1:00PM European markets closed down, dragged by pharmaceuticals.
European stock markets rebounded from yesterday’s gains to close down, reflecting cautious trading amid the election victory of the U.S. Democrats. Drug stocks were among the biggest losers on fears that if the Democrats win both the House and the Senate, they might enforce lower drug prices, which could pressure the drug industry. AstraZeneca slipped 2%, GlaxoSmithKline dropped 1.6%, Novartis fell 1%, while Roche lost 0.5%. In earnings news, European defense giant and Airbus owner EADS swung to a Q3 net loss of 195 million euros on charges. However, the stock rose 3.2% as the company confirmed it expects sales of well above 37 billion euros in 2006. EADS swung to a Q3 net loss of 195 million euros on charges. Shares in German retailer KarstadtQuelle rose 2.7% on narrower quarterly loss. The two leading European automakers traded mixed on CEO shake-ups. Peugeot rose 1.8%, while Volkswagen slipped 1.5%. The German DAX 30 fell 0.2%, London FTSE lost 0.1%, while the French CAC 40 was flat at 5,437.10.

Crude oil climbed back above $60 a barrel on weaker gasoline and diesel fuel inventories. Crude oil December contract rose $1.20 to $60.16 a barrel. Gasoline added 5 cents to $1.5720 a gallon, while heating oil rose 4 cents to $1.7215. Natural gas futures gained 8 cents to $7.83 per 1,000 cubic feet. The U.S. dollar gained ground against its rival currencies. The euro was quoted at $1.2759, down from $1.2771. The dollar bought 117.86 yen, up from 117.68. The British pound stood at $1.9028, down from $1.9055. European gold prices declined. In London, gold traded at $623.60 per troy ounce, down from $625.75. In Zurich, the precious metal traded at $623.23 per ounce, down from $624.65. Silver closed at $12.62, up from $12.61.


11:30AM Drug companies Merck and Pfizer led the S&P 500 down.
Worries about the impact of the U.S. election results, kept stocks under pressure on Wednesday. Among pharmaceutical stocks, shares of drug maker Merck & Co. (MRK: chart) dropped 3.3% after the drug maker revealed that it faces a tax liability of $5.58 billion due to four tax disputes in the U.S. and Canada. Rival company Pfizer Inc.''s (PFE: chart) fell 1.9%.The two Dow components were the biggest drags on the S&P 500. Health insurance stocks also moved to the downside, led by Molina Healthcare (MOH: chart), with the managed care company falling 8.3% after the company reaffirmed full-year outlook below estimates. The weakness in the health insurance sector also came amid concerns that a Democrat-controlled congress could have a negative impact on the industry. Shares of Wal-Mart Stores Inc. (WMT: chart) also came under pressure, falling 0.6%.

In contrast, companies in the mortgage business posted gains on the notion that Democrats would push plans to broaden access to housing. Fannie Mae (FNM: chart) rose 2.3%, while Freddie Mac (FRE: chart) advanced 2.4%. Rising oil prices and a broker upgrade helped shares of Exxon Mobil Corp. (XOM: chart) gain 1 percent to $73.26. The stock was a leading gainer in both the Dow and S&P 500. Sirius Satellite Radio Inc. (SIRI: chart) rose 2% after posting a narrower-than-expected loss on improved revenue. In late morning trading, the Dow Jones industrial average moved off earlier lows and was down 12.88, or 0.11%, at 12,143.89. The Standard & Poor''s 500 index was down 1.31, or 0.09%, at 1,381.53, and the Nasdaq composite index fell 1.79, or 0.08%, to 2,374.09. Bonds showed little movement, with the yield on the benchmark 10-year Treasury note flat at 4.66% from late Tuesday


10:30AM The Sensex falls for a second day in a row on selling pressure.
The Sensex on BSE finished 84.15 points, or 0.64%, lower to 13,072.51. The market-breadth positive at the start of trading turned weak in late trading. As 1,1628 shares declined on BSE, only 881 advanced and 64 stocks were unchanged. For every 2 decliners there was 1 advancer. From the Sensex stocks, 22 declined while the rest advanced. The turnover on BSE was Rs 4,305 crore, lower than Rs 4,688 crore on Tuesday. The turnover on NSE was Rs 8,572.66 crore, lower than Rs 9,066.78 crore on Tuesday.

Decliners

The auto sector was in decline today. The costs of materials such as nickel, aluminium, rubber and steel is rising. Hero Honda led the decline, down 3.77% to Rs 715, on 2.16 lakh shares. It slid to a low of Rs 705.45, after hitting a high of Rs 744 in early trade. Advancing input costs and intense competition forced investors into selling shares of auto firms. Bajaj Auto fell 3.37% to Rs 2,630 and TVS Motor was down 5.16% to Rs 102.

Maruti Udyog dipped 1.1% to Rs 933.50, following the Heavy Industries Minister Santosh Mohan Deb announcement that he had formally proposed the selling of the remaining 10% government stake in the company. Tata Motors also declined 2.36% to Rs 799.

Index heavy Reliance Industries plunged 2.93% to Rs 1,252.50 on a volume of 22.32 lakh shares on major sell-off by funds along with profit-taking by retail investors. It traded in the range of Rs 1,240 and Rs 1,295.

The energy sector was also hit today. Indian Oil Corp fell 1.3% to Rs 499.35 as it said that the state-run Indian Oil Corp is losing Rs 50 crore a day on retail fuel sales despite making a profit of Rs 3.5-4 per litre on petrol sales. Reliance Communications also dipped 1.82% to Rs 380 and HDFC lost 2.88% to Rs 1,515.

Hindustan Zinc experienced high volatility, trading in a range of Rs 1,008.90 and Rs 943.35. It closed 1.47% lower, at Rs 966.85.

Advancers

Bank stocks rallied from their lows, in the final hours of trade. ICICI Bank led the advancers, up 2% to Rs 785. IndusInd Bank gained 5.20% to Rs 46.45, UTI Bank added 2.87% to Rs 437.50, ICICI Bank jumped 2% to Rs 785, ING Vysya Bank was up 1.71% to Rs 178. State-run banks also took part in the rally. SBI was 1.76% higher to Rs 1,124.50, Allahabad Bank gained 2.30% to Rs 91 and Bank of Maharashtra advanced 1.31% to Rs 34.85.


Software exporter Infosys gained 1.07% to Rs 2,125. It had soared to a 52-week high of Rs 2,151 in early trade. The stock advanced for the second day in a row after shareholders of Infosys on Tuesday approved an issue of up to 30 million sponsored American Depositary Receipts.

Advancers from shares not part of the Sensex stocks included Hyderabad Industries surging 20% to Rs 298, Ashok Leyland jumping 4% to Rs 46.20 on on renewed buying and UTV Software soaring 6.55% to Rs 248.80.

Other news

Foreign funds inflows keep rising. As per provisional data, foreign funds were net buyers to the tune of Rs 316.66 crore on Tuesday.

The Government is planning to apply a tighter control on the number of IT special economic zones. It will initiate changes to the SEZ Act, which will be implemented in about 3 months.