Metal shares gained on hopes of strong demand. Hindustan Zinc rose 4.8% to Rs 573.70, National Aluminium Company gained 2% to Rs 199.50, Sterlite Industries gained 1.6% to Rs 401.55 and Tata Steel gained 1.1% to Rs 531. BSE Metal index rose 1.1% to 8,254.86. BHEL rose 1% to Rs 2176.05 after the company secured Rs 1,224 crore ($269 million) order for a thermal power plant in Uttar Pradesh.

Hero Honda led the decliners, falling 2.21% to Rs 681.25. ICICI Bank sank 1.11% to Rs 578.00, TCS shed 0.50% to Rs 963.40, HDFC Bank lost 0.31% to Rs 807.25 and Ranbaxy fell 0.27% to Rs 393.00.

Several small cap companies advanced during the trading session. Courier service company, Blue Dart Express jumped 15.8% to Rs 544. VisualSoft soared 11% to Rs 93.90 even as the company clarified that it has not finalized any corporate merger deal. Datamatics Technologies surged 13% to Rs 56.45 on strong volume of 24.8 lakh shares on BSE.


9:45AM Stocks opened in the negative.
Stocks moved sharply higher at opening as Wall Street welcomed news of a cease-fire between Israel and Lebanon Monday and a significant decline by oil prices. Crude futures fell $1.18 to $73.17 a barrel on a reduced risk of a supply disruption in the Middle East and news that BP is planning to continue to produce oil from the western side of the Prudhoe Bay oil field. With no economic data and little corporate news of note, investors saw the cease-fire as a buying opportunity after last week''s losses.

The decrease by the price of oil contributed to significant strength among airline and other transportation stocks. The Amex Airline Index rose 2.8%, while the broader Dow Jones Transportation Average gained 1.5%. Some networking stocks also posted strong gains, with shares of Ciena (CIEN: chart) rising 3% after Banc of America upgraded its rating on the company''s stock to Neutral from Sell. In other brokerage news, Ford Motor (F: chart) gained 2.9% after Bear Sterns raised its rating on the stock to outperform from underperform, while General Motors (GM: chart) lost almost 1% on downgrade from outperform to peer perform. In the first hour of trading, the Dow Jones industrial average rose 61.15, or 0.55%. The Standard & Poor''s 500 index added 6.97, or 0.55%, and the Nasdaq composite index gained 17.01, or 0.83%.


9:00AM Stock futures pointed to a higher opening on oil drop and ceasefire.
U.S. stock futures indicated a positive opening Monday as oil prices declined 1.6% after a truce in the Middle East took effect, ending a five-week violent conflict between Israel and Hizbollah. BP’s announcement that it would be able to keep half its Prudhoe Bay field pumping also helped oil prices down. During the week, investors will be focused on inflation data, expected to give signal about the Fed Reserve’s next move. Lower oil prices may help lift shares in industrial conglomerates such as 3M Company (MMM: chart) and chemical companies including Dow Chemical & Co. (DOW: chart) and DuPont Co (DD: chart). Shares in Whole Foods Market Inc. (WFMI: chart) are expected to rise after analysts at JP Morgan upgraded the company''s stock to ‘neutral’ from ‘underweight.’ On the earnings front, Computer Associates Inc. (CA: chart) and Agilent Technologies Inc. (A: chart) are among the few S&P500 companies scheduled to report results on Monday. Standard & Poor''s 500 futures were up 7.3 points, above fair value. Dow Jones industrial average futures shot 64 points higher, and Nasdaq futures were up 10.50 points.

The Valspar Corp, (VAL: chart), coatings specialist, reported Q3 net income rose to 51 cents a share from 44 cents a share in the same period a year ago. The company said current earnings include 1 cent a share in expenses related to its manufacturing rationalization plan and 1 cent a share for stock-expense compensation. They also include a favorable tax adjustment of 3 cents a share. Sales rose to $797.4 million from $725.4 million a year ago. The company beat analyst estimate for earnings of 49 cents a share.

Dillard''s Inc, (DDS: chart), department store operator, reversed to Q2 profit of 20 cents a share, up from 15 cents a share loss in the year-ago period, helped by fewer markdowns, sales of furniture and strength in the Western region. Net income includes a gain of 11 cents a share from the sale of an interest in a mall joint venture, settlement proceeds of 5 cents a share related to the Visa Check/Mastermoney antitrust litigation. Results also include a charge of 17 cents a share for a memorandum of understanding reached in a current litigation case, and recognition of an income tax benefit of about 7 cents a share for the change in a capital loss valuation allowance. Net sales were about flat at $1.69 billion. Total revenue rose to $1.75 billion from $1.73 billion. Dillard''s said it achieved gross margin improvement of 110 basis points of sales in Q2.

Hewitt Associates Inc, (HEW: chart), retirement plan consulting, swung to a Q3 net loss of $1.88 a share, down from a net income of 31 cents a share in the year-ago period. The company took $249 million of pretax non-cash charges related to challenges implementing contracts at its higher performance-based compensation unit. The core net loss was $1.85 a share, compared with income of 33 cents a share in the prior-year quarter. Revenue fell 1.1% to $714.4 million. The company missed analysts'''' forecasts for earnings of 32 cents a share.

Sysco Corp, (SYY: chart), food products distributor, reported Q4 earnings fell to 41 cents a share, from 44 cents a share a year earlier. The results include 4 cents a share in stock option expenses. Revenue advanced 6.6% to $8.51 billion from last year''''s $7.98 billion. The company missed analysts'''' views by a penny.


8:00AM Oil prices dropped a dollar after Mideast cease-fire.
After weeks of volatile trading, oil prices declined almost a dollar Monday following the long expected Mideast cease-fire and news that BP would be able to maintain half of its production at a large oil field in Alaska, an improvement from a previous decision to completely shut down the oil field after discovering a leak a week ago.

A U.N.-brokered cease-fire between Israel and Lebanon''s Hezbollah militants took effect at 0500 GMT Monday, ending a month of violence with more than 900 victims taken. Crude oil prices hit a record of $78.40 a barrel on July 14, as the market had worried that the conflict could affect oil supply if it extended into neighboring countries in the oil-rich region, and Iran in particular. Last week prices soared after BP''s initial announcement hen retreated on fears that the foiled trans-Atlantic airplane attacks could hurt jet fuel demand and consumer confidence.

Light sweet crude for September delivery fell 92 cents to $73.43 a barrel on the Nymex. September London Brent slipped 73 cents to trade at $74.90 a barrel. Natural gas futures fell 25 cents to $7.018 per 1,000 cubic feet. Gasoline futures dropped nearly 4 cents to $2.0270 a gallon, and heating oil futures fell slightly to $2.0254 a gallon.


7:30AM Japanese stocks advance on strong company reports despite blackout.
Asian markets were higher on Monday. The Nikkei 225 Average in Japan was up 1.45% to 15,790.82 at 1:25 p.m. Tokyo time when a computer error caused by the blackout caused the index to stop updating. By the time markets closed at 3 p.m., index calculations had not resumed. However, all component stocks continued trading as usual. According to independent calculations, the Nikkei would have ended the day up about 1.9%. Fast Retailing Co, the operator of clothing chain Uniqlo, advanced 4.67%. Bridgestone Corp was up 4.59% after the Daiwa Institute of Research said it expects the company to return to strong profits next year despite weaker earnings recently due to high material costs.

Hong Kong''s Hang Seng Index finished the day up 0.23% to 17,290.01. Li Ka-shing''s Hutchison Whampoa rose 1.72% on local media reports, denied by the company, that it may list its retail businesses separately. South Korea''s Kospi Index was up 0.23% as exporters including Hyundai Motor and LG Electronics advanced. The country''s markets will be closed Tuesday for the Independence Day holiday.

Australia''s S&P/ASX 200 was up 0.45% despite a sharp drop by top telecom firm Telstra Corp. The Shanghai Composite Index, in China, ended down 2.2% on expectations the government would step up tightening measures after figures released Friday showed money supply grew by a faster than expected 18.4% in July.