12:30PM European shares closed below the flat line.
European markets closed slightly lower, reflecting weakness in the telecoms sector and disappointing U.S. employment report. Telecommunication stocks came under pressure after Deutsche Bank downgraded Vodafone Group and Telecom Italia to hold from buy, sending their shares down by 1% and 1.5% respectively. Airline gains counterbalanced some of the weakness posted by the telecoms, with Aer Lingus and Ryanair extending Thursday gains. Ryanair rose 1.9% after it revealed that it lifted its Aer Lingus stake to 19.2% from 16%, pushing the stock up 2.1%. Online gambling stocks recovered on speculations of sector consolidation, with PartyGaming up 6.3%.Barclays and Lloyds TSB boosted the banking sector after a report that BBVA could be interested in merging with either of the two. The German DAX 30 ended flat at 6,073, the French CAC 40 dipped 0.2%, and London FTSE 100 lost 0.1%.

Oil prices retreated after market shrugged off worries that OPEC will cut production levels. Light sweet crude November delivery slipped 36 cents to $59.67. Heating oil lost a penny to $1.6838 a gallon, while gasoline fell 2 cents to $1.4975. Natural gas futures added 3 cents to $6.325 per 1,000 cubic feet. The U.S. dollar was mixed versus major currencies. The euro traded at $1.2577, down from $1.2690. The dollar bought 119.06 yen, down from 117.61. The British pound stood at $1.8686, down from $1.8786. European gold prices declined. In London the precious metal traded at $567.50, down from $568.55 per ounce. In Zurich gold traded at $566.53, down from $569.20. Silver closed unchanged at $10.90.


11:30AM Caterpillar weighed on the Dow.
Mixed employment data kept stocks trading in the negative. Heavyweight stocks Caterpillar Inc. (CAT: chart) and United Technologies Corp. (UTX: chart) were the biggest drags on the Dow, down 1.5% and 1% respectively. Shares of drugstores like CVS Corp. (CVS: chart) fell after Target Corp. (TGT: chart) said it would match Wal-Mart Stores Inc. (WMT: chart) in offering a program of selling some generic drugs for $4 per prescription. Among stocks driven by analyst comments, TD Ameritrade (AMTD)), online broker, dropped 2.6% after Banc of America lowered its earnings estimate for the company as well as downgraded its rating on the stock to Neutral from Buy. Energen (EGN: chart), energy holding company slipped 3.9% after Citigroup downgraded its rating on the stock to Hold from Buy.

Profit taking contributed to weakness in the transportation sector, as well as in a variety of other sectors. Some networking, brokerage, and housing stocks posted notable losses. In late morning trading, the Dow Jones industrial average was down 23.05, or 0.19%, at 11,843.64 after closing Thursday at 11,866.69. The Standard & Poor''s 500 index was down 5.12, or 0.38%, at 1,348.10, and the Nasdaq composite index fell 7.58, or 0.33%, at 2,298.76. Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.67% from 4.61% late Thursday.


10:30AM The Sensex edges lower Friday as profit-taking erases earlier gains
The Sensex on BSE shed 16.60 points, or 0.13%, to settle at 12,372.81. The market-breadth was positive as 1,580 shares advanced, 937 declined and 56 shares were unchanged. Advancers outpace decliners by 1.68:1. The market traded in a narrow range of 76.26 points, between 12,357.96 and 12,434.22. The turnover on BSE was Rs 3,686 crore, compared to Rs 3,681 crore in Thursday. The turnover on NSE was Rs 6,604.85 crore.

India seems to be able to attract a record $12 billion of foreign direct investment this fiscal, going by inflows in the first four months which have almost doubled from a year ago at $2.9 billion.

Most active

VSNL headed the value chart with a turnover of Rs 192 crore followed by Reliance (Rs 128 crore), Bombay Rayon (Rs 87 crore), Tata Steel (Rs 68 crore) and HPCL (Rs 66 crore).

Advancers

Hindalco led the gainers advancing 1.94% to Rs 175.90. Refinery shares soared on hopes of improved second-quarter results. HPCL jumped nearly 5%, to Rs 305.25. The stock gained on a heavy volume of 22.1 lakh shares as several block deals were traded in the stock on BSE. Indian Oil Corporation jumped 5% to Rs 565.90 and BPCL rose 4.6% to Rs 394.

Index heavyweight Reliance Industries showed volatility due to alternate rounds of buying and selling. The stock rose 0.4% to Rs 1,159.60. It moved between Rs 1,152.55 and Rs 1,174.

Infosys rose 0.3% to Rs 1,871.80. The stock had struck an early low of Rs 1,847.25. Gujarat Ambuja Cements (up 0.9% to Rs 121.85) moved higher for the second day in a row. Telecommunication service provider, VSNL, surged 9% to Rs 432. Volume in the stock was a huge 40.4 lakh shares on BSE. Reliance Communications advanced 1.3% to Rs 353, extending its recent gains.

Construction shares were in focus after the UPA government cleared upgradation of the entire Golden Quadrilateral highway stretch from four lanes to six lanes. IVRCL Infrastructures rose 6% to Rs 288.40, Hindustan Construction added 5% to Rs 128, GMR Infrastructure rose 2.2% to Rs 236, Valecha Engineering gained 10% to Rs 211.80, Gammon India rose 3.7% to Rs 404, and Patel Engineering rose 5% to Rs 349.45. Gujarat Ambuja Cements (up 0.9% to Rs 121.85) gained for the second day in a row. Earlier this week, it reported a surge in cement dispatches for September 2006.


Tyre shares advanced for the second day running. MRF jumped 5% to Rs 4,269.35, CEAT rose 5% to Rs 128.15, Goodyear India rose 4% to Rs 147, and Apollo Tyres rose 2.5% to Rs 352.90.

Truck and bus maker Ashok Leyland rose nearly 2% to Rs 48.80, after it announced that sales in September surged 39% from a year earlier, to 8,155. Petronet LNG ended flat at Rs 58. Volume in the stock was a huge 72 lakh shares on BSE.

Decliners

Apart from Infosys, all the other large-caps in the sector dipped. IT pivotals eased. Wipro lost 0.9% to Rs 516, Satyam Computer shed 1% to Rs 809 and TCS lost 0.3% to Rs 995.