[R]4:00 Rising oil price sparks a global sell-off.[/R]

-Nasdaq dropped 36.12 points, Dow lost 166.89 and S&P 500 16.32.
-Yield on 10-year bond closed at 5.09% and 30-year bond closed at 5.13%.
-Crude oil rose to $1.75 to close at $76.70 per barrel.
-Gold gained $3.20 to close at $654.40 per ounce.

-Asian Markets declined across the region, led by 2% decline in Thailand and 1% loss in Taiwan, Hong Kong and Singapore.
-Major European Markets closed lower, led by 2% decline in Germany, 1.8% loss in France and 1.6% in U.K. South Africa lost 3% and Russia declined 4.1%.
-Latin American Markets declined across the region. Argentina and Mexico lost more than 3% and Brazil declined 2.4%.

Oil climbed to a near record high of near $77 per barrel on attack on pipeline in Nigeria, Israel’s overly aggressive response to a single soldier kidnapping, continued stand-off between Iran and Western powers and steady demand for oil from the U.S. and China. Rising tensions in the Middle East fueled by soldier kidnapping and Israle’s aggressive military response and widening war with Lebanon, Syria and Palestine contributed to the oil price escalation. Restraint is lacking on Arab and Israel side in the region, destabilizing the world oil prices.

While oil price climbed, natural gas price declined as the latest government report suggested that the supply rose more than expected in the last week.

Technology, consumer staples, retails, financial services led the decliners. Ford Motor Co. (F: chart) cut its dividend and board members fees by half. The move is expected to save the company $92 million per quarter. Ford shares declined 29 cents or 4% and traded at a new ten-year low.

European stocks declined across the region on sharp rise in crude oil price. SAP, German software maker (SAP: chart) declined 6% in New York and Frankfurt trading on the news that license revenue for the quarter will be lower by 50 million euros. In other earnings news L’Oreal gained 0.8% on the earnings news and revenue rise of 8.7% but insurance sector declined after British insurer Aviva issued $1.7 billion shares to fund $2.9 billion purchase of AmerUs.

Mexican Presidential election uncertainties, global market sell-off and rising oil prices forced market lower. The IPC index lost 3.2% at close. Large cap stocks declined led by American Movil (AMX: chart) down 2.5%, home builder Homex (HXM: chart) down 2.6% and Cement maker Cemex (CX: chart) down 2%. Brazilian stocks declined as oil price rose sharply in the international markets. Brazilian stocks declined for the second week in a row led by a decline in mining, telecom and banking stocks. CVRD (RIO: chart), the iron ore mining giant, declined 4%, Banco Bradesco (BBD: chart) and Banco Itau (ITU: chart) lost 3% in New York trading.


[R]12:30PM European markets closed sharply down.[/R]
European markets ended sharply down Thursday on renewed concerns over the strength of Q2 earnings, following warning from SAP and surging oil prices to record highs. The German business software giant, dropped 6.2% after the company said that license revenue will grow 8% to 621 million euros, well below expectations of license revenue of 675 million euros. Crude oil futures climbed over $76 a barrel on supply worries, related to increasing violence in the Middle East and Nigeria. Technology, mining, and insurance stocks stood out among decliners. Britain''s largest insurance company Aviva dropped 3.2% after selling $1.7 billion in shares to finance its $2.9 billion acquisition of U.S. insurance company AmerUs. The German DAX 30 tumbled 2%, the French CAC 40 slipped 1.8%, and London FTSE 100 dropped 1.6%.


Oil prices climbed over $76 amid escalating violence in the Middle East, the standoff with Iran over its nuclear program and news of explosions on Nigerian pipelines. Light crude August delivery rose $1.30 to $76.25 a barrel. Gasoline futures gained 3 cents to $2.29 a gallon, while heating oil was up 3 cents to $2.0527. Natural gas futures climbed 10 cents to $5.880 per 1,000 cubic feet. London Brent surged $1.14 to $75.53. The dollar traded mixed versus major currencies. The euro traded at $1.2690, down from $1.2699. The dollar bought 115.24 yen, down from 115.52. The British pound stood at $1.8428, up from $1.8334. European gold prices declined. In London the precious metal traded at $645.50, down from $653.40 per ounce. In Zurich gold traded at $647.95, down from $653.95. Silver closed at $11.39, down from $11.71.


[R]11:30AM Stock markets traded down.[/R]
Stock markets continued to post weakness on bargain hunting and concerns about increasing geopolitical tensions. Escalating violence in the Middle East, the stand-off over Iran''s nuclear program, and North Korea’s unwillingness to agree to disarmament talks weighed on sentiment. The news contributed to a significant increase by the price of oil to the record $76.30 a barrel. As a result, airline stocks moved to the downside on worries about the impact of higher fuel costs. Gold stocks came under pressure on Thursday, with the Amex Gold Bugs Index down 2.4%. The brokerage sector moved notably to the downside, sending the Amex Securities Broker/Dealer Index down 1.6%.

At the same time, the utilities sector showed some strength, with Duke Energy (DUK: chart), Exelon (EXC: chart), and PSEG (PEG: chart) turning in some of the sector''s best performances. In late morning trading, the Dow slumped 105.01, or 0.95%. The Standard & Poor''''s 500 index was down 9.34, or 0.74%; the Nasdaq composite index dropped 19.95, or 0.95%. Bonds continued gaining, with the yield on the 10-year Treasury note sliding to 5.09% from 5.1% late Wednesday.


[R]10:30AM Indian benchmark Sensex dips in weak trading.[/R]
The Sensex in India lost 71.59 points, or 0.65%, to close at 10,858.50. The turnover on BSE was $550 million or Rs 2,512 crore, down from Wednesday’s $600 million or Rs 3,130 crore. The market-breadth was positive as 1,294 shares advanced, 1,085 declined and 78 shares were unchanged. Advancers were led by Hidustan Lever which advanced 2.72% at Rs 243.95, Grasim rose 2.05% at Rs 2,038.00, ICICI Bank gained 1.73% at Rs 497.00, Cipla advanced 1.62% at Rs 226.00 and Hindalco climbed 1.25% at Rs 181.90.

The decliners were led by Infosys, Bharti Airtel, Wipro, HDFC Bank and Reliance. Reliance Industries lost 2.4%, to Rs 1,071 following reports that the petroleum ministry has rejected the company’s request for reimbursement of Rs 2,570 crore due to losses suffered in export sensitive petroleum products. Bharti Airtel was off 2% to Rs 375.

IT shares aslo declined in sympathy with declines ADR trading in New York. Wipro declined 2.6%, to Rs 503, TCS sank 1.2%, to Rs 1,870 and Satyam Computer down 0.8%, to Rs 744. Infosys closed at Rs 1,675 down from Wednesday’s closing price of Rs 3,386.45. The stock traded on a split adjusted basis..

High oil prices pulled auto shares down. Hero Honda lost 2.2%, to Rs 707, M&M declined 2.9% to Rs 593, Tata Motors sank 0.5% to Rs 766.85, and Bajaj Auto shed 2% to Rs 2,692. Car maker Maruti Udyog was down 1.4%, to Rs 802.