In an attempt to put inflation under control, the Reserve Bank of India raised, on Tuesday, the cash reserve ratio, popularly known as CRR. This refers to the level of deposit banks have to maintain with the Reserve Bank of India. The Reserve Bank of India hiked it by half a percentage point to 6%. The move will reduce the funds available for lending and may lower profitability of banks. The RBI took this step to curb the fast rising inflation in consumer prices and speculation in real estate prices.

India, the second largest wheat producer in the world, has banned all exports of wheat for the rest of the year 2007. No wheat was exported in 2006 as the country had to import the commodity for the first time in six years following a weak crop.

German bourse Deutsche Borse has acquired a 5% stake in the Bombay Stock Exchange for Rs 189 crore, putting the value of the oldest stock exchange in Asia at around Rs 3,800 crore or $855 million.

Corporate news

Vodafone announced it would invest two billion dollars over the next couple of years to expand Hutch-Essar into rural India, while promising cheaper mobile rates and better services to customers.

Trading highlights

Newly-listed Cinemax India was the most-active stock today with a turnover of Rs 171.20 crore followed by Infosys and Tata Steel.

Advancers

Aluminium large-cap Hindalco, which was the top decliner on Tuesday, led the advancers today, up 3.9% to Rs 147.60. Other gainers included Reliance Communications adding 2.6% to Rs 451.3, Bharti Airtel surging 3.2% to Rs 761 and ACC gaining 1% to Rs 1,021.6. Oil leader ONGC advanced 1.7% to Rs 900 and Tata Steel rose 1.5% to Rs 438.9.

ONGC Videsh Ltd., the overseas branch of India''''s Oil and Natural Gas Corp. Ltd., announced on Wednesday it had bought a 20% stake in Italian firm Eni’s deepwater block in Congo. In return, ONGC has sold to Eni a 34% stake in its deepwater block in the Mahanadi basin. Index heavy Reliance Industries ended 0.8% higher at Rs 1,377.15 and had a major role in the recovery of the market from the lower level.

Decliners

Banks were the worst hit after the move of RBI on CRR. State-run SBI led the decliners, off 6.1% to Rs 1,101.25, on a volume of 8.31 lakh shares. It has rebounded from a low of Rs 1,085.55. ICICI Bank also shed 4.1% to Rs 915 and HDFC Bank declined 5.2% to Rs 1,016.65.

Auto maker Maruti Udyog lost 3.8% to Rs 857.40, Grasim was down 3.5% to Rs 2,655.85. Bajaj Auto shed 1% to Rs 3,015.16. The company is expecting revenues of Rs 10,000 crore for the current fiscal year with total sales of 28 lakh vehicles. Infosys shed 1.1% to Rs 2,283.95.


8:00 AM Coca-Cola posted Q4 profit decline, hurt by a charge.
Coca-Cola (KO: chart) reported Q4 net income decline of 22% to $678 million, or 29 cents a share, due to a 23 cents a share charge on an impairment at Coca-Cola Enterprises (CCE: chart). Revenue rose 7% to $5.93 billion. Excluding the charge, the company would have earned 52 cents a share, exceeding estimates for earnings of 50 cents a share on revenue of $5.78 billion. Coca-Cola is planning to buy back between $2.5 billion to $3 billion in stock in 2007 after repurchasing $2.5 billion of shares in 2006


7:30AM Asia finishes higher Wednesday with Australia leading the stocks higher.
Asian markets finished mostly higher on Wednesday. Sydney''s benchmark S&P/ASX 200 ended 0.4% higher at 5,960.50. BHP advanced 0.8%, while Rio Tinto added 2.3%. BHP and Rio Tinto were considering individual bids for Alcoa. Shares of Alumina gained 1.5%. In a statement to the Australian Stock Exchange, Alumina stated it does ot have any information about a possible takeover of its U.S.-based partner, Alcoa Inc. The Nikkei in Tokyo finished 0.74% higher at 17,752.64. Sony, Bridgestone and other large-caps gained, tracking gains on US markets on Tuesday. Shares of Sony advanced 3.8% while Bridgestone rallied 4.2% after guiding higher operating profit for the current fiscal year

South Korean benchmark Kospi index closed 1.3% higher at 1,436.10 as tensions over North Korea’s nuclear program subsided. Samsung Electronics rose 1.6% while LG Philips LCD declined 3% after the company said it was asked by the Korea Exchange to clarify speculation that Japanese consumer-electronics company Matsushita Electric Industrial may buy a stake in the company. Hong Kong Hang Seng Index closed 0.4% higher at 20,209.91. Shares of Hutchison Telecom advanced 1.5%. The telecom group plummeted 15% on Tuesday after confirming it had agreed to sell its 67% stake in Indian telecom-operator Hutchison Essar to Vodafone Group for $11.1 billion. Taiwan Weighted Price Index ended 0.9% higher at 7,809.45 and Singapore Straits Times index closed 1.1% higher at 3,182.21. Indonesian benchmark JSX Composite also closed up 1.4% at 1,750.98.


6:30AM Europe trades higher on Wednesday on strength in software, services.
European markets were higher on Wednesday. The benchmark FTSE 100 Index in London increased 11.1, or 0.2%, to 6,392.90 in London in mid-morning trade, breaching the 6,400 level earlier. German Xetra Dax added 25.8 points, or 0.4%, to 6,921.18 and France’s CAC 40 gained 19.8 points, or 0.4%, at 5,702.44.