12:00PM European markets closed in the negative.
European markets closed sharply lower Wednesday, reflecting profit taking and weakness in the auto and oil sectors. Losses on Wall Street amid inflation concerns also added to the pressure. Lehman Bros downgraded Peugeot and DaimlerChrysler to equal-weight and cut the European car sector to neutral. Peugeot lost 2%, while DaimlerChrysler fell 1.7%. in the energy markets oil hovered over $68 a barrel, with oil majors like BP, Royal Dutch Shell, and Total all moving to the downside. The German DAX 30 led losers, falling 1.2%, followed by the French CAC 40, down 1.1%, and London FTSE 100, down 0.9%.

Oil prices hovered round $68 a barrel. Light crude October delivery fell 45 cents to $68.15 a barrel. London Brent October delivery dropped 73 cents to $67.35. The dollar extended gains versus major currencies. The euro traded at $1.2783, down from $1.2812. The dollar bought 116.64 yen, up from 115.93. The British pound stood at $1.8911, down from $1.8943. European gold traded mixed. In London the precious metal traded at $636.90, down from $638 per ounce. In Zurich gold traded at $636.90, up from $634.90. Silver closed at $13.16, up from $13.08.


11:30AM Stocks remained weak on inflation anxieties.
Stocks traded weak Wednesday morning after the Labor Department said productivity decreased and wages increased in the spring, raising concerns that the Federal Reserve will return to a policy of interest rate hikes. The Nasdaq showed a notable decline, reflecting weakness in the tech sector. Of companies in focus, Intel Corp. (INTC: chart) fell 2.10% after it said it would cut fewer jobs than some investors expected. Shares of General Motors Corp. (GM: chart) gained 2.2%. Ford Motor Co. (F: chart) rose 2.38%, to $8.59, after announcing that it had hired former Boeing CEO Alan Mulally to run the company. Boeing fell 1.10% amid concerns over Mulally''s departure. In midmorning trading, the Dow Jones industrial average fell 37.31, or 0.33%.The Standard & Poor''s 500 index was down 6.52, or 0.50%, and the Nasdaq composite index dropped 17.94, or 0.81%.

The ISM''s index of activity in the service sector rose to 57.0 in August.
The Institute for Supply Management released its report on business activity in the service sector in the month of August on Wednesday, showing that pace of growth accelerated more than economists had expected. The report showed that the ISM''s index of activity in the service sector rose to 57.0 in August from 54.8 in July, with a reading above 50 indicating growth in the sector. Economists had expected the index to increase to edge up to 55.0. The faster pace of growth in the sector came despite a slowdown in the pace of new orders growth, with the news orders index falling to 52.1 in August from 55.6 in July. The pace of employment expansion also slowed, with the employment index slipping to 51.4 in August from 54.5 in July. The report also showed a slowdown in the pace of price growth, as the prices index fell to 72.4 in August from 74.8 in July. Despite the decrease, the prices index suggested that price growth remains at an elevated level.


10:30AM The Sensex finished the trading higher on large-cap rally.
The Sensex on BSE ended 28.61 points or 0.24% higher, at 11,933.21. The index traded in a range of 78.56 points in the trading session. The market-breadth was positive, with the advancers to decliners ratio at 1.30:1. On BSE, 1,429 shares advanced, 1,092 declined and 85 shares were unchanged. From the 30-Sensex stocks, 16 advanced while 14 declined. The turnover on BSE was Rs 3,070 crore, higher than Tuesday’s Rs 2,811 crore. The turnover on NSE was 6,369.38.

L&T and Reliance Energy led the advancers. L&T gained 3.8% to Rs 2,560, Reliance Energy jumped 3.7% to Rs 482. It had traded in a broad range of Rs 485 and Rs 467. Gujarat Ambuja Cements climbed 1.2% to Rs 116.90 and Bharti Airtel rising 2.5% to Rs 428 were the other top advancers. Maruti Udyog edged 0.28% higher to Rs 895.50.

Reliance Industries advanced 0.79%, to Rs 1,134.20 on 12.10 lakh shares, surging earlier to a high of Rs 1,145.95, as buying intensified on high volume. Reliance Industries was the most-active stock on BSE with a total turnover of Rs 137.80 crore, followed by Hindustan Zinc with Rs 121.98 crore and Tata Steel with Rs 74.83 crore.

Metal stocks were in demand, following stable prices in international markets. Hindustan Zinc was up 6.6% to Rs 628.80, Sterlite Industries grew 4.9% to Rs 471.25, Jindal Steel & Power jumped 4.5% to Rs 1595, Tata Steel gained 1.3% to Rs 520, Hindalco moved up 1.37% to Rs 181.40) and Nalco advanced 1.96% to Rs 210.50.

Construction stocks were also in focus on renewed buying interest. Unitech surged 10% to Rs 237.90, Simplex Infrastructure was also up 10% to Rs 1,730.60, Lok Housing gained 6.51% to Rs 284.50, Jaiprakash Associates climbed 4.20% to Rs 486.15 and Reliance Infrastructures jumped 5% to Rs 497.15.

Oil explorer ONGC sank 2%, to Rs 1,203 as stock trades ex–dividend. The company paid a dividend of Rs 20 per share. Reliance Communications was also down 1.5% to Rs 300.25, TCS shed 1.3% to Rs 993 and HDFC Bank lost 1.5% to Rs 861.30. J&K Bank declined 1.2%, to Rs 430.70, after a block deal of 2.50 lakh shares was struck on BSE at Rs 425 per share in opening trade. The stock experienced high volatility, trading in a range of Rs 425 and Rs 440.

India Multi Commodity Exchange Ltd. has postponed its initial public offering that could have raised about $65 million, as it awaits clarity from the government on foreign investment in exchanges.

Flag Telecom, a division of Reliance Telecom inaugurated launch of its high speed Intenret network spanning from Egypt in the Middle East to India. Flag wholesales internet bandwidth in the international market. The local telecommunication companies in region including Oman, Egypt, Baharin, Kuwait and Saudi Arabia are using the service for Internet access. Reliance network spans 80,000 km in India. Reliance and VSNL are still at odds for local access points and charges in India and the issue is now contested in the internation arbitration court.


09:45AM Stocks opened down on labor-cost growth.
Stock markets opened in the negative amid renewed inflation worries after productivity data showed that Q2 unit labor costs reached a 16-year high. Labor cost growth was revised up to 4.9% compared to the preliminary reading of 4.2% growth. Second-quarter productivity was revised to 1.6%, up from the 1.1% level reported a month ago. However, Ford Motor Co. (F: chart) helped to limit the downward trend, rallying 2.3% on news that it had hired former Boeing executive Alan Mulally to run the company.

In early trading, significant weakness emerged in the disk drive sector, as reflected by the 3.5% loss shown by the Amex Disk Drive Index. Energy stocks also came under pressure, as the price of oil has extended a recent downward move. Additionally, technology stocks moved back to the downside, contributing to a steep decline by the Nasdaq. In the first hour of trading, the Dow Jones industrial average fell 44.19, or 0.39%.The Standard & Poor''s 500 index was down 6.55, or 0.50%, and the Nasdaq composite index dropped 17.22, or 0.78%.

Fairchild Semiconductor, (FCS: chart), high-performance power products company reported it raised its guidance for sequential Q3 sales to flat to up 2%, as continued healthy order rates has led to lower-than-anticipated cancellation rates. The company had previously expected sequential sales to be just flat. Over the previous four years, Q3 sales had averaged a sequential decline of 2%.

Panera Bread Co., (PNRA: chart), bakery-cafes operator, reported that August same-store sales advanced 1.3%. The company cut its Q3 same-store sales growth target to 2% to 3% from 3% to 4%.

Pathmark Stores Inc. (PTMK: chart), supermarket operator, reported its Q2 loss widened to 17 cents a share, from 12 cents a year ago. Sales for Q2 rose fractionally to $1 billion, while same-store sales gained 0.5%. The company missed analysts’ views for a loss of 12 cents a share on sales of $1.01 billion. Pathmark said results were hurt by lower pharmacy profitability because of the new Medicare Part D program, higher costs for utilities, self-insured workers'' compensation and general liability claims, and medical and pension costs, among other expenses.