Is it time for hotel boom?

The Indian hotel industry is in an upbeat mood. A slew of major international brands are lining up with open wallets and cheque-books, reports CNBC-TV18's Swati Khandelwal Jain.

International hotel giants want to make Indian hospitality their own. And each one of them, from Carlson to Hilton, to Marriot to Starwood, are ready to jump into what is, for them, one of the most important and fastest growing markets in the world.

Hubert Joly, president and CEO, Carlson, said, "India is our top focus, given the size of the country, the economic expansion, the growth of travel and tourism. Today we have 34 hotels in operation. We are going to open 19 hotels this year and we continue to have a goal to have at least 100 hotels in operation by 2015."

Frits Van Paasschen, president and CEO, Starwood Hotels & Resorts, said, "India is our fourth largest market today around the world as a country and the second fastest growing. We had about 25 hotels a year ago and we expect to be close to 50 by the end of next year. So you would be imagining a doubling from 25 to 50 hotels over a three-year period. We believe that there is another doubling from 50 to 100 hotels in the two to three years after that."

Christopher J Nassetta, president and CEO, Hilton Worldwide, said, "From 5 hotels today we plan to have 10 at the end of this year and 15 at the end of next year and 50 plus over the next four or five years."

Simon Copper, president and MD - Asia Pacific, Mariott International, said, "I would say over the next three years we will double our representation in the market."

Not to be left behind, domestic players are also angling for a bigger piece of the pie. Indian Hotels and Oberio feel 2012 will be a better year in terms of growth and margins. With a revenue target of USD 2 billion, India Hotels, for instance, wants to increase room count to 20,000 over the next 5 years.

Raymond Bickson, MD and CEO, Taj Hotels and Resorts Palaces, said, "I think margins are picking up."

Rattan Keshvani, president, Trident, said, "This year we are all looking at about a 15-20% growth in the topline which is going to be a combination of occupancies and rates. I think the occupancies are stable now and because the occupancies are stable we can expect rates to start climbing."

Funding, which was a big problem, is also melting away. Nearly 50% of the projects are now being financed by big private equity players and investment bankers.

Manav Thadni, Chairman, HVS India, said, "This is the first time we have got around 14-15 bankers out here and they are looking to lend to the industry."

The numbers say it all. With investments of USD 10.3 billion, 82,000 new jobs being created and 60,000 rooms to be added over the next five year, clearly makes India a hot spot for both Indian and international hotel majors.

Also read: Room inventory to grow by 600 keys: Hotel Leela

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Kudos To Paul Ryan And The GOP For Acknowledging Our Budget Mess

Rep. Paul Ryan's (R-WI) plan to cut the budget deficit makes some laughable assumptions and leaves many questions unanswered:
Namely, where the $4.4 trillion of the $6.2 trillion of "savings" are going to come from.

Ryan doesn't have the balls to actually specify these cuts: He just proposes capping federal spending at 20% of GDP. In the absence of specifics, saying that the plan will save $6.2 trillion over 10 years is misleading.

But Ryan and the Republicans deserve a lot of credit for at least acknowledging the huge fiscal mess the United States is in and proposing specific long-term remedies for dealing with it.

For the last several years, the United States has acted as though it can have everything forever: All the services and benefits everyone wants while also cutting taxes. The country's $1.6 trillion ANNUAL deficit, combined with debt approaching 100% of GDP (which doesn't even factor in future healthcare and Social Security liabilities) reveal that this is a pipe dream. (See: A Short Course On Why The US Is Screwed)

What can't go on forever won't. Our leaders have a duty to acknowledge the problem and propose a way out--even if the solutions are temporarily unpopular.

(That's what true leadership is, by the way: Doing the right thing even when it's unpopular, and finding a way to get folks to follow and support you because you can make them understand that it's the right thing).

The Republicans and Paul Ryan are at least taking steps in this direction. They are acknowledging our problem and proposing concrete steps to deal with it.

The Democrats, meanwhile, are just stuffing their heads in the sand.

This year's budget negotiations are pretty much irrelevant. Whether this year's budget cuts $30 billion of spending or $60 billion, the savings will be a rounding error on the overall deficit.

The Democrats have yet to even acknowledge the massive long-term problem the country faces, let alone propose to solutions to it.

We understand and respect the concern about whacking the budget in the midst of a fragile recovery--it's a valid one. If the Democrats were defending the minor cuts in this year's budget by proposing them in conjunction with a compelling long-term plan, we'd be more sympathetic.

As it is, we can only conclude the following: The Democrats are still dreaming of a perpetual free lunch. (And they'll do and say anything to get re-elected.)

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ECB Raises Rates for the First Time Since 2008

Inflation fears in Europe have prompted the European Central Bank to raise interest rates for the first time since 2008. The bank hiked their key rate by 25 basis points to 1.25%.

This is unlikely to be a solo rate hike and it signals even more trouble for the PIIGS, since� the rate hike will have a tendency to push up all euro denominated rates, including the rate at which the PIIGS will attempt to borrow money.

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Free Water Bottle From Victoria's Secret

Get a free water bottle from Victoria's Secret when you log in or register this week for PINK Nation, a sub-brand of the lingerie chain, and buy any PINK item in the store. Offer ends April 11, 2011. Your log-in for Victoria's Secret won't work, unfortunately. Click on the link above, then click on the words JOIN in blue on the left side of the screen.

Enter your name, address, and email to sign up. You can opt into receiving PINK Nation's email and texts if you choose. The form also asks for your birth date, college (PINK is geared towards students), graduation date, and your top and bottom sizes -- but this information is not required to join. I received an email confirmation within minutes, which had a link to print the coupon for a free water bottle.

The coupon will have your name on it and a cashier may ask you for ID to verify.

Caveats: Online, catalog, and factory outlet purchases are not valid for the free water bottle. One per person while supplies last. Valid at U.S. stores only. Photocopies not accepted.

Check back later today and through the week for more great freebies at WalletPop.

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Our Debt Binge Is Ending ? And The Middle Class Will Get Clobbered

The world is coming to the end of a 50-year debt supercycle, John Mauldin says, and the austerity required to put us back on solid financial footing will hammer ordinary Americans.

Mauldin, a financial analyst and the author of ENDGAME: The End Of The Debt Supercycle And How It Changes Everything, thinks that the the US will soon be forced to confront the fact that it has borrowed way too much in the past few decades and must severely cut back.

The US's $1.6 trillion-a-year deficit, Mauldin believes, must quickly be cut to about $300 billion a year, or the US will face a debt crisis. And given that our current government can barely find ways to chop $30 billion of spending from the 2011 budget, these cuts are going to be painful.

What will the forced austerity mean for ordinary Americans?

Higher taxes and significantly reduced Medicare and Medicaid spending, for starters, Mauldin says. And then cuts to almost everything else in the budget, including military spending and education.

In other words, as has so often been the case in the past couple of decades, the middle class will bear the brunt of the impact.

See Also: Budget Battle Will Likely Lead to Crisis and Recession, Says John Mauldin

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Jinpan: A Five-Star Stock That's Poised to Pop

By Brian D. Pacampara, The Motley Fool

Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, cast-resin transformer maker Jinpan International (JST) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Jinpan's business and see what CAPS investors are saying about the stock right now.

Jinpan Facts

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Headquarters (Founded)	Haikou, China (1993)
Market Cap	$197 million
Industry	Electrical components and equipment
Trailing-12-Month Revenue	$144.06 million
Management	Chairman/CEO Zhiyuan Li (since 1997) CFO Mark Du (since 2002)
Return on Equity (Average, Past 3 Years)	17.9%
Cash/Debt	$27.5 million / $40.8 million
Dividend Yield	1.2%
Competitors	ABB (ABB) Siemens (SI)

Source: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS

---

On CAPS, 98% of the 1,337 members who have rated Jinpan believe the stock will outperform the S&P 500 going forward. These bulls include AnchorageAK and All-Star FoolSolo, who is ranked in the top 10% of our community.

Late last year, AnchorageAK tapped Jinpan as a particularly powerful pick: "Power transformer manufacturer based in China, serving the Chinese market. As China's economy continues to develop, expect solid growing demand for power infrastructure investments to benefit Jinpan. Pays a reasonable dividend."

Currently, Jinpan even sports a cheapish forward P/E of 7.7. That represents a clear discount to transformer-making industrial gorillas ABB (13.0), General Electric (GE) (12.8), and Siemens (13.5).

CAPS All-Star FoolSolo expands on the outperform argument:

Playing a sort of hunch on this one. Jinpan is well positioned in green energy in China, and they have really lagged the market for the past year. But given their dividend, and what they are focused on, it is a good long-term prospect. This further adds to my diversification into China.

What do you think about Jinpan, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Jinpan is a Motley Fool Hidden Gems pick. ABB is a Global Gains selection. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

---

Tagged: JinpanInternational, jinpan, Jinpan International, Siemens, general electric, General Electric GE, general electric ge, general electric co, GE, stocks, stock picks, stock

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Jobless claims fall, retail sales stronger (Reuters)

WASHINGTON (Reuters) ? New claims for jobless benefits fell last week and retailers racked up much stronger-than-expected sales in March, signs that high fuel prices have not knocked the economy off its growth path.

Initial claims for state unemployment aid slipped 10,000 to 382,000, the Labor Department said on Thursday, a touch below economists' expectations and firmly beneath the 400,000 level associated with steady jobs growth.

Other data showed shoppers shrugged off higher gasoline prices last month to boost sales at many retailers as improving labor market conditions encouraged discretionary spending.

Same-store retailer sales had been expected to decline for the first time since August 2009, in part because Easter falls three weeks later than last year, delaying some spending.

"The claims report is one more piece of evidence that the general labor market is improving," said Patrick O'Keefe, head of economic research at J.H. Cohn in Roseland, New Jersey.

"The economy is growing and employers are no longer laying off workers because of a weakening in the general economic conditions but rather they doing so for normal business reasons."

The claims data underscored the strengthening labor market tenor and came on the heels of a report last week showing employers added 216,000 jobs in March, with the unemployment rate falling to a two-year low of 8.8 percent.

Last week, the four-week average of unemployment claims, a better measure of underlying trends, fell 5,750 to 389,500.

With the labor market conditions firming, consumers are feeling a little more confident to loosen their purse strings.

Sales at stores open at least a year rose 1.7 percent in a tally of 25 retailers, topping expectations of a 0.7 percent decline, according to Thomson Reuters.

GASOLINE TO DISTORT RETAIL SALES

The stronger-than-expected same-store sales bode well for the government's overall retail sales report for March, which is scheduled for release next week and is expected to be heavily influenced by the high gasoline prices.

They offered some relief after other data on consumer spending suggested a moderation in the pace of economic growth early in the year after a fairly brisk pace in the fourth quarter.

Consumer spending -- which accounts for about 70 percent of U.S. economic activity -- got off to slow start in the first two months of 2011 -- held back by bad weather. Rising gasoline prices also took spending away from other sectors.

The stronger-than-expected same-store sales were little boosted by inflation, given the nature of the merchandise which economists said was less sensitive to the high energy prices.

"Consumers have held back for a long time, there is a certain amount of pent-up demand. Wage growth isn't much, but we are also seeing an increase in income because of an increase in job growth," said Steve Blitz, a senior economist at ITG Investment Research in New York.

"Job growth also means that for those who are employed there is reduced concern about being laid off so the pent up demand is coming out."

With the latest fall, initial claims for jobless benefits are now beneath the 400,000 level, which is generally associated with steady job growth, for four weeks in a row.

The four-week average has held below that mark for the sixth straight week. Economists say both measures need to drop to about 300,000 to signal a strong labor market recovery.

Signs of improvement in the jobs market were also evident in the number of people still receiving benefits under regular state programs after an initial week of aid, which fell in the week ended March 26 to the lowest level since October 2008.

However, long-term unemployment remains a major problem.

A total of 8.52 million people were claiming unemployment benefits under all programs in the week ended March 19, the latest week for which data is available.

"While the labor market has stabilized and employment may be increasing, it's not increasing so rapidly that previously unemployed people who were claiming benefits are returning to work at a fast clip," said J.H. Cohn's O'Keefe.

(Additional reporting by Jessica Wohl in Chicago; Editing by Neil Stempleman)

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FTSE edges up 0.14% at open (AFP)

LONDON (AFP) ? London shares steadied at the start of trading on Thursday, along with markets across Europe, as traders awaited a major interest rate decision by the European Central Bank and reacted to Portugal's bailout request.

The FTSE 100 index gained a modest 0.14 percent to 6,049.83 points in opening deals.

Elsewhere in Europe Frankfurt's DAX 30 dipped 0.04 percent to 7,212.46 points and in Paris the CAC 40 edged up 0.01 percent to 4,048.70.

The European Central Bank was set to raise its interest rates on Thursday for the first time since July 2008 as concern over inflation trumps fears of collateral damage to weaker eurozone economies.

The benchmark rate for the 17-nation zone has been at a record low 1.0 percent since May 2009.

Eurozone member Portugal has meanwhile finally decided to request financial assistance from the European Union, paving the way for a third bailout of a eurozone country after Ireland and Greece.

Analysts have said that Portugal, which requested help late on Wednesday, could require a package worth 70 billion euros (100 billion dollars), compared with 85 billion for Ireland and 110 billion for Greece.

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Mood sours as Congress seeks budget deal (Reuters)

WASHINGTON (Reuters) ? With time running out, an ideological battle flared in the Congress over abortion and environmental issues Thursday as negotiators launched a late push to avert a looming government shutdown.

The mood swung between optimism and pessimism as Democratic and Republican congressional leaders held a series of private meetings and public news conferences to plead their case for a budget deal that will keep the government operating beyond the midnight Friday deadline.

Senate Majority Leader Harry Reid, a Democrat, and House of Representatives Speaker John Boehner, a Republican, met for more than an hour at the White House with President Barack Obama and promised to return for another meeting at 7 p.m. EDT.

A Democratic aide said progress was made at the White House and congressional leaders hoped to work out a final compromise at the evening meeting that would keep more than 800,000 government workers in their jobs.

"We are going to continue to work to get this done. It's not easy to do, but it's doable," Reid told reporters after the afternoon White House session.

Boehner said: "All of us sincerely believe that ... we can get to an agreement, but we are not there yet."

The more civil tone contrasted with morning comments from the two leaders, who blamed each other for the delay in reaching a deal after negotiators worked deep into the night to narrow their differences.

Democrats said there was general agreement on the numbers in the deal, and Reid blamed the impasse on a dispute over Republican policy provisions that seek to block public funding of birth control and stymie environmental protection efforts.

In an afternoon vote, House Republicans approved a stop-gap bill to push the deadline back a week that includes $12 billion in additional spending cuts and assures Pentagon funding through September 30.

Reid called the short-term extension a "non-starter" in the Senate because of the spending cuts. Obama promised to veto it.

Reid said fiscal conservatives aligned with the Tea Party movement were driving the process by pushing an "extreme" agenda and cheering for a shutdown.

Boehner is under pressure to stand firm in the talks from Tea Party conservatives who helped fuel last year's big Republican elections gains with promises of deep spending cuts and reduced government.

"If this government shuts down, and it looks like it's headed in that direction, it's going to be based on our friends in the House of Representatives, the leadership over there, focusing on ideological matters," Reid said at a morning news conference.

With the U.S. economy in the early stages of a recovery from the worst recession since the 1930s, the administration warned a shutdown could hit small business owners, applicants for home loans and workers who would be left without paychecks as the result of federal layoffs.

The investment firm Goldman Sachs estimated a government shutdown lasting more than a week could cost the economy $8 billion in missed federal spending, dragging down growth.

Vital U.S. services such as national defense, law enforcement, emergency medical care and air traffic control would continue, but national parks and museums would close and the processing of passport and a variety of loan applications would halt.

(Additional reporting by Donna Smith, David Alexander, Richard Cowan, Thomas Ferraro and David Morgan; Writing by John Whitesides; Editing by Vicki Allen)

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World stocks unfazed by ECB hike, Portugal plea (AP)

LONDON ? Global markets were unfazed Thursday by the European Central Bank's first interest rate increase in nearly three years and Portugal's request for a bailout.

Both pieces of news had been widely predicted, although the timing of Portugal's bailout plea came earlier than anticipated given the country has no government.

There are even hopes that Portugal's long-awaited request may stabilize the situation within the 17-country eurozone for a while as fears of contagion to other countries, such as much bigger Spain, have diminished.

Those hopes have helped support the euro of late alongside the prospect of higher interest rates.

By mid-afternoon London time, the euro was trading 0.3 percent lower at $1.4289. On Wednesday, the euro hit a 15-month high of $1.4349 on the prediction that the ECB would raise borrowing costs. As a result, the decision to increase the main interest rate to 1.25 percent from 1 percent caused barely a whimper in the markets.

Higher interest rates would not necessarily mean that the euro would be backed if other central banks were also doing so. But with the U.S. Federal Reserve showing few signs that it's planning to change tack, the euro has been buoyant against the dollar.

Better-than-expected figures showing weekly jobless claims in the U.S. fell by 10,000 last week to 382,000 are unlikely to lead to much of a change in the Fed's thinking on their own. The monthly payrolls figures are more important when assessing the outlook for U.S. monetary policy.

The response in bond and stock markets over Portugal's bailout request has been equally relaxed. In Portugal, the bailout request has been met with an element of relief and the country's main stock index was up 1.5 percent, making it the best performer in the eurozone.

"Portugal's bailout appears to have been entirely priced into markets, as there was little reaction to the announcement," said Benjamin Reitzes, an analyst at BMO Capital Markets. "Attention will now turn entirely to Spain, though the decline in yields and credit default swap spreads so far this year suggest markets aren't concerned about contagion."

Elsewhere in Europe, the FTSE 100 index of leading British shares was up 0.2 percent at 6,052 after the Bank of England kept its main interest rate unchanged at a record low of 0.5 percent. Germany's DAX was 0.3 percent higher at 7,235 while the CAC-40 in France rose 0.5 percent to 4,068.

In the U.S., the Dow Jones industrial average was up 0.1 percent to 12,432 soon after the open while the broader Standard & Poor's 500 index rose 0.2 percent to 1,338.

Earlier in Asia, Tokyo's Nikkei 225 index rose less than 0.1 percent to close at 9,590.93 even though the Japanese economy got a boost when the Bank of Japan, in a widely expected decision, kept its key interest rate unchanged at near zero and extended emergency loans to financial institutions affected by the earthquake and tsunami crisis.

Hong Kong's Hang Seng index was marginally down at 24,281.80, while South Korea's Kospi fell 0.2 percent to 2,122.14.

In the oil markets, the apparent stalemate in Libya, which accounts for a little under 2 percent of the world's daily oil production, kept oil prices high.

Benchmark crude for May delivery was up 12 cents at $108.95 a barrel in electronic trading on the New York Mercantile Exchange, a little shy of its 30-month high of $109.15.

___

Pamela Sampson in Bangkok contributed to this report.

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Spain 'won't follow Portugal' with bail-out

Mr Osborne told the British Chambers of Commerce: "If you hear the stories about the cuts and still wonder why our country needs to take these difficult decisions, then look at what is happening around us.

"First Greece, then Ireland, today Portugal. All of them countries that did not convince the world they could pay their debts. Two of them countries with smaller budget deficits than Britain.

"Now all of them being bailed out, at huge costs to their populations.

"Today of all days we can see the risks that would face Britain, if we were not dealing with our debts and paying off our national credit card. These risks are not imaginary - they are very very real.

Few economists think Spain is in line to become the fourth member of the eurozone's bailout club anytime soon following a raft of austerity measures which have included tax increases, public sector wage cuts and the raising of the retirement age from 65 to 67.

Nevertheless, Spain faces extremely difficult times in the years ahead. Unemployment stands at 20pc with grim growth prospects. Thousands of young Spaniards are expected to demonstrate tonight against the austerity measures.

Portugal's caretaker prime minister Jos� S�crates said the country had been taken after the stricken nation had run out of options.

Economists put the UK's involvement in a Portuguese bail?out at up to a potential �4.4bn.

After months of resisting having to apply for a bail?out from the EU and the International Monetary Fund, Portugal's cost of borrowing has reached unsustainable levels.

Addressing the nation last night Mr S�crates, said: "I have always said that asking for aid would be the final way to go, but we have reached the moment."

It is understood that the rescue fund could be as high as �70 billion, or ?80 billion.

Sources close to the Treasury said that Britain would take part in any Portugal?related discussions involving the EU's 27 member states. However, the type of bail?out is yet to be discussed and therefore the extent of the UK's exposure was impossible to gauge, the sources said.

It is understood that a bilateral loan from the UK to Portugal has not been requested and that the Treasury does not foresee any circumstances under which such a request would arise. Britain paid a bilateral loan to Ireland but George Osborne said this was because Ireland was a "friend in need", a major trading partner with a banking sector closely linked to the UK's.

European shares rose on Thursday, led by banking stocks. However, traders were wary ahead of an expected interest rate rise in the eurozone later today and there were worries that the bailout may not signal the end of Europe's sovereign crisis.

Jos� Manuel Barroso, the European Commission president, said that Portugal's request for help would be dealt with as quickly as possible. He assured Mr S�crates that Portugal's request would be "processed in the swiftest possible manner, according to the rules applicable". He also said he had "confidence in Portugal's capacity to overcome the present difficulties".

The Portuguese government had previously said that the country did not need outside help and was able to finance its own debt.

Observers were last night wondering whether contagion from Portugal would spread to other eurozone countries such as Spain, whose economy is significantly larger than that of Portugal, Ireland and Greece combined.

Portugal had earlier promised to pay investors high rates of return to take up government bonds due to be repaid in six and 12 months, its second bond auction in less than a week.

The new economic crisis confronting Europe comes weeks after an EU summit to confirm a new permanent 700 billion euro bail-out facility for eurozone countries in trouble.

The UK will not be liable for any contributions from that fund, but is included in the current temporary ?440bn bail-out fund which was set up to help Greece and which runs until mid-2013.

The temporary fund has already been used to bail out Ireland, and now Portugal is expected to come calling to prop up its economy and shore up the shaky credibility of the euro.

That would oblige the UK to contribute under the terms of the temporary rescue scheme signed up to by then Chancellor Alastair Darling, and which was fiercely opposed at the time by George Osborne, who took his job after the election.

Now Mr Osborne may have to preside over the extension to Portugal of the UK commitment, albeit in the form of financial guarantees rather than actual cash.

UK Independence Party leader Nigel Farage said the UK should refuse to contribute to any bail-out.

Mr Farage said: ''The full tragic reality of the euro is now being seen. Bailing out Portugal is utterly pointless, it only traps them into a system into which they are totally unsuited. Britain should not contribute a single penny to their bail-out.''

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Bank of England holds rates at record low

The Monetary Policy Committee, which sets interest rates, said last month that a rise in oil prices, fanned by tension in the Middle East and North Africa, had increased risks to both inflation and growth.

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Stocks fall after new Japan earthquake

Global equities fell after a strong earthquake shook Japan and the euro fell against the dollar as the European Central Bank raised rates but signaled it was not necessarily the start of a round of hikes.

US and European stocks fell after the earthquake measuring 7.4 shook northeast and eastern Japan. A tsunami warning was issued for the northeastern coast, an area badly hit by March's earthquake.

European stocks ended down 0.2% and the dollar extended losses against the yen. Nikkei futures were down 1.8%. Japan is the world's third-largest economy and investors feared the new quake could harm global recovery.

"We started to drop on this earthquake news out of Japan. It seems to be generating a bit of jitteriness and has caused people to take a bit of profit," said Nick Kalivas, senior equity index analyst at MF Global in Chicago.

"In a couple hours from now if it looks like damage is minimal, the market the will go back to trading economics as opposed to earthquakes."

European shares had earlier gained after Portugal's request for aid fostered hopes the region's debt crisis will be staunched. The pan-European European FTSEurofirst 300 stock index was down 0.2%. Portugal's stock market bucked the trend, the PSI 20 index up 1.2%.

The Dow Jones industrial average dropped 36.63 points, or 0.29%, to 12,390.12. The Standard & Poor's 500 Index dropped 2.34 points, or 0.18%, to 1,333.20. The Nasdaq Composite Index dropped 0.95 points, or 0.03%, to 2,798.87.

World stocks as measured by MSCI gave up 0.3%.

Rate hike

The ECB raised rates by 25 basis points to 1.25%to counter firming inflation pressures. ECB President Jean-Claude Trichet said it was not necessarily the start of a series of similar steps, disappointing some who had expected a more hawkish tone.

"This makes the ECB the first major developed economy central bank to hike rates, and the decision will cement its reputation as a single-minded inflation fighter," said ABN Amro economist Nick Kounis.

"The hike is unwelcome for peripheral countries, but arguably the core member states were in need of this move already some time ago. In that sense, the timing of the increase is a balancing act, which is part and parcel of the one-size-fits-all monetary policy," he added.

The euro was down 0.5% on the day at USD 1.4268, off a more than 14-month high of USD 1.4350 touched on Wednesday. Spot gold hit a new record at USD 1,464.80 an ounce following Trichet's comments.

It was the first rate increase since 2008 and followed a day after Portugal's caretaker government requested European Union aid at the urging of leading bankers. They wanted a bailout to help the economy and safeguard its banking system.

Portugal said it will make the formal request for aid later on Thursday. The rescue package could reach 85 billion euros (USD 122 billion).

Spain vowed it would not follow Portugal in seeking a bailout. A successful Spanish bond auction suggested markets do not fear contagion at the moment.

Investors got more signs of a firming labor market as new US claims for unemployment benefits fell slightly more than expected last week. Other data showed March was not as bad as expected for many US retailers even in the face of higher gasoline prices.

Among commodities, spot gold was recently bid at USD 1,464.12 an ounce after hitting a new peak, while Chicago corn futures reached a fresh all-time high at USD 7.73-1/4 before falling from the peak.

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Knowing Buffett's moves not always a money-maker (Reuters)

NEW YORK (Reuters) ? Knowing what Warren Buffett is going to do a few weeks before he does it is not the sure-fire money-maker you might think.

The iconic investor and champion of ethical corporate behavior is under fire over the revelation that his presumed successor, David Sokol, bought shares in Lubrizol Corp (LZ.N) before pushing Buffett to acquire the company.

That $9 billion deal netted Sokol a profit of nearly $3 million. It also raised questions about whether others inside Buffett's holding company Berkshire Hathaway Inc (BRKa.N) (BRKb.N) have ever bought into stocks they knew Buffett might take a shine to later.

A look back at five other high-profile deals Buffett made in the last three years shows the same kind of foresight Sokol had would have been very lucrative at some times -- and at other times a losing proposition.

Reuters looked at the acquisition of railroad Burlington Northern Santa Fe in August 2009 and four investments Berkshire made in 2008 -- Goldman Sachs Group Inc (GS.N), Dow Chemical Co (DOW.N), Wm. Wrigley Jr. Co and Chinese car maker BYD (1211.HK).

In each case, Reuters compared the company's share price in the first trading session after the deal was announced with its closing share price 70 days before the deal -- the precise window Sokol had from his first purchase of Lubrizol shares to the announcement of the acquisition.

An investor who bought 100,000 shares of each company's stock 70 days before the deals were announced would have made money on Wrigley ($1.89 million), Burlington ($1.32 million) and BYD ($46,296).

But that same clairvoyant investor would have lost a fair bit of money on Goldman Sachs ($2.48 million) and Dow Chemical ($788,000).

In other words, getting ahead of Buffett's five biggest deal before Lubrizol was more or less a wash. But getting into Lubrizol before Buffett, like Sokol did, would have netted the investor about $3 million.

That issue -- getting ahead of Buffett's dealmaking -- has become a source of controversy recently for reasons other than the Sokol matter.

Prosecutors in the biggest insider trading case since the 1980s say fund manager Raj Rajaratnam got inside information from Goldman director Rajat Gupta, including a day-ahead tip that Berkshire would invest $5 billion in Goldman. Rajaratnam, prosecutors say, made $1 million on the information.

(Reporting by Ben Berkowitz, editing by Gerald E. McCormick)

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