Durable goods orders plunged 7.8% in January.
Tuesday morning, the Department of Commerce released its advance report on durable goods orders in the month of January, showing that durable goods orders fell much more than economists had been expecting. The report showed that durable goods orders fell 7.8 percent in January following a downwardly revised 2.8 percent increase in December. Economists had expected orders to fall 3.0 percent compared to the 2.9 percent increase originally reported for the previous month. The unexpected decline in durable goods orders reflected a steep drop in orders for transportation equipment, which fell 18.0 percent in January after rising 3.1 percent in December. The decrease reflected substantial declines in orders for both defense and commercial aircraft and parts. The Commerce Department said that durable goods orders fell by a more modest 3.1 percent excluding transportation, compared to a 2.6 percent increase in the previous month. Notable declines in orders for machinery, computers and electronics, and capital goods also contributed to the drop in durable goods orders. The report also showed that shipments of durable goods rose 0.2 percent in January following a 0.5 percent increase in December. Additionally, inventories of durable goods rose 0.3 percent after rising 0.7 percent in the previous month.


8:30 AM Wal-Mart agreed to pay $1billion for 35% in Trust-Mart.
The world’s largest retailer Wal-Mart (WMT: chart) agreed to buy a 35% stake in Trust-Mart, a major Chinese discount chain, in an effort to expand its presence in China. Financial details of the deal were not revealed, but according to reports Wal-Mart agreed to pay $1 billion for the stake. The company said that it is planning to acquire ownership control in the future. Wal-Mart is one of the numerous foreign retailers investing in China’s fast-growing retail markets one of its biggest and most prominent foreign employers, with a work force of 37,000 and 68 stores. It has been seeking international expansion to compensate for slowing growth in the United States. Its total international division accounted for 20% of its overall net sales of $312.4 billion in 2005.


8:15AM Asia finishes lower on Tuesday, China plummets.
Asian markets ended lower on Tuesday. The Shanghai Composite Index plunged 8.8% to close at 2,771.79, its biggest single-day drop since February. 18, 1997. Shares in airlines, steelmakers and financial issues led declines. Profit-taking was triggered by worries new macro-tightening policies could be introduced after the annual session of the China National People Congress that reconvenes on March 5. Baoshan Iron & Steel hit the 10% downside limit, Citic Securities plummeted 9.7% and China Life Insurance declined 9%.

Japanese Nikkei 225 ended 0.52% lower to 18,119.92, as property shares declined. Mitsui Fudosan retreated 2.5%. The firm had advanced about 38% in the last three months. Decliners also included Mitsubishi Estate, whose shares fell 2.8%. Toyota Motor rose 0.2% after reports that biggest vehicle maker in Japan plans to spend up to 100 billion yen to build a sport-utility vehicle assembly plan in Mississippi.

Other indices around the region also declined. Hong Kong Hang Seng Index settled 1.76% lower at 20,147.87. Australian S&P/ASX 200 finished 0.83% lower at 5,993.80 and Singapore Straits Times Index shed 2.29% to 3,232.02. Taiwan Weighted Price Index retreated 0.02% to 7,901.96, while South Korean Kospi ended 1.05% lower at 1,454.60.


8:00AM NY-7:00PM Mumbai Sensex declines on selling pressure, weak global markets.
The Sensex on BSE finished 170.69 points, or 1.25%, lower at 13,478.83. The market was highly volatile and traded within a range of 294.85 points. The market-breadth was slightly positive as 1,330 stocks advanced, 1,205 declined and 62 were unchanged. Of the 30 stocks in the Sensex, seven advanced while the rest 23 declined. The turnover on BSE was Rs 4,019.74 crore, higher than Rs 3,956.87 crore on Monday. On NSE, the turnover was Rs 8,148.78 crore, lower than Rs 9,046.18 crore on Monday.

Economic news

The government announced on Tuesday that there was no need to worry over the economy''''s rapid growth, and added that the momentum is sustainable even though containing inflation would be difficult. The government made the announcement on the eve of the release of the annual budget due Wednesday, February 28.

State election results showed that the ruling Congress party, is about to lose in the states of Punjab and Uttarakhand on voter concern about inflation and economic reforms.

Trading highlights

JSW Steel was the most-active stock with a turnover of Rs 163.65 crore followed by Power Finance and Global Broadcast.

Advancers

HDFC Bank led the gainers, despite the mixed trend in banking stocks on fears that rising inflation may bring about raising the interest rates. HDFC Bank gained 2.6% to Rs 976.2. Construction shares and large-cap Maruti Udyog also gained. Construction shares advanced on hopes that the budget will help the infrastructure sector, whereas Maruti Udyog added on expectations of cuts in excise duty on cars. Maruti gained 1.5% to Rs 887.7. ACC advanced 1.6% to Rs 961.1. ACC rose after Swiss Holcim increased its stake in Ambuja Cements India Private Ltd, a company which owns 35.15% of ACC.

Decliners

ICICI Bank lost 3.3% to 875.7. Although the trend was mixed, banking stocks were sold on concerns of rising inflation that could lead to hikes in interest rates, which could hit credit growth. Auto makers exhibited considerable weakness. Hero Honda shed 3.6% to Rs 680, and Bajaj Auto declined almost 3.2% to Rs 2,724.3. IT large-caps slipped. Satyam Computer lost 2.4% to Rs 450.5, Wipro shed 1.9% to Rs 602, TCS lost 1.4% to Rs 1,264 and Infosys shed nearly 1% to Rs .4% to Rs 2,195.15. Satyam Computers has made an alliance with US global defence and technology company Northrop Grumman for expanding in the global aerospace and defence market place.

Unlike ACC, Gujarat Ambuja Cements shed 2.3% to Rs 124.50, after the cement company announced it sold 11% stake in Ambuja Cements India to Swiss company, Holcim, for Rs 527 crore. ONGC, the oil exploration leader, declined despite higher global crude oil. The stock shed 2.1%, to Rs 817.4. Index heavy Reliance Industries lost 0.2% to Rs 1,401.