5:00PM NY – 11:00PM Frankfurt – 3.:30AM Mumbai GLOBAL MARKETS UPDATE
Early trading in New York was dominated by a sharp plunge in new home construction in January and volatile metals and oil markets. PPI, a measure of wholesale inflation, declined in January. Microsoft CEO cautioned that Vista sales projections from analysts were aggressive, pressuring tech stocks. Second largest Spanish bank, Banco Bilbao has agreed to buy Compass Bancshares based in Texas for $9.6 billion.

- Yield on 10-year U.S. bond market closed at 4.696% and 30-year bond market closed at 4.792%.

-U.S. New Homes starts in January fell 14.3%, ten year low, to 1.408 million. Housing market slow down has stabilized but is likely to weaken further in industrial states in the Mid-western region.

-Gold futures rose $1.50 per ounce to close at $672.90, silver futures closed up 1.8 cents to $13.98 and copper futures rose $129 per metric ton to close at $5,827 in New York trading. Nickel futures in London trading fell 1.8% to $38,800 per metric ton. In the last three days the metal has advanced 12%. Tin prices flat today but traded near 17-year high.

-Crude oil advanced $1.27 per barrel to close at $59.26 in New York trading. Natural gas rose 17% to close at $7.47 per mmBTU and gasoline closed up 4.7 cents to $1.64 per gallon. Corn futures closed up 9.5 cents to close at $4.2950 per bushel and sugar closed at 10.79 cents per pound, down 0.06 cents.

-Asian Stock Markets closed mostly lower across the region. Market index in Philippines with a loss of 1.4% led the decliners, followed by 0.84% decline in Thailand, 0.56% fall in Australia and 0.48% drop in Singapore. Japan closed 0.12% lower on sharp fall in Honda and a correction in Sony. Markets in Taiwan and India were closed for a public holiday. Markets in China and Taiwan will be closed for the entire next week to celebrate Lunar New Year and stock exchanges in Hong Kong, Singapore and Malaysia will be closed on Monday and Tuesday.

-European Stock Markets closed moderately lower led by 0.6% loss in Norway, 0.33% in the Netherlands and fractional losses in the UK, France and Germany. Swiss market closed up 0.3% and Italian index rose 0.1%. Russia’s main index rose 0.11% on record $309.5 billion foreign currency reserve at the end of previous week, a rise of $4.9 billion from a week ago.

Latin American Markets closed lower led by a fall in larger markets. Brazil lost 0.23% and Mexico declined 0.03%, however, Argentina closed up 0.6% followed by a rise of 0.4% in Chile. Canada rose 0.18% on higher earnings from Rogers Communications, and advances in Research in Motion and Nortel Networks.

1:00PM NY – 7:00PM Frankfurt – European Markets

European stocks closed moderately down at the end of the week, pressured by a weak opening of U.S. markets and losses for Spanish banking giant BBVA. Wall Street started trading lower after a bigger-than-expected drop in housing starts and a cautious outlook from Microsoft Corp. Shares in BBVA lost 2.4% in Madrid after it announced a deal to buy Compass Bancshares for $9.6 billion and said it would issue 196 million shares to fund the purchase. In corporate news, shares in catering firm Compass Group rose 0.9%. Chocolate firm Barry Callebaut rose 10% in Switzerland after it said it would broaden its strategic collaboration with food giant Nestle. Tire maker Michelin gained for a second straight session, up 3.3% after Credit Suisse upgraded its stock to neutral from under-perform. DaimlerChrysler added 1.3%, following a report that General Motors is in talks to buy all of Chrysler. The U.K. FTSE 100 lost 0.2% at 6,419.50, the German DAX 30 lost a fraction of a percentage point at 6,957.07 and the French CAC-40 lost 0.1% at 5,713.59.

Crude oil prices rose above $58. Light, sweet crude March delivery gained 73 cents to $58.72 a barrel. Heating oil added 2 cents to $1.6488. Natural gas jumped 21 cents to $7.498 per 1,000 cubic feet. London Brent gained 71 cents to $58.31. The U.S. dollar was mixed against its major currency rivals. The euro was quoted at $1.3137, down from $1.3142. The dollar bought 119.22 yen, up from 119.18. The British pound was quoted at $1.9502, down from $1.9511. Gold in London traded at $665.10 per troy ounce, up from $664.75.


11:30AM U.S. stock markets turned to profit taking.
U.S. stock markets turned to consolidation of recent gains ahead of a three-day weekend. Stocks were pressured by a plunge in new housing starts and a sales warning from Microsoft Corp. (MSFT: chart). The Dow component weighed on tech stocks with a decline of 2.3% after its CEO Steve Ballmer said analyst sales forecasts for Vista operating system might be too high. Homebuilding stocks moved notably lower. Shares of Hovnanian Enterprises (HOV: chart) lost 1%, Champion Enterprises (CHB: chart) dropped 2%, as well as homebuilders KB Home (KBH: chart) declined 1.7%, and Toll Brothers (TOL: chart) slipped 1.1%.

By sectors, real estate investment trusts, mining and computer-related stocks declined, while banks, natural gas and airlines moved higher. AMR (AMR: chart) was also in the spotlight, rising 2% on speculation that the airline is a buy-out target of a group including the Goldman Sachs Group. Compass Bancshares (CBSS: chart) surged 6% after Spanish financial group Banco Bilbao Vizcaya Argentaria agreed to acquire it for $9.6 billion in cash and stock. Goodyear Tire & Rubber (GT: chart) dropped 3% after it reported a wider loss and operating earnings that missed estimates. In late morning trading, the Dow fell 7.21, or 0.06%, to 12,757.80. The Standard & Poor''s 500 index was down 2.73, or 0.19%, to 1,454.08, and the Nasdaq composite index dropped 6.32, or 0.25%, to 2,490.78. Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.69% from 4.71% late Thursday.

10:00AM NY – 8:30PM Mumbai – India Update
Essar claims to build a national chain of 2,500 stores across India to sell and service mobile phones.

The group plans to invest $250 million to $300 million over three years and expects revues of up to $1 billion. An additional feature will be the immediate handset repair services, available at any of the mobile store locations in the country. Forty stores have already been introduced to Mumbai, Delhi, Kolkata, Hyderabad, Chennai, Bangalore and Ahmedabad, but the aim is to build at least 2,500. According to Essar Telecom Retail CEO, Rajiv Agarwal, the fast growth of the economy encouraged the company to undertake the venture. The outlet will also offer digital cameras and iPods and gaming devices such as Xbox, and direct-to-home connections.

Essar group in the past have made several attempts at building retail chains but details of other ventures have been sketchy. At one point the company had claimed to be working on building a chain of do-it-yourself hardware store chain. No details or plans have been released since that announcement six months ago.

9:45AM U.S. stocks opened lower on sharp drop in housing starts and a cautious outlook for Microsoft.
U.S. stocks opened lower Friday ending a recent winning streak. Market sentiment was affected by in-line inflation numbers, a huge drop in housing starts, and a cautious outlook from Microsoft. Housing stocks moved notably lower after the Department of Commerce reported that housing starts plunged unexpectedly 14.3% to an annual rate of 1.408 million units in January from a revised 1.643 million unit rate in December. According to another report released by a trade group for real estate agents, prices for single-family homes fell in more than half of the nation’s 149 biggest metropolitan areas in the last three months of 2006. The median price of single-family homes fell 2.7% to $219,300.

Technology stocks moved to the downside after Microsoft (MSFT: chart) said late Thursday that analyst revenue forecasts for the Vista operating system were too optimistic. The stock slipped 2% in early trading. Weakness was also visible in the biotechnology, brokerage, and defense sectors. Among gaining stocks, AMR Corp. (AMR: chart) rose 4% on bid speculation. Compass Bancshares (CBSS: chart) surged 6% after Spanish financial group Banco Bilbao Vizcaya Argentaria agreed to buy the regional bank for $9.6 billion in cash and stock.

Among companies driven by analyst comments, Alltel (AT: chart) fell 1.8% after Citigroup downgraded its rating on the telecommunication services provider to hold from buy. On the other hand, shares of Terex (TEX: chart) jumped 3% after Citigroup upgraded its rating on the capital equipment manufacturer to buy from sell. Citigroup also raised its price target on the stock to $78 from $60. In midmorning trading, the Dow fell 16.34, or 0.13%, to 12,748.34. The Standard & Poor''s 500 index was down 4.71, or 0.32%, to 1,452.10, and the Nasdaq composite index dropped 13.16, or 0.53%, to 2,483.94. Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.69% from 4.71% late Thursday.