial doubt" about the ability of General Motors to stay afloat.

Last week GM posted a $30.9bn (£21.9bn) loss for 2008.

It also warned that 2009 was set to be "challenging".

Shares in General Motors fell more than 15% in New York trading.

European worries

Earlier this week, GM's top executive warned the European divisions of General Motors (GM) could collapse within weeks without European governments' help - costing up to 300,000 jobs.

Chief operating officer Fritz Henderson also said governments should step in immediately to ensure GM Europe did not run out of money by April or May.

Mr Verheugen said: "We expect GM to disclose everything,

"What are their plans with their European daughter companies and locations? What are they doing with property rights, and especially is GM prepared to maintain responsibility for the European companies or not?"

He said that at the emergency meeting he wanted to find out "what the different member states that have GM sites are considering to do".

EU countries that have GM-related production plants include Britain, Belgium, Poland, Germany, Spain and Sweden. Some other EU states host suppliers.

Liquidation fear

Ongoing losses and the struggle to generate cash flow meant the firm's ability to continue as a going concern should be questioned, said the auditors.

The firm, which plans to cut 47,000 jobs, has said it might need another $22.6bn in government loans to survive.

It had already received $13.4bn in federal loans as it struggles in what analysts say is the worst vehicle sales market in 27 years.

GM said that its creditors had decided not to force the company to repay more than $6bn in loans following the auditor's warning, in order to let GM press the case for more government financial aid.

"The corporation's recurring losses from operations, stockholders' deficit, and inability to generate sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern," auditors for Deloitte & Touche wrote in the annual report.

GM reiterated on Thursday that a bankruptcy filing could lead to liquidation, as the company would not have enough funds to finance its reorganisation.

Besides, consumers could be reluctant to buy bankrupt carmakers' vehicles, GM said.

According to GM, its February sales plummeted 53% from a year earlier, while its rival Ford posted a 48% drop.

The auditors' remarks reflect comments already made by the firm about its difficulties.

GM said in its annual report: "Our future is dependent on our ability to execute our viability plan.

"If we fail to do so for any reason, we would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under the US bankruptcy code."

Northern Rock makes £1.4bn loss

Northern Rock has confirmed it made a loss of £1.4bn in 2008.

The bank also said it was ahead of target in repaying the £26.9bn loan from the government, having reduced the amount it owed by £18bn to £8.9bn.

It also confirmed its plans to support government policy to increase mortgage lending, saying it would offer £14bn of new lending.

"Northern Rock has made good progress against the business plan objectives laid out in March 2008," it said.

Oil price falls on economic fears

Oil prices have plunged 10% as yet more bad economic data sent stock markets sharply lower and undermined hopes of economic recovery.

US light crude fell by $4.61 to $40.15, while London Brent crude dropped $4.14 to $42.21.

Huge losses at US insurer AIG and plans for fund raising by HSBC bank sparked sharp falls in global markets.

And weak manufacturing figures in the UK and eurozone only served to deepen the gloom yet further.

'Weaker demand'

With hopes of an early economic recovery now fading, fears are growing that demand for oil will remain depressed.

Oil cartel Opec has already cut production by millions of barrels a day in an attempt to support oil prices.

"Although, OPEC, by all counts, is doing a good job in complying to its quota levels, it looks like flat price is being driven by the deteriorating global economic environment as reflected in the Dow Jones [industrial average]," said Nauman Barakat, senior vice president at Macquarie Futures USA.

Michael Lynch at Strategic Economic and Energy Research said: "We had the run-up last week, but now people are looking at weaker demand signals," said Michael Lynch at Strategic Economic and Energy Research.

A number of observers, he added, now believe that more supply side cuts will be needed to prop up the oil price.

Algerian Energy and Mines Minister Chakib Khelil said on Sunday that "it is quite possible that OPEC will decide to make a further reduction of production" at its next meeting scheduled for 15 March.

However Iran's Oil Minister, Gholamhossein Nozari, said he did not expect another output cut.

Japanese stocks skirt 26-year low

Japanese stocks traded close to 26-year lows in Tuesday trading as investor concerns about the health of the financial system persisted.

Japan's Nikkei 225 touched 7,088.47 on Tuesday morning, close to the 26-year low that it hit in October. However, it later recovered some ground.

Other Asian markets also fell, with Hong Kong's Hang Seng index down 1.5%.

On Monday, the US Dow Jones share index fell below 7,000 points for the first time since 1997.