12:00PM European shares rebounded, helped by rally on Wall Street.
European stock markets rebounded Wednesday on the back of broad-based gains after The Dow Jones Industrial Average broke through the historical level 12,000. The U.S. market rallied on strong quarterly results from Intel and IBM. In the European tech sector, IT services company Cap Gemini jumped 2% and SAP advanced 0.6%. Mining companies also posted strength, with Antofagasta, BHP Billiton, and Rio Tinto rising amid higher gold and copper prices. Among other gainers, shares of Air France-KLM closed higher by 1.9% on oil price decline. The German DAX 30 climbed 1.1%, the French CAC 40 rose 1.1%, and London FTSE 100 added 0.7%.

Crude oil was volatile after weekly government’s report showed that crude inventories advanced, but gas and distillates stockpiles declined. Oil lost 18 cents to $58.75 a barrel. The U.S. dollar recovered against its rival currencies. The euro was quoted at $1.2508, down from $1.2546. The dollar bought 119.14 yen, up from 118.89. The British pound stood at $1.8667, down from $1.8704. European gold prices also gained ground. In London, gold traded at $592.80 per troy ounce, up from $587.20. In Zurich the precious metal was traded at $592.65, up from $587.05. Silver traded at $11.81, up from $11.50.


11:30AM The Dow retreated from record highs. The semiconductors dropped.
U.S. stocks turned mixed after an early rally, sparked by upbeat data and solid earnings reports from Intel Corp. and IBM. The two blue chips lifted the Dow above the historical 12,000 mark for the first time. The Labor Department data also contributed to the rally after reporting lower consumer prices in September. The 30-stock index has risen over 300 points in October as oil prices fell below $60 a barrel and speculations that the economy was headed for a soft landing after two years of interest-rate hikes.

Intel (INTC: chart) gained 1.3%, IBM (IBM: chart) traded 4% higher, but semiconductors fell sharply as gains were offset by a disappointing orders and sales outlook from chip-equipment maker ASML (ASML: chart) which sent the stock down 6.8%. Novellus Systems (NVLS: chart) also weighed, falling 6% amid disappointing revenue outlook. Networkers and computer-hardware stocks also declined. Pharmaceutical companies posted a solid advance, helped by strong earnings from Abbott Laboratories (ABT: chart).
Among other companies in focus, Yahoo (YHOO: chart) erased early gains to trade down 1.5%. Motorola (MOT: chart) dropped 4.9% after reporting a 45% profit drop and a below-forecast 17% sales rise, and warning that Q4 revenue may miss estimates. In late morning trading, the Dow was up 30.26, or 0.25%. The Standard & Poor''s 500 index was up 0.60, or 0.04%, at 1,364.65, and the Nasdaq composite index fell 8.33, or 0.36%. Bonds showed little movement, with the yield on the benchmark 10-year Treasury flat with 4.77 percent from late Tuesday.


10:30 AM Plunging stocks of Bajaj Auto push the Sensex lower on Wednesday.
The Sensex on BSE finished 25.35 points, or 0.2% lower, to settle at 12,858.48. The market-breadth turned negative in the later trading after being positive till the first half of the trading session. For 1,271 shares that declined on BSE, 1,195 advanced and 73 shares were unchanged. Decliners outpaced advancers by 10:9. The turnover on BSE was Rs 4,035 crore, higher than Rs 3,806 crore on Tuesday. The turnover on NSE was Rs 7,997.28 crore.

Economic news

Prime Minister Manmohan Singh said on Wednesday the government was aiming to achieve 10% annual GDP growth by the year 2011/12.

Indian Prime Minister Manmohan Singh also stated at a seminar organised by the Federation of Indian Export Organizations that a high-level group in the Planning Commission of the country will be created to consider all issues concerning the service sector to enhance India''s competitiveness in the coming years.

In focus

Bajaj Auto plunged 7% to Rs 2,900, due to a fall in margins despite revenue growth remaining strong.

Advancers

Pharma large-caps advanced. Ranbaxy gained 3% to Rs 424, and Dr Reddy’s Lab rose 2.7% to Rs 735. Some second-tier pharma surged. Glenmark Pharma soared nearly 18% to Rs 389.35, after Germany Merck licensed a diabetes drug to the Indian firm.

Some banks also advanced. ICICI Bank gained 2.4% to Rs 742 and SBI rose 1.1% to Rs 1,045. L&T rose 1.5% to Rs 1,309 ahead of Q2 results scheduled tomorrow. Yes Bank moved higher 3.4% to Rs 106, as the private sector lender announced it will issue 10 million shares to Swiss Reinsurance Company at Rs 120 per share.

Some sugar shares jumped. Balrampur Chini Mills surged 10% to Rs 110.35 and Bajaj Hindustan gained 7% to Rs 340.

Decliners

Bajaj Auto pulled other auto stocks lower. Hero Honda shed 1.4% to Rs 747, TVS Motor lost 1.7% to Rs 121, car large-cap Maruti Udyog declined 1.2% to Rs 948 and Tata Motors lost 1% to Rs 890.55.

Wipro sank 3% to Rs 557, despite strong second-quarter results as the company announced that wage hike will impact margin by 2% in Q3 December 2006. Wipro second-quarter earnings rose 48%.

Tata Steel shed 1.2% to Rs 509.35, after Standard & Poor’s placed it on credit watch with negative implications, following the offer of $7.6 billion of the company for the entire stake of Anglo-Dutch steelmaker Corus.