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.

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.

Index heavy Reliance Industries lost 0.6% to Rs 1,208. Reliance Industries announces second-quarter results tomorrow.

Grasim dipped 1.7% to Rs 2,578. After trading hours, Grasim Industries posted stronger-than-expected second-quarter results. The net profit surged 80% to Rs 337.84 crore (Rs 187.65 crore), beating market forecasts.

Other news

Tata Steel, which has come out with an offer to buy out Anglo-Dutch steelmaker Corus, could be confronted with tough competition from Russian firms including Severstal, whose bid had complicated the takeover of Arcelor by Mittal Steel earlier this year.

Forecasting revenues of $500 million in the next five years, news broadcaster NDTV today announced major expansion plans involving a variety of new initiatives, including Hindi programming.

9:45AM Dow Jones Industrial Average broke through a historical peak of 12,000.
The Dow Jones Industrial Average hit the 12,000 mark for the first time in its history, boosted by upbeat economic data and earnings-inspired gains for Intel and IBM. The index topped the milestone right after opening, rising as high as 12,049.51. The Labor Department said that CPI for September fell a seasonally adjusted 0.5%, driven by a 7.2% drop in energy prices. Economists had been expecting a decline of 0.3%. Core CPI, excluding food and energy prices, rose 0.2%, in line with projections by economists. In early trading, significant strength emerged in the housing sector after a report showed an unexpected increase in September housing starts. The Commerce Department said that new homes construction unexpectedly rose 5.9%, the first increase since May. Economists had been expecting a 2% decline.

Among leading gainers, Intel (INTC: chart) rose 2.6% after chipmaker''s Q3 earnings report showed signs of recovery from serious problems. Shares of IBM (IBM: chart) jumped more than 5% on better-than-expected Q3 profit. In corporate news, shares of Motorola (MOT: chart) dropped 4.9% after reporting a 45% profit drop, reporting disappointing 17% sales rise. The company warned Q4 revenue also may miss estimates. Transportation stocks showed strength amid a decrease by the price of oil. Meanwhile, some semiconductor stocks came under pressure, with Novellus Systems (NVLS: chart) and Linear Technology (LLTC: chart) moving notably down after providing disappointing guidance. In midmorning trading, the Dow was up 61.31, or 0.51%. The Standard & Poor''s 500 index was up 4.63, or 0.34%, and the Nasdaq composite index gained 2.49, or 0.11%. Bonds rose, with the yield on the benchmark 10-year Treasury falling to 4.76% from 4.77% late Tuesday.

New construction spending rose 5.9%.
Wednesday morning, the Department of Commerce released its report on housing starts and building permits in the month of September. The report showed that housing starts increased unexpectedly, while building permits fell. The report showed that housing starts rose 5.9 percent to a seasonally adjusted annual rate of 1.772 million units in September from a revised August estimate of 1.674 million units. Economists had been expecting housing starts to fall to an annual rate of 1.650 million units compared to the 1.665 million unit rate originally reported for the previous month.

The increase in housing starts was largely due to a notable increase in housing starts in the South, which rose 14.0 percent in September. Housing starts in the Midwest rose 3.4 percent, while starts in the North fell 14.1 percent and starts in West fell 2.2 percent. Nonetheless, despite the increase, housing starts in September were still 17.9 percent below the September 2005 rate of 2.158 million units. The Commerce Department also said that building permits fell 6.3 percent to a seasonally adjusted annual rate of 1.619 million units in September from a revised August rate of 1.727 million units. Building permits are seen as an indicator of future housing demand.

Consumer prices fell more steeply than expected.
The Department of Labor released its report on consumer prices in the month of September on Wednesday, showing that prices fell more than economists had expected. Core prices increased in line with economist estimates. The report showed that the consumer price index fell 0.5 percent in September after edging up 0.2 percent in August. Economists had been expecting prices to fall by a more modest 0.3 percent. The decrease in consumer prices was due in large part to a steep decline in energy prices, which fell 7.3 percent in September after increasing 0.3 percent in August. The index for petroleum based energy fell 12.9 percent in September. The Labor Department also said that its core consumer price index, which excludes food and energy prices, rose 0.2 percent in September, matching the increase that was seen in each of the two previous months. The increase also met economists'''' expectations.

The modest increase in core prices came as a significant drop in transportation costs helped to offset increases in apparel, housing, and medical care prices. Transportation prices fell 4.1 percent in September due in part to the drop in energy prices. The report also showed that consumer prices rose at an annual rate of 2.1 percent in September compared to a 3.8 percent year-over-year increase in August. The slowdown in price growth comes as energy prices surged in September of 2005 due to the Gulf Coast hurricanes. At the same time, the Labor Department said that core consumer prices rose at an annual rate of 2.9 percent in September, up from the 2.8 percent annual rate of growth that was seen in the previous month. This marks the fastest pace of growth since February of 1996.

9:30AM Financial and mining stocks boost FTSE on Wednesday.
The FTSE 100 in London advanced 35.5 points, or 0.6%, at 6,144.3, in mid-afternoon trading on Wednesday.

Advancers

Rio Tinto was the early standout stock. Its shares gained 3%, following a strong third quarter production report. The rest of the sector tracked Rio higher. BHP Billiton gained 1.6%, while Vedanta added 1.6% higher and Antofagasta rose 1.4%.

Man Group was another stock, rising 3.3% supported by reports which claimed it had asked Merrill Lynch and Credit Suisse to work on a de-merger of its brokerage arm, Man Financial. PartyGaming, traded up 4.8%, and among the best performers on reports of a bid from a Las Vegas gaming company.