12:00PM European shares dropped on higher oil, LMVH and Roche.
European stock markets retreated from recent gains to close lower Tuesday as higher oil prices dragged auto and transport stocks down, while luxury-goods retailer LVMH and drug maker Roche Holdings declined after posting sales. Inflation fears on Wall Street also hurt market sentiment. The German DAX 30 finished down 1.2%, led by airline Deutsche Lufthansa, down 2.9%, and banking group Commerzbank, falling 2.5%. Investors also weighed the ZEW survey of business sentiment which was the lowest since March 1993. The French GAC 40 ended lower by 1.1% as luxury goods maker LVMH Moet Hennessy closed down 2.4% as sales and revenue figures came in line with estimates. Roche sales rose 19%, but shares fell 1%. Group Danone added 1.6% after it said Q3 sales rose 9.5% on a comparable basis. Higher oil prices supported the heavily commodity-weighted FTSE 100. The U.L. index closed down 1%, with oil major BP rising 0.3%.

The U.S. dollar traded lower against its rival currencies. The euro was quoted at $1.2542, up from $1.2531. The dollar bought 118.78 yen, down from 119.11. The British pound stood at $1.8707, up from $1.8612. European gold prices also declined. In London, gold traded at $587.20 per troy ounce, down from $592.55. In Zurich the precious metal was traded at $587.05, down from $592.95. Silver traded unchanged at $11.50.


11:30AM Stocks traded lower. CME agreed to acquire CBOT for $8 billion.
Stock averages came under pressure at the start of trading on Tuesday, with the Dow moving firmly into negative territory after setting another new record closing high on Monday. The market weakness was sparked by inflation data which raised some concerns about the possibility of higher interest rates. Investors also weighed quarterly earnings releases. Merrill Lynch (MER: chart) lost 0.3% after it reported Q3 profits more than double. United Technologies (UTX: chart) fell 2%, despite reporting better-than-expected quarterly earnings. Johnson & Johnson (JNJ: chart) gained 1.7% on strong Q3 profit. Chicago Mercantile Exchange Holdings (CME: chart) agreed to acquire rival exchange CBOT Holdings (BOT: chart) for more than $8 billion in a deal that combines the two largest U.S. futures exchanges. The transaction values CBOT at $151.27 per share, a 16.7% premium to its closing price on Monday and nearly triple the value of CBOT shares when the exchange went public a year ago. CBOT shares surged 12%, while CME shares rose 2%.

In sectors, some gold, networking, and transportation stocks posted substantial losses. Some biotechnology stocks limited the downtrend, with InterMune (ITMN: chart) and Icos (ICOS: chart) posting strong gains. Utilities stocks also moved higher over the course of the morning. In midmorning trading, the Dow gave up 80.13, or 0.67 percent, falling to 11,900.47. The Standard & Poor''s 500 index was down 9.30, or 0.68%, and the Nasdaq composite index fell 31.20, or 1.32%.


10:30AM The Sensex retreats on Tuesday on profit-booking.
The Sensex on BSE finished 44.35 points, or 0.34% lower, at 12,883.83. The market-breadth was negative throughout the day due to selling pressure in small-caps and mid-caps stocks. There were almost two decliners for each advancer on BSE. For 1,629 shares that declined, only 843 advanced and 68 shares remained unchanged. From the Sensex-stocks, 18 declined while the rest advanced. The turnover on BSE was Rs 3,678 crore, higher than Rs 3,480 crore on Monday. The turnover on NSE was Rs 6,875.83 crore.

Merger and acquisition

Corus confirmed on Tuesday that it had received a 455p a share cash offer proposal from Tata Steel of India that values the Anglo-Dutch steelmaker at 4.1 billion pounds.

Economic news

The World Investment Report 2006, released by the United Nations Conference on Trade and Development (UNCTAD) indicates that the growing importance of South, East and South-East Asian region has contributed to continued increase in foreign direct investment inflows in these economiesThere is a sustained rise in flows to South and South East Asia. FDI flows to India were up 21%.

Advancers

Satyam Computers led the advance, up 3.37%, to Rs 450.90. The company will announce its September quarter results on 20 October 2006. Hero Honda advanced 1.94% to Rs 760.75, BHEL gained 1.85% to Rs 2,460 and Wipro edged up 0.89% to Rs 575.45.

Index heavy Reliance Industries recovered from a low of Rs 1,205, to end 0.45% higher, at Rs 1,218.80.

Metal stocks advanced on expectations of steady prices. Hindustan Zinc surged 10.27% to Rs 823.80, after zinc futures rallied 4.5% on the London Metal Exchange on Monday. Sterlite Industries was up 1.06% to Rs 483, SAIL surged 4.32% to Rs 85.80, Ispat Industries gained 2.24% to Rs 11.42 and Hindlaco notched up 0.71% to Rs 183.55.

Tata Steel advanced 0.57% to Rs 514.25, on reports that the company was expected to make a $9 billion bid for Anglo-Dutch steel maker Corus Group. The formal announcement on the deal will be made probaby by end-October.

HCL Technologies surged 4.20% to Rs 609, after its Q1 September 2006 consolidated net profit jumped 49.40% in comparison with last year the same period, as per US GAAP, to Rs 250.20 crore. The net profit was within market expectations.

Decliners

HDFC Bank led the declineers, down 3.22% to Rs 1,013, despite reporting stronger-than-expected second-quarter results. HDFC Bank reported 31.7% growth in net profit for second-quarter September 2006, to Rs 262.94 crore. The net profit beat market expectations.

HDFC was down 2.83% to Rs 1502, Hindustan Lever plunged 2.11% to Rs 232 and NTPC declined 2.40% to Rs 128.