1:00PM European markets advanced on stronger dollar.
European stocks advanced Wednesday, boosted by retail stocks, stronger U.S. dollar, and gains on Wall Street. Stronger-than-expected retail sales in the U.S. in November boosted confidence in the dollar against other major currencies, which in turn helped dollar-sensitive export stocks. Well-received earnings from Spanish retailer Inditex also provided help. Shares in Inditex climbed 4.7% in Madrid. The German DAX 30 advanced 0.7%, with automaker Volkswagen and chip maker Infineon Technologies, gaining 1.9% on 0.4% rise for the greenback vs. the euro. Insurance group Hannover Re added 3.1%, as it agreed to sell its Praetorian Financial unit to Australia''s QBE Insurance Group. The French CAC 40 rose 0.9%, helped by 1.7% rise for Airline Air France-KLM on the back of lower oil prices and deal speculation related to a possible tie-up between United Airlines and Continental Airlines. Peers Deutsche Lufthansa and British Airways also advanced 1.7%. The U.K. FTSE 100 ended up 0.6%, helped by online gambling companies PartyGaming, up 5.6% and SportingBet, up 1.3%.

Crude oil prices rose amid weaker crude oil inventories and concerns about production cuts. Crude oil January contract gained 48 cents to $61.50 a barrel. London Brent lost 30 cents to $61.22. The U.S. dollar gained ground against its major currency rivals. The euro was quoted at $1.3214, down from $1.3277. The dollar bought 117.37 yen, up from 116.90. The British pound was quoted at $1.9655, down from $1.9700. European gold prices also advanced. In London, gold traded at $629.75 per troy ounce, up from $628.52. In Zurich, the precious metal traded at $627.10 per ounce, up from $626.20. Silver closed at $13.78, down from $13.84.


11:30AM Market turned mixed, as disappointing oil inventory report boosted oil.
Market retreated from an early rally on strong retail data, as a disappointing oil inventory report sent oil prices sharply higher. Light sweet crude rose 58 cents to $61.60 after the U.S. government reported that crude supplies fell by 4.3 million barrels last week. Retailers moved higher after the Commerce Department reported 1% increase in retail sales. However, higher oil prices limited gains. Wal-Mart (WMT: chart) and its rival Target Corp. (TGT: chart) traded up 1%. Among decliners, Best Buy (BBY: chart) and Circuit City Stores (CC: chart) fell 1.3% each as both stocks were downgraded by Prudential Securities on concerns about lower retail prices for flat-panel televisions.

IPOs were boosted by the early bullish sentiment. IPG Photonics (IPGP: chart) surged 50% after it offered 9 million shares at $16.50 each, yielding proceeds of $149 million. The stock opened at $25 a share. UAL Corp. and Continental Airlines Inc. were in the spotlight on news the two airlines are in talks about a possible merger. UAL (UAUA: chart) rose 4.35, while Continental Airlines (CAL: chart) added 4.2%. In late morning trading, the Dow Jones industrial average was up 9.77, or 0.08%, at 12,325.35, down from a new trading high of 12,368.61 earlier in the session. The Standard & Poor''s 500 index was up 1.32, or 0.09%, at 1,412.88, and the Nasdaq composite index fell 2.14, or 0.07%, to 2,429.99. Treasury prices dropped. Yields in turn moved sharply higher, with the benchmark 10-year Treasury note jumping to 4.55% from 4.48% late Tuesday.


Crude oil inventories extended decline.
Crude oil inventories fell sharply in the most recent week, according to government statistics released Wednesday. This extended declines posted in the previous couple weeks. Meanwhile, gasoline stockpiles experienced a draw down as well. The Department of Energy''s Energy Information Administration said that crude oil inventories slipped 4.3 million barrels in the week ended December 8. Specifically, the measure dipped to 335.4 million barrels from the previous week''s level of 339.7 million barrels. This followed a decline of 1.1 million barrels in the previous week and a slide of 300,000 barrels in the week before that. Oil inventories for the December 8 week were 3.9% higher than last year. Meanwhile, gasoline inventories showed a week-over-week decline of 100,000 barrels. This extended a recent streak of declines, including a slide of 1.1 million barrels in the previous week. The level of gasoline inventories was 3% below last year. Distillate fuel oil also had an inventory decline during the week ended December 8. Stockpiles of these products, which include heating oil, fell by 500,000 barrels. This added to a decline of 400,000 barrels in the previous week.


10:30AM The Sensex rebounded on Wednesday in a volatile trading.
The Sensex on BSE finished 186.32 points, or 1.4% higher, at 13,181.34. The market-breadth was positive as there were two gainers for every loser. As 1,652 shares gained on BSE, 849 declined and 68 shares were unchanged. The session was extremely volatile as the index traded in a range of 393 points during the day. The turnover on BSE was Rs 4,404 crore, lower than Rs 4,931 crore on Tuesday. On NSE, the turnover was Rs 9,635.82 crore, lower than Rs 11,085.28 crore on Tuesday.

Economic news

According to Agricultural Minister sugar export ban is likely to be exported sooner than expected on better harvesting season. The ban would be raised within a week, officials claim. It was imposed in July to reduce increasing prices due to tight supplies, and was about to run until the end of the financial year in March.

Most –active stocks

Reliance Industries was the most-active stock with a turnover of Rs 192 crore followed by Parsvnath, Reliance Communications and HDFC.

Advancers

Reliance Communications rallied 7% to Rs 432.90, after media reports linking the company with three US private equity groups, for buying the Indian operations of Hutchison Telecommunications International in a deal worth more than $14 billion. Bharti Airtel also jumped 4% to Rs 601 and Reliance Industries gained 2.6% to Rs 1,240.50.

Bank shares bucked the recent downtrend and inched higher after the Federal Reserve Bank in the U.S. on Tuesday did not change short term interest rate. Banking stocks gained led by SBI rising 4% to Rs 1,230.90, ICICI Bank gaining 2.7% to Rs 828 and HDFC Bank advancing 1.9% to Rs 1,050.

Cement shares advanced on buying interest at the lower level. Grasim surged 5.7% to Rs 2,650, ACC gained 3.9% to Rs 1,010 and Gujarat Ambuja Cements moved 3.9% up to Rs 135.

Pharma large-caps also gained. Dr Reddy’s Lab rallied 5% to Rs 792.50 and Ranbaxy moved 2.3% higher to Rs 368. Software heavy Infosys staged a solid intra-day recovery in the last half an hour of trade, advancing 0.1% to Rs 2,166.

L&T gained 2.2% to Rs 1,425, due to reports that L&T Infotech, on Wednesday, had struck an agreement to acquire US-based GDA Technologies Inc.

Glenmark Pharmaceuticals soared 7.8% to Rs 552.35, following the statement from the company on Wednesday that it had applied for clinical trials for a new pain-relieving compound to be launched in 2011.