9:00AM U.S. stock futures predict higher opening, helped by deal specuilation.

U.S. stock futures posted modest gains on Monday, supported by deal speculation involving aluminum producer Alcoa. Investors were also awaiting signals of whether market will continue to recover and bond yields will remain in check. With little other economic news due out at the beginning of the week, data on the U.S. housing market is expected Monbday afternoon.

Alcoa (AA: chart) shares rose 2.4% in pre-market trading amid reports that BHP Billiton is reviewing plans to buy the aluminum producer. Among other companies in focus, British Imperial Chemical Industries (ICI: chart) rejected $14.2 billion offer from Akzo Nobel.

Further in M&A action, Finish Line (FINL: chart) announced an agreement to buy Genesco (GCO: chart) for $1.5 billion, which is a 10% premium to Genesco's closing price on Friday. Genesco shares jumped 9%.

S&P 500 futures rose 2.4 points at 1,550.10 while Nasdaq 100 futures edged 0.75 of a point lower at 1,969.00. Dow industrial futures rose 28 points. Bonds rose, with the yield on the benchmark 10-year Treasury note fell to 5.14% from 5.16% late Friday.


7:30AM NY-6:30PM Mumbai Sensex dips 83 points in a highly volatile trade.

The Sensex on BSE finished Monday 82.57 points, or 0.58%, lower at 14,080.14.

The market-breadth was weak. As 1,126 stocks advanced, 1,411 declined and only 61 stocks remained unchanged. Of the 30 stocks in the Sensex, only seven advanced, while all the others declined. The turnover on BSE was Rs 3,676 crore, signaling buying at the primary market. The turnover on BSE on Friday was Rs 4,229 crore. On NSE, the turnover was Rs 7,064 crore, lower than Rs 8,675 crore on Friday.

Economic news

The rupee gained 0.4% to 40.7125 against the dollar today. Meanwhile, India's 10-year bonds gained for a third straight day after the government stated that there were fewer debt sales this week than last. The yield on the 7.49% bond due April 2017 shed 8 basis points, or 0.08%, to 8.20% as of to date.

The Central Board of Direct Taxes released its latest circular on Friday but there were no clarifications on tax level for the capital gains from stock sales.

Trading highlights

Time Technoplast was the most-active stock with a turnover of Rs 217 crore followed by Nestle and Reliance Industries.

Advancers

ICICI Bank led the few gainers on hopes that its plan to sell stock at a premium to the current share price will focus attention. ICICI announced on June 16 it intends to sell shares for Rs 885 to Rs 950 in the largest public offering. The subscription opens on Tuesday this week.

State run oil large-cap ONGC advanced 0.7% to Rs 890. The overseas exploration unit of the company, ONGC Videsh, received last week the Cabinet approval to buy a 33% stake in a deep-water gas field in Egypt from Royal Dutch Shell.

Hindalco Industries advanced 0.5% to Rs 162. The aluminium and copper large-cap has proposed to set up a new extrusion press at an investment of Rs 50 crore.

Decliners

Ranbaxy and Hero Honda led the decliners with a loss of 4% each to Rs 359 and Rs 654, respectively. Hero Honda has been dropping since reports that it has reduced production on diminished demand as interest rates soared to a five-year-high. Tata Steel dropped nearly 2% to Rs 589.