BAE Systems fell 2% after the defence group announced plans to raised 750 million pounds to finance the 2.3 billion pounds acquisition of Armor Holdings of the US.

Insurer Standard Life reported a better than expected 40% rise in first quarter sales Tuesday, with growth being driven by strong UK sales of life and pensions business in the UK. The shares of the company 0.2%.


[R]9:00AM U.S. stock futures traded lower on interest rate concerns.[/R]
U.S. stock futures indicated a lower opening Tuesday, hurt by cautiousness ahead of the Fed Reserve''s interest rate policy decision on Wednesday. On the economic news front today, March wholesale inventories figures are due out after the open. Another drag on the pre-market sentiment was Motorola (MOT: chart) which lost 2.1% after it said its shareholders re-elected the company''s board but didn''t elect Icahn who failed to receive support from major investment funds.

Among other pre-market highlights, AK Steel (AKS: chart) soared 19% in the pre-open amid reports that Arcelor Mittal is in talks to buy the U.S. steel producer in a $4.5 billion. Again in M&A action, Reuters (RTRSY: chart) and Thomson (TOC: chart) confirmed deal talks, releasing details of the possible merger worth $17.4 billion in cash and stock. S&P 500 futures lost 4.80 points to 1,509.50 and Nasdaq 100 futures dropped 8.50 points to 1,898.25. Dow industrial futures shed 36 points to 13,304.


[R]8:30AM Asian markets decline Tuesday with only China bucking the trend and advancing.[/R]

Asian markets mostly declined Tuesday. The 225-issue Nikkei Average in Japan closed 0.1% lower at 17,656.84. Investors took to profit taking on Honda and other large-cap stocks tracking strong gains in the session on Monday after an extended holiday break. Mitsubishi Heavy Industries advanced 1.6%, while Japanese banking shares gained on a rating upgrade by Moody''s. Mitsubishi UFJ Financial Group added 2.3%, while Mizuho Financial Group and Sumitomo Mitsui Financial Group both advacned 1.9%. Export-related shares were mostly lower, as Sony traded unchanged, and Canon retreated 0.4%. Auto shares dipped with Honda Motor shedding 0.5% and Toyota Motor falling 0.4%.

The Shanghai Composite in China reached 3,950.01 following an extended week-long holiday break. Property developers and retailers were in focus on a rise in revenue during the week-long Labor Day holiday which pushed China shares to a record high. Retailers and property developers gained as sales picked up during long holidays. Property developer China Vanke hit the 10% upside limit and Poly Real Estate also surged 10%.

Australian S&P/ASX 200 set an intraday record of 6,341.1 early in the session, but retreated 0.5% to end at 6,301.00. Shares of Australian carrier Qantas Airwayspulled the market lower, falling 3% after the consortium bidding 11 billion Australian dollars, or $9.08 billion, for Qantas conceded that its bid for the airline had failed. BHP Billiton fell 1.3%, while Rio Tinto declined 1.7%.

Hong Kong Hang Seng Index finished 0.9% lower to 20,706.35, a day after finishing at a record high. South Korean Kospi was little changed, declining 0.1% to end at 1,582.65 and Taiwan Weighted Price Index lost 0.2% to end at 8,095.84.


[R]8:15AM Reuters and Thomson confirmed merger talks.[/R]
Reuters Group (RTRSY: chart) and Thomson Corp. confirmed on Tuesday that they are in takeover talks, releasing details of the proposed deal which values Reuters at $17.7 billion. On Friday, Reuters said that it had received a bid offer, which sent the media company''s stock 25% higher. Thomson announced Monday that it had launched the bid.

According to the agreement, Thomson would offer 0.16 of its own shares and 352.5 pence in cash for each share in Reuters, which at Monday''s prices would value the company at 697 pence a share, or 8.76 billion pounds ($17.4 billion).

The Thomson family holding company, Woodbridge, would hold 53% of Thomson-Reuters, other Thomson shareholders would control 23% of the combined company and other Reuters shareholders would combine 24% of the firm. The companies would be joined into a single firm called Thomson-Reuters. The Thomson Financial unit would be combined with Reuters financial and media businesses into a single unit under the Reuters name. The combined firms expect $500 million in annual synergies in three years.


[R]8:00AM NY-7:00PM Mumbai Sensex finishes lower on weakness in IT, banking stocks.[/R]

The Sensex on BSE finished 113.79 points, or 0.82%, lower at 13,765.46.

The market-breadth was very weak as there were two decliners for each advancer. As 873 stocks advanced, 1,692 stocks declined and 70 stocks remained unchanged. Of the 30 stocks in the Sensex, only four stocks advanced, 25 stocks declined and one remained unchanged. The turnover on BSE was Rs 4,261 crore, compared to Rs 4,497 crore on Monday. On NSE, the turnover was Rs 9,549.68 crore, higher than Rs 8,657.72 crore on Monday.

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