The UK shares closed up 0.56% as the financial companies lifted the index. Northern Rock led the gainers on a sharp increase of 11.6% on news that the troubled bank is negotiating with potential investors. The bank has also confirmed it has cancelled 59 million pound divided to shareholders.

In London trading FTSE 100 was up 0.56% or 36.10 to 6,433.00 as the financial stock led the gainers. There was renewed investor confidence in the London trading after Northern Rock announced that it was in negotiations with potential investors. Other financial stocks that led the risers on the FTSE 100 were Ivesco, Hibos, ICAP Plc and British Land. Of the London shares, 73 rose, 26 eased while 3 remained unchanged.

The U.K banks did not participate in the Bank of England's three-month bond auction after a drop in market interest rates enabled them to borrow in the interbank and other markets.

BoE had set aside 10 billion pounds for liquidity support to banks during the height of the global financial turmoil .No bids were made by financial institutions on funds that the London bank has offered. BoE perceived as a lender of last resort is sought by financial institutions during emergency lending but may have to pay a penalty rate 1% more than market rate.

The Office of the National Statistics Wednesday the UK economy marginally grew in the second quarter, higher than what was projected in the first half of the year. The Office said gross domestic product increased 0.8% in the second quarter higher that its 0.7% estimates. This meant the UK economy rose at an annual rate of 3.1% in the April-June period instead the rate of 3% projection announced last month.

A new survey by the BoE reveled that companies lenders may tighten credit conditions Lenders surveyed by the Bank said they had already tightened lending conditions for companies but lending conditions for households would probably remain generally unchanged. The survey was conducted between August 20th and September 13th.

Of the FTSE 100 shares Northern Rock was the top gainers with a surge of 11.6% followed by a rise in Invesco at 5.55%, in HBOS at 5.12%, in ICAP Plc at 4.38% and British Land at 4.39%. British Land said tougher lending conditions and falling property prices may present it with acquisition opportunities. British Land CEO Stephen Hester his company will consider acquisitions next year, when sellers will probably be more realistic in their price expectations.

Smiths Group Plc appointed Philip Bowman, as the new chief executive officer. Smiths stock rose as much as 6.3 percent, the most in eight months. By close of trade yesterday it gained 3.02%.

Of the index stocks DSG international led the decliners with a loss of 3.7% followed by losses in Carphone Warehouse of 2.1%, in Experian of 2.09%, in Xstrata of 1.44%, and in Wolseley of 1.41%.

1:00PM New York, 10:30PM Mumbai – Sensex closed at a record level for the third day in row. RBI is likely to lower rates in the next meeting in October.

Sensex in Mumbai closed with small gains on selective buying in the index shares. It opened higher on speculation that the U.S. may cut interest rates for the second time in as many months after lowering rates by 0.5% last week.

The BSE Sensex was up 0.3% or 21.8 at 16,921.39 and managed to reach an intra-day high of 17,073.80. The CNX Nifty advanced 0.03% or 1.6 to 4,940.50. Of the Sensex shares, 16 advanced while the rest slid. Satyam Computer led the gainers in the Sensex with a rise of 5% to 432 rupees and Reliance Energy led the decliners with a loss of 5.3% to 1,030 rupees.

Of the stocks traded on the Bombay Stock Exchange 1,485 gained, 1,244 fell and 60 remained unchanged. Daily turnover on BSE amounted to 7,786 crore rupees up from to 7,491 crore rupees in previous session.

The Finance Minister Chidambaram said that the Reserve Bank of India could be forced to intervene if there is a disorderly movement in the exchange rate. He said while the rupee is stable against other global major currencies, it has appreciated 10.5% in the nine months. The Reserve Bank of India is expected to lower rate at the next meeting on October 31st.

Separately Reserve Bank of India raised its limit to $500 million from $400 million for prepayment of commercial loans to private corporations. All other prepayments will require RBI approval.

Of the Sensex shares, IT stocks, recovered from previous losses after the Reserve Bank of India relaxed the norms for outbound investments by mutual funds and raised the limit for companies to prepay their external loans.

Refineries stocks gained after the news that the government is planning to issue bond worth 12,000 crore rupees to cover the losses from selling fuel at below cost. Hindustan Petroleum jumped 4.5% to 277 rupees, Indian Oil closed 7% to 470 rupees, and Bharat Petroleum increased 6% to 369 rupees.

Wipro soared 4.8% to 456 rupees after receiving an order of $130 million from UK based uitility company Thames Water. Of the other IT stocks, Infosys gained 3.1% to 1,826 rupees and TCS jumped 4.5% to 1,047 rupees.

Reliance group stocks fell after a steady rise in the last five trading sessions. Reliance Industries slid 3% to 2325 rupees on 11.63 lakh shares. Reliance Communications fell 0.9% to 589 rupees, Reliance Natural Resources shed 3.32% 91 rupees, IPCL down 1.91% to 462 rupees, Reliance Capital shed 2.7% to 1505 rupees and Reliance Petroleum which closed weaker at 2.6% to 155 rupees. Reliance Retail is likely to close its operations in Noida, Gaziabad, and Uttar Pradesh. The closure is likely to lead a loss of 1,050 jobs.

Housing Development Corporation soared 3.5% to 2,478 rupees after reaching an intra-day high of 2,538 rupees in anticipation of lower rates. Bank stocks advanced as well. Vijaya Bank led the gainers with a rise of 5.7% to 68 rupees followed by 5% gain to 145 rupees in Indian Overseas Bank, and 3% to 102 rupees in Allahabad Bank.