4:00PM Benign inflation data, rise in oil price and coup in Thailand topped investor sentiment.

-Yield on 10-year bond closed at 4.76% and 30-year bond closed at 4.88%.

-Crude oil dropped $2.14 to close at $61.66 per barrel and natural gas rose 12 cents to close at $5.065 per mBtu.

-Gold dropped $9.50 to close at $577.70 per ounce, silver dropped 34 cents to close at $10.94 and copper dropped 3.90 cents to close at $3.33755.

-Asian Markets closed lower across the region, however Philippines market surged 2.5% and Indonesia gained 0.8%. India dropped 0.8%, Singapore lost 0.5% and Hong Kong and Australia lost 0.3%. Thailand edged 0.5%, but in the late evening local hours military seized power in the country.

-European Markets closed lower led by 1% drop in the UK, 0.9% in Germany and Netherlands and 0.6% fall in France. Spain dropped 0.4% and Switzerland lost 0.3%.

-Latin Markets closed lower led by 1.6% decline in Brazil, 0.6% fall in Argentina and 0.03% drop in Mexico. Chile closed 0.4% higher. Canada fell 0.5% despite a rise in energy prices.

12:30PM European markets closed in the red.
European markets finished lowered, despite benign U.S. wholesale inflation data and earnings-inspired gains. Investors kept a close eye on economic data, looking ahead to the Fed Reserve’s decision on interest rates Wednesday. Bank of Ireland rose 1.6% on expectations to deliver an excellent performance in the current half-year and raised its earnings forecast. Among other gainers, oil giant BP gained 0.3% in London, while peer Total added 0.1%. In the auto sector, DaimlerChrysler lost 0.1% amid profit warning, while auto parts supplier GKN declined 4.3% after UBS downgraded the company following DaimlerChrysler''s warning. London FTSE 100 dropped 1%, followed by the German DAX 30, down 0.9%, and CAC 40, down 0.6%.

Oil prices pulled back on receding supply worries and signals of cooling energy market. Light crude October delivery fell 69 cents to $63.11 a barrel. Gasoline futures slipped over 6 cents to $1.55 a gallon. The U.S. dollar turned lower versus major currencies. The euro traded at $1.2710, up from $1.2705. The dollar bought 117.04 yen, up from 117.85. The British pound stood at $1.8873, up from $1.8808. European gold traded mixed. In London the precious metal traded at $578.60, down from $579.50 per ounce. In Zurich gold traded at $580.10, up from $578.90. Silver closed at $11, up from $10.53.

11:30AM Market averages lost direction ahead of Fed’s decision.
Stocks traded in a lackluster fashion Tuesday morning with investors looking ahead to the Federal Reserve''s decision on interest rates on Wednesday. Steeper-than-expected decline in housing starts weighed on market sentiment. On back of the weaker housing starts data, related retailers like Home Depot (HD: chart) slipped 10 cents to $36.14, while Lowe''s Co. (LOW: chart) fell 31 cents to $36.17. In company news, Napster (NAPS: chart) jumped 14.9% to $4.08 after the company said late Monday it hired UBS Investment Bank to ‘examine potential combinations,’ including a sale of the company. According to the opinion of analysts, companies like Amazon.com Inc., RealNetworks Inc. may take interest. DaimlerChrysler AG (DCX: chart) rose 13 cents to $49.31 after the company said its Chrysler Group will cut deliveries to dealers by 90,000 vehicles in Q3 due to falling sales of trucks and SUVs. While some weakness emerged in the gold, housing, and semiconductor sectors, the disk drive, computer hardware, and airline stocks moved to the upside. In late morning trading, the Dow Jones industrial average fell 17.29, or 0.15%. The Standard & Poor''s 500 index slipped 1.00, or 0.08%, and the Nasdaq composite index rose 0.37, or 0.02%. Bonds rose as stocks fell, with the yield on the 10-year Treasury note at 4.75%, down from 4.81% Monday.

10:30AM The Sensex dips in volatile trading due to profit-taking.
The Sensex on BSE shed 100.83 points, or 0.84%, to close at 11,970.47. The BSE benchmark index traded in a range of 237.40 points during highly volatile session. The market-breadth was positive for most part of the day, but turned negative as small and mid-cap sector stocks slumped. For 1,595 shares that declined on BSE, only 929 advanced and 62 stocks were unchanged. From the Sensex stocks 24 declined while only 6 advanced. Decliners beat advancers 1,582 to 924 on trade of 230 million shares. The turnover on NSE was Rs 7,518.14 crore.

Most active stocks

Mahindra Gesco was the most-active stock on BSE with a turnover of Rs 213.57 crore, followed by Tech Mahindra with Rs 200.08 crore and Reliance Communications with Rs 165.35 crore.

Decliners

Tata Motors led the decliners, plunging 3.61% to Rs 828, Cipla fell 2.82% to Rs 253, Maruti was down 2.81 % to Rs 915, Grasim fell 2.66% to Rs 2,430 and Gujarat Ambuja fell 2.63% to Rs 113. Marsons Ltd fell 2.6% to Rs 3 even after securing an order from ABB Ltd for supply of electrical equipment worth approx Rs 20 million for their project at DPL, Durgapur, West Bengal. Reliance Energy fell 2.78% to Rs 455.

ONGC slipped 0.65% to Rs 1,148. It announced on Tuesday that it was aggressively pursuing opportunities to import liquefied natural gas and intended to acquire petroleum assets in Kazakhstan and Cuba. Hindalco Industries fell 0.8% to Rs 166.75 after performing well during most of the day. PVR Ltd declined 0.4% to Rs 254.05 on announcing its expansion into smaller cities with the launch of the PVR Talkies.

Advancers

Satyam gained 1.74% to Rs 837.50, TCS advanced 1.02% to Rs 1,007, Dr Reddy’s rose 0.43% to Rs 758 and ICICI Bank edged up 0.05 % to Rs 645.05. Reliance Communications rose 0.66%, to Rs 328.85, on 49.51 lakh shares. It had dipped sharply from an intra-day high of Rs 341.50, due to heavy selling.

Other news

Oil minister Murli Deora stated on Tuesday that fuel retailers in Maharashtra have agreed to withdraw their strike called to demand a cut in sales tax.