13:00PM European shares closed higher.
European stock markets erased early losses to finish in the positive territory, boosted by deal news and strength in the transport sector. A strong rally on Wall Street and a new all-time high for Dow Jones also contributed to the upside move. The gains followed news that Wal-Mart will cut capital spending to drive overall returns. In the currency markets, the U.S. dollar gained versus both the euro and the British pound on speculation the Fed Reserve may that interest rates need further tightening. Across the region, the German DAX 30 rose 0.6%, supported by deal speculation. Techem rose more than 16% after the company reportedly received an acquisition offer from Australian investment bank Macquarie Bank, which it later rejected. In other M&A news, German steelmaker ThyssenKrupp said it is not considering a bid for Anglo-Dutch steelmaker Corus Group. The French CAC 40 gained 0.7%, helped by airline Air France-KLM which rose 2% on falling oil prices. London FTSE 100 closed up 0.2%, helped by gains in Standard Chartered on speculation that Dubai''s state-owned investment company was considering raising its stake in the Asian-focused bank. Losses at oil companies like BP and royal Dutch Shell helped limit gains.

Crude oil steeply dropped amid doubts over OPEC oil production cuts. Crude oil tumbled $1.12 to $58.21 a barrel. London Brent dropped $1.08 to $58.60. The U.S. dollar traded higher against its rival currencies. The euro was quoted at $1.2540, down from $1.2620. The dollar bought 119.29 yen, up from 118.65. The British pound stood at $1.8699, down from $1.8843. European gold prices further dropped. In London, gold traded at $584.20 per troy ounce, down from $594.30. In Zurich the precious metal was traded at $584.23, down from $594.15. Silver traded at $11.66, down from $11.89.


11:30AM The Dow hit a new all-time high, helped by Wal-Mart.
U.S. stocks rallied in late Monday trading, recovering from earlier weakness. The three major market averages moved higher, with the Dow Jones hitting a new trading high on the back of news that Wal-Mart Stores will cut capital spending in order to drive overall returns. Wal-Mart (WMT: chart) said it plans to bring costs in line with a slowdown in its sales and earnings growth. Through this move the return on investment is expected to improve. The world''s largest retailer said it will be more selective about the location of new stores, but still plans to open 600 new stores next year. The Dow component rose 5%.

Gains posted by Altria (MO: chart), International Business Machines (IBM: chart), and 3M (MMM: chart) also contributed to the positive mood. By sector, retailers advanced, boosted by rallying Wal-Mart. Drugs stocks came under pressure as shares of Forest Laboratories Inc. (FRX: chart) dropped 4% on news that its partner Replidyne Inc. (RDYN: chart) had received a non-approvable letter from the FDA for their new antibiotic drug candidate faropenem medoxomil. Energy stocks posted losses together with the crude oil price. At the same time, airline stocks moved higher, benefiting from the retreating oil price. Alaska Air Group (ALK: chart) was a notable gainer, rising 2.4%. On the corporate news front, Ripplewood Holdings LLC is reportedly preparing a $10 billion bid for bankrupt auto parts maker Delphi Corp. (DPHIQ: chart), sending its stock up 6.2%.

In the mid morning trading, the Dow Jones industrial average rose 74.20, or 0.62%, to 12,076.57. Blue chips passed 12,000 for the first time last week. The Standard & Poor''s 500 index rose 6.57, or 0.48%, to 1,375.17, and the Nasdaq composite index rose 18.71, or 0.80 1.05%, to 2,361.01. Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.83% form 4.79% on Friday.


10:30AM The Sensex sheds 114 points on Monday due to profit-taking.
The Sensexon BSE finished 113.54 points, or 0.89% lower at 12,623.28. The market-breadth was negative. For 1,433 shares that declined, 978 advanced on BSE and 58 shares were unchanged. From the Sensex stocks, 23 declined while the rest advanced. The turnover on BSE was Rs 2,409 crore, much lower than Rs 3,330 crore on Friday. The turnover on NSE was Rs 5,104.73 crore.

Economic news

The government indends soon to lift a ban on sugar exports imposed in July after an increase in domestic prices, a senior government official announced on Monday.

Decliners

ICICI Bank led the decliners, down 2.21% to Rs 721.55. ICICI Bank announces second-quarter results tomorrow. Hindalco Industries shed 2.03% to Rs 183.55, Cipla lost 2% to Rs 257.45 and ITC sank 2.17% to Rs 184.50.

Tata Steel lost 1.44% to Rs 508.65. The company was approved on Friday by Anglo-Dutch firm Corus Group for its 4.3 billion pound ($ 8.04 billion) takeover bid. Other metal stocks also declined. SAIL lost 2.2% to Rs 88.60, Hindustan Zinc shed 2.51% to Rs 776.30, Sesa Goa lost 1.95% to Rs 1,077 and Jindal Saw finished 1.39% lower to Rs 363.

IT shares declined due to profit taking after a recent advance. Infosys shed 1.36% to Rs 2046, Satyam Computer edged down 1.08% to Rs 425.55, TCS declined 1.24% to Rs 1,078.50 and Wipro slipped 1.57% to Rs 545.55.

Ranbaxy lost 1.13% to Rs 410.45. It signed licensing agreement with Swiss Company Debiopharm, for NCE Drug in the Gastroenterology Segment. India Cements lost 0.36% to Rs 220, after reaching a high of Rs 224.90. The company posted a 1,905% surge in net profit for second-quarter September 2006 to Rs 117.32 crore as compared to Rs 5.85 crore in second-quarter September 2005. Reliance Industries dipped 0.52% to Rs 1,195.55 on 5.65 lakh shares.

Advancers

Bajaj Auto led the advancers, up 1.93% to Rs 2,815 on 1.76 lakh shares. The stock plunged 12% last week, after its net profit for the quarter ended September 2006 missed expectations due to margins under pressure.

HDFC Bank edged up 1.06% to Rs 971.40, Maruti Udyog rose 0.31% to Rs 943.50 and ACC gained 0.35% to Rs 978.

Sugar stocks were in focus, on market talks that the ban on export of sugar would be lifted soon. Monnet Sugar surged 12.70% to Rs 78.10, KM Sugar gained 5.69% to Rs 56.15, Triveni Engineering edged up 1.64% to Rs 71.45, Balrampur Chini Mills jumped 4.50% to Rs 113.75, Dwarikesh Sugar added 3.12% to Rs 162, Bajaj Hindustan moved up 3.60% to Rs 345.10.

Other news

Severstal, the biggest steelmaker in Russia, has abandoned the idea of making a bid for Corus, pushing up the probability that the takeover offer from the Anglo-Dutch company by Tata Steel of India will succeed.