India raises interest rates

India raised interest rates on Thursday. Channel NewsAsia reports:

The Reserve Bank of India has raised its lending rate by 25 basis points to 7.5 per cent. The borrowing rate was also raised by 25 basis points to 6.5 per cent. However, the cash reserve ratio - amount of funds that banks have to keep with RBI - was left unchanged at six per cent.

The central bank governor said the domestic growth outlook remains unchanged and that inflation is way above the RBI's comfort zone.

Greece, though, remained the focus of investors' concern in Europe. From Bloomberg:

European stocks fell to a three- month low as Greek Prime Minister George Papandreou said he will reshuffle his cabinet and seek a confidence vote...

The benchmark Stoxx Europe 600 Index fell 0.5 percent to 266.73 at the 4:30 p.m. close in London, its lowest level since March, as all but three industry groups slid. The gauge has lost 8.4 percent since this year’s high on Feb. 17 as a slowdown in U.S. job creation suggested the economic recovery is faltering and speculation grew that Greece will default on its debt.

US stocks, though, managed to end in positive territory despite mixed economic data. From Bloomberg:

Manufacturing in the Philadelphia region unexpectedly contracted in June and Americans’ views on the economy’s outlook soured, signaling an erosion of confidence in the expansion.

The Federal Reserve Bank of Philadelphia’s general economic index fell to minus 7.7, the lowest since July 2009, from 3.9 the prior month. Readings less than zero signal contraction. The Bloomberg gauge of economic expectations slumped to minus 31 this month, the weakest since March 2009, from minus 16...

Stocks rebounded, a day after the Standard & Poor’s 500 Index dropped to a three-month low, as better-than-estimated housing starts and jobless claims reports tempered concern about Europe’s debt crisis. The S&P 500 rose 0.2 percent to 1,267.64 at the 4 p.m. close in New York...

First-time filings for unemployment benefits declined by 16,000 last week to 414,000, Labor Department figures showed today. Economists surveyed by Bloomberg News projected 420,000 claims, according to the median forecast.

Construction began on 560,000 houses at an annual pace, up 3.5 percent from the prior month and exceeding the 545,000 median forecast of economists, Commerce Department figures showed.