11:30AM The Nasdaq tumbled 1.6%. The Dow dropped 1%.
U.S. market averages sharply dropped, as a disappointing sales forecast from Wal-Mart (WMT: chart) along with a rise in crude oil prices raised concerns about consumers' holiday spending. Higher crude oil prices contributed to substantial weakness in the oil-sensitive airline sector. Significant weakness also emerged in the technology sector, with some networking, disk drive, and internet stocks posting steep losses. Of the disk drive stocks, Iomega (IOM: chart) and Adaptec (ADPT: chart) dropped 5% and 3.1% respectively. Brokerage, housing, and defense stocks also came under pressure. Lehman Brothers (LEH: chart), Morgan Stanley (MS: chart), and Raymond James (RJF: chart) turned in some of the brokerage sector's worst performances, each falling about 3%.

Further downward pressure came from the continuously falling dollar, as it weakened demand for U.S. investments. The Nasdaq was pressured by 2% decline in Google (GOOG: chart) shares, while a drop of 2% for Dow component Ford Motor (F: chart) weighed on the blue-chip index. Among other stocks in focus, Lowe's (LOW: chart), home improvement retailer, jumped 1.7% after some positive analyst comments from Banc of America, which raised its rating on the company's stock to Buy from Neutral. On the other hand, shares of J. Crew (JCG: chart), apparel retailer, slipped 6.1% after CIBC World Markets downgraded the stock, citing valuation. Meanwhile, gold stocks limited the downtrend by the broader market, with the precious metal price rising $9.80 to $638.80 an ounce. In late morning trading, the Dow Jones industrial average fell 118.65, or 0.97%, to 12,161.52. Recently, 26 of the 30 components that make up the Dow were trading lower. The Standard & Poor's 500 index was down 12.57, or 0.90%, at 1,388.38, and the Nasdaq composite index fell 40.31, or 1.64%, or 2,419.95. Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.57% from 4.55% late Friday.


10:30AM The Sensex finished higher on Monday in a broad-based rally.
The Sensex on BSE ended 70.26 points, or 0.5%, higher at 13,773.59. The market-breadth was positive. As 1,425 shares advanced on BSE, 1,129 shares declined and 64 shares were unchanged. For every 6 advancers, there were 5 decliners. From the 30-share Sensex stocks, 20 advanced while the rest declined. The turnover on BSE was Rs 4,450.93 crore, lower than Rs 5,213 crore on Friday. The turnover on NSE was Rs 7,973.17 crore.

Economic news

India stated on Monday 3.2 million tonnes of imported wheat had so far arrived at its ports against the 5.5 million tonnes contracted after a poor crop sent prices spiralling. Despite agreeing the first imports in six years, India has also allowed the private sector to buy in wheat at zero duty.

Advancers

Cement shares advanced on firm cement prices. ACC surged 3.8% to Rs 1,114, Gujarat Ambuja Cements gained 3.6% to Rs 143.50, Grasim rose 0.6% to Rs 2,690.30 and UltraTech Cement added 0.5% to Rs 886.

Tata Power rose 2.3% to Rs 590 after the company today posted 61% growth in net profit for second quarter September 2006 to Rs 202.32 crore (Rs 125.67 crore). Total revenue advanced 16.5% to Rs 1,279.17 crore from Rs 1,097.21 crore.

NTPC rose 2.3% to Rs 153.60 on its plans to set up a power plant in Sri Lanka. The stock canceled out gains, though, after rising as much as 5.1% to a high of Rs 157.80. Bharti Airtel advanced 2% to Rs 629.45 after group company Bharti Enterprises agreed to form a joint venture with US retailer Wal-Mart Stores to enter the Indian retail sector.

IT shares rose. Wipro rose 1.9% to Rs 602, HCL Tech gained 1.7% to Rs 640.25, and TCS rose 0.8% to Rs 1,157.80. Software large-cap Infosys shed 0.3% to Rs 2,226. TCS Chief Executive S. Ramadorai said on Friday TCS was getting new contracts at 5-10% higher billing rates. He said the existing contracts were being negotiated for renewal at 3-55 higher rates.

Bank shares drew attention after bond price hit 7-month high. State Bank of India gained 2% to Rs 1,282. ICICI Bank was 0.8% to Rs 882. Oil exploration company ONGC added 1.7% to Rs 871.90 on market expectations of new gas finds.


Hindustan Zinc jumped 5.6% to Rs 970.65 after the top zinc producer raised zinc prices by 3.5% to Rs 2,28,800 a tonne. The firm simultaneously cut lead prices by 3.045 to Rs 82,800 a tonne.

Decliners

Dr Reddy led the decliners, down 2.22%. Tata Steel lost the 0.5% to Rs 480.50 in volatile trade. Corus Group PLC said on Monday it is to give Brazilian steel company Companhia Siderurgica Nacional SA (CSN) more time to weigh up a formal offer for the Anglo-Dutch steel group.

Reliance Industries lost 0.8% to Rs 1,251. Reliance Industries is finding more and more gas in the Krishna Godavari basin off southern India, a top official announced. BHEL shed 1.1% to Rs 2,500. The company said on Monday it had won a Rs 129 crore order from Hindustan Zinc to build a power plant in Rajasthan. UTI Bank lost 0.3% to Rs 495. Three block deals of 23.11 lakh shares each were executed in the UTI Bank stock on BSE at average price of about Rs 501.30.

Other news

Cairn Energy Plc, an Edinburgh-based company that drills for oil and gas in South Asia, set a price range of 160 rupees to 190 rupees ($3.58 to $4.25) for each share of its Indian unit, which is making an initial sale. The company will issue about 538.5 million Cairn India Ltd. shares in the sale, which may be the second-largest IPO in India.