[R]11:30AM Market averages traded lower on inflation concerns.[/R]
U.S. stock market averages traded lower, pressured by stronger-than-expected wholesale inflation and disappointing Intel results which outweighed strong industrial production report. Shares of Intel (INTC: chart) were the heaviest drag on the market sentiment, falling 5% on 40% profit drop in Q4. The chip maker also said that gross margins would not improve in 2007. Even J.P. Motgan (JPM: chart) and Mellon Financial (MEL: chart) gave up early gains and weighed on the Dow, losing 0.4% and 0.7%, respectively. Shares of Apple (AAPL: chart) slipped 1% ahead of earnings release after market close.

On a positive note, again in the tech sector, Sony Ericsson (SNE: chart) added 1.4% as it reported a stronger-than-forecast profit after taking market share from Motorola. (MOT: chart) and Samsung. A positive sentiment for the broad market was generated by rising energy shares, as crude oil prices slightly rebounded. Chevron Corp. (CVX: chart) added 1.2%, Hess Corp. (HES: chart) rose 1.4%, while Valero Energy (VLO: chart) climbed 2%. Homebuilders were supported by Lennar (LEN: chart) which rose 3.9% after its CEO said the company would perform better in 2007. The homebuilder swung to a Q4 loss from a profit last year. Among other movers to the upside, consumer products maker Procter & Gamble Co. (PG: chart) rose 1% after Goldman Sachs raised its rating on the stock.

In late morning trading, the Dow Jones industrial average fell 7.45, or 0.06%, to 12,575.14, pulling back after hitting a new all-time trading high of 12,587.64 earlier in the session and after three straight days of record closes. The Standard & Poor's 500 index rose 0.45, or 0.03%, to 1,432.35, and the Nasdaq composite index fell 4.66, or 0.19%, to 2,493.12. Bond prices edged lower after the PPI data. The yield on the benchmark 10-year Treasury note rose to 4.76% from 4.75% late Tuesday.


[R]10:30 AM NY-9:30PM Mumbai The Sensex edges higher on banks rally.[/R]
The Sensex on BSE closed 16.61 points, or 1%, higher at 14,131.34. The market-breadth was strong as there were three advancers for every two decliners. For 1,608 shares that advanced, 1,054 declined, and 56 remained unchanged. Of the 30 stocks in the Sensex, 15 advanced, while the rest declined. The turnover on BSE was Rs 4,719 crore, compared to Rs 4,068 crore on Tuesday. On NSE, the turnover was Rs 8,766.02 crore, higher than Rs 8,342.69 crore on Tuesday.

Economic news

The Government will give more rights to the Forward Market Commission in the forthcoming Budget to improve the regulatory mechanism in the commodity futures trading, the Minister of State, Prithviraj Chavan announced today.

Trading highlights

Wipro Ltd., the third-largest software company in India, reported profit that beat analysts'' estimates, boosted by acquisitions and orders from banks and retailers. Net income increased 40% to Rs 745 crore, or $169 million, in the three months ended Dec. 31. Sales grew 43% compared to a year ago.

Most-active stocks

Tech Mahindra was the most-active stock with a turnover of Rs 476 crore followed by Infosys, 3i and IFCI.

Advancers

ICICI Bank led the advancers, rising 2.74% to Rs 986, on a volume of 2.21 lakh shares. The largest commercial bank in India, State Bank of India gained 1.14% to Rs 1,223. Other banking stocks also gained, including Bank of India rising 0.12% to Rs 202.30, Punjab National Bank, up 1.50% to Rs 526, Kotak Mahindra Bank adding 1.98% to Rs 431, Oriental Bank of Commerce 3.94% higher to Rs 230.,

Reliance Communications surged 2.63% to Rs 441.70, hitting an intra-day high of Rs 445.45. Engineering leader L&T rose 2.29% to Rs 1,555. The company has convened a board meeting on January 29, to analyze financial results for Q3 ended December 2006. NTPC gained 1.25% to Rs 139.60, Dr Reddy’s ended 0.98% higher to Rs 817 and Reliance Energy advanced 0.66% to Rs 536.

Second-tier IT stocks surged. CMC soared 17.52% to Rs 1,227.35, extending its rally after Q3 results. Tech Mahindra jumped 8.80% to Rs 1,967 and Rolta India soared 9.20% to Rs 305.90. i-flex solutions gained 6% to Rs 2,152.75, after the company stated that People’s Bank in Bridgeport, Connecticut, USA has selected the core banking solution, Flexcube, of the company for its core deposits system replacement.

Index heavy Reliance Industries gained 0.26% to Rs 1,350.45, on a volume of 5.89 lakh shares. It will announce the December quarter results on Thursday, January 19.

Decliners

HDFC Bank led the decliners, down 3.52% to Rs 1,057.30, ONGC was also down 2.92% to Rs 893, on global weakness in oil futures, TCS declined 1.72% to Rs 1,305 and ITC lost 1.52% to Rs 169. Infosys Technologies shed 0.62% to Rs 2,203.15. The trading volume on the stock surged on earnings news, lifted by a block deal of 5 lakh shares on BSE. Wipro, which posted a 41% rise in Q3 net today, ended 0.82% lower at Rs 631.60.


[R]9:45AM Market opened below the flat line, as stronger-than-expected PPI weighed.[/R]
Wall Street opened below the flat line Wednesday, as a higher-than-expected PPI sparked interest rate worries in the market. The Labor Department said that wholesale prices rose by 0.9% in December, raising concerns that the Fed Reserve might raise interest rates to curb inflation. Investors also weighed another wave of earnings reports that showed strength in some sectors and weakness in others. JPMorgan Chase & Co. (JPM: chart) and Mellon Financial Corp. (MEL: chart) reported better-than-anticipated Q4 results, boosting confidence in the financial services industry. The airline sector also posted strength after the parent of American Airlines said it earned a narrow profit in Q4. AMR (AMR: chart) said it earned $17 million, or 7 cents per share, compared to a loss of $600 million, or $3.46 cents per share a year ago. Analysts had expected AMR to announce a loss of 13 cents per share.