Standard & Poor’s upgraded India long-term sovereign credit rating on Tuesday to investment grade. The bank issued a stable outlook for the rating. India became the 13th country rated by S&P to have emerged from non-investment grade to investment grade.

The Reserve Bank of India lifted its key short-term lending rate on Wednesday to its highest level in nearly four years on inflation worries. The main lending rate, known as the repo rate, was raised to 7.50% from 7.25%, but the Reserve Bank kept its reverse repo rate unchanged at 6.0%.

Trading highlights

Tata Steel Ltd. won the auction for U.K. Corus Group Plc for 6.2 billion pounds, or $12 billion, making the deal the largest acquisition by an Indian company. Tata topped the deal proposed by CSN of Brazil in a three-month race. In its final bid, Tata has offered Corus investors 608 pence per share in cash, compared to a final bid of 603 pence from CSN.

Most-active

Tata Steel was the most-active stock with a turnover of Rs 279.20 crore followed by Shree Ashtavinayak and Pyramid Saimira.

Decliners

Tata Steel led the decliners in the Sensex, as it plummeted 11.10% to Rs 461.80. Tata Steel reported 41.1% growth in Q3 net profit to Rs 1,063.75 crore, on 21.4% growth in net sales to Rs 4,469.98 crore. Other prominent decliners included Hindalco shedding 3.24% to Rs 174.85, Hindustan Lever dipping 3% to Rs 207.45 and Wipro losing 2.66% to Rs 614. Tata Motors also lost 2.5% to Rs 878.

Index heavy Reliance Industries declined 1.52% to Rs 1,360.75. ACC and Grasim dipped 2% each to Rs 1,020 and Rs 2,770, respectively. L&T lost 1.5% to Rs 1,587, ICICI Bank sagged 1.5% to Rs 940. ONGC finished 1% lower to Rs 903. ONGC announced its Q3 net profit rose 20%, topping forecasts of 6% rise in net profit.

Advancers

Gujarat Ambuja Cements led the advancers, adding 1.78% to Rs 137. Reliance Energy gained 1.60% to Rs 514 as the company announced it has secured power projects worth about Rs 4,150 crore in Haryana and Uttar Pradesh. ITC rose 0.93% to Rs 174, after reporting 33.6% growth in net profit in Q3 to Rs 717.40 crore, from Rs 536.83 crore during the year ago period. HDFC Bank and Satyam rallied nearly 2% each. HDFC Bank finished at Rs 1,078, while Satyam advanced to Rs 472.


9:45AM Market opened mixed. Boeing led the Dow higher.
U.S. stocks opened mixed on Wednesday, with blue-chip stocks led higher by Boeing Co. (BA: chart) The aerospace giant rose 4.5% after it said Q4 profit doubled on 26% revenue increase and boosted its outlook. SanDisk Corp. (SNDK: chart) weighed on the tech sector with a decline of 9% in early trading. The company said late Tuesday it swung to a Q4 loss from a year ago, hurt by acquisition-related charges. The company reported a net loss of $35 million, or 17 cents a share, compared with net income of $134 million, or 68 cents a share, in last year''s same quarter. It said its sales surged 55% on strong demand for its NAND flash-memory storage chips used in consumer electronics. However, SanDisk shares fell due to a soft sales forecast. It warned there is an oversupply of NAND flash in the market and steep price declines ahead.

Among other earnings-inspired gainers, Estee Lauder Cos. (EL: chart) said Q2 net income more than doubled to $208.4 million, or 99 cents a share, from $81.7 million, or 38 cents a share, a year earlier. The cosmetics company said net sales advanced 12% to $1.99 billion from $1.78 billion. Quarterly results beat estimates for earnings of 76 cents a share on net sales of $1.91 billion. Levitt Corp. (LEV: chart) surged 29% after the homebuilder said that preliminary Q4 sales figures from its home building subsidiary added up to $143.6 million. The company reported 426 homes delivered in Q2 and backlog at1,248 units with a sales value of $438.2 million. In the first hour of trading, the Dow Jones industrial average was up 14.34, or 0.11%, at 12,537.65. The Standard & Poor''s 500 index was down 1.84, or 0.13%, at 1,426.98 and the Nasdaq composite index was down 10.54, or 0.43%, at 2,438.10. Bonds were little changed ahead of the Fed''s comments on the economy and interest rates. The yield on the benchmark 10-year Treasury note was flat at 4.88% from late Tuesday.

Fourth-quarter GDP climbs 3.5%.
Wednesday morning, the Department of Commerce released its advance report on fourth quarter gross domestic product, showing that GDP grew at a much faster rate than most economists had been anticipating. The report showed that GDP grew at an annual rate of 3.5 percent in the fourth quarter compared to the 2.0 percent rate of growth that was seen in the third quarter. Economists had been expecting more modest growth of about 3.0 percent. The Commerce Department said that the GDP growth primarily reflected strong consumer spending, exports, and government spending. The report showed that consumer spending rose 4.4 percent in the fourth quarter following a 2.8 percent increase in the third quarter. At the same time, the GDP growth was partly offset by negative contributions from residential fixed investment and private inventory investment. Additionally, the Commerce Department said that the acceleration in the pace of GDP growth compared to the third quarter reflected a downturn in imports, which are a subtraction in the calculation of GDP.

However, the report also noted that motor vehicle output subtracted 1.17 percentage points from the fourth quarter GDP growth after contributing 0.76 percentage points to the third quarter growth. The closely watched reading on inflation showed that consumer prices, excluding food and energy prices, rose at an annual rate of 2.1 percent in the fourth quarter. This represents a slowdown from the 2.2 percent rate of growth that seen in the third quarter. Despite the slowdown in the pace of core consumer inflation, the stronger than expected GDP growth is likely to further decrease the likelihood that the Federal Reserve will lower interest rates in the near future. The Federal Reserve will announce its latest decision on interest rates later this afternoon, with most analysts expecting the Fed to leave interest rates unchanged once again. Traders will be looking for indications of the Fed''s outlook for the economy and interest rates.


9:30AM-2:30PM London The UK benchmark index dipped Wednesday on financials.
The FTSE 100 declined 23.3 points and was trading at 6,218.7 by mid-day on Wednesday.

Economic news

House prices in the UK increased during January at their slowest pace in eight months. The average price of a house was 173,225 pounds, up 0.3% on December, the smallest increase since last May and a much weaker increase than the 0.8% predicted by analysts.