IT stocks bounced back, led by strong results from TCS. TCS jumped 2.4% to Rs 1,155. After market hours on Monday, TCS reported a 36% growth in net profit to Rs 1,202.93 crore in the first quarter ended June 2007 compared to Rs 882.66 crore in the first quarter of June 2006. Satyam spurted 1.3% to Rs 488 and Wipro gained 1% to Rs 506.

Dr.Reddy's rallied 1.8% to Rs 674, while ITC was up around 1% at Rs 156.

Decliners of the Day

Mahindra & Mahindra shed 2.6% to Rs 800. Other auto stocks which declined were Tata Motors, down 1.4% to Rs 749 and Bajaj Auto off 1.6% to Rs 2,219.

Reliance Communications dropped 2.3% to Rs 561. Reliance Communications, the second-largest wireless company in India, intends to raise investment by more than half this year to 160 billion rupees, or $4 billion, in order to close the gap with Bharti Airtel Ltd.

Metal stocks ended lower on selling pressure. Tata Steel lost 2% to Rs 681, Sterlite Industries slumped 4.5% to Rs 635, JSW Steel dipped 3.4% to Rs 697, and SAIL was off 3% to Rs 153.

BHEL and State Bank of India plunged 2% each to Rs 1,623, Rs 1,580, respectively. Bharti Airtel lost over 1.5% to Rs 863 and HDFC declined also 1.5% to Rs 1,965.

6:30AM European markets fall led lower by oil stocks, banks.

European markets were lower on Tuesday morning. National benchmarks declined in all of the 17 western European markets that were open except for Portugal. The U.K. FTSE 100 index was off 0.4% at 6,671.70, the German DAX index dipped 0.6% at 8,054.32 and the French CAC-40 index shed 0.3% at 6,106.19.

Commodity downgrades

Repsol and Statoil led a retreat in energy stocks after ING recommended selling the shares. Repsol, the biggest oil company in Spain, fell 1.1 %. Statoil, the biggest oil company in Norway, lost 1.3 % and Total the largest refiner in Europe, decreased 0.8 %. ING downgraded Total to hold from buy.

Anglo American and Antofagasta followed copper prices lower and BHP Billiton slipped after Deutsche Bank downgraded shares of the world biggest mining company on gains this year. Anglo American fell 0.7 % and Antofagasta dropped 0.6 %. BHP Billiton declined 1.2 % after Deutsche Bank cut its recommendation on the shares to hold from buy.

In London, U.K. stocks fell for a second day, paced by BHP Billiton and the other metal stocks. Other companies also lost on downgrades. Rolls-Royce dropped 2.4 % after Credit Suisse Group cut its recommendation for aircraft-engine maker to neutral from outperform. Kelda Group, which supplies water to about 4.7 million people in northeastern England, retreated 2.1 % after UBS AG downgraded the shares to reduce from neutral.

In Frankfurt, Germany's main stock index fell for the first time in four days, led by TUI AG, the largest travel company in Europe. Deutsche Postbank and Siemens also declined. TUI dropped 2.1 %. Deutsche Postbank, Germany biggest consumer bank by clients, decreased 1.5 %. Siemens, the largest engineering company in Europe, lost 1.8 %.

In Paris, French stocks fell for the first time in four days, led by Total SA. Renault and Suez also retreated. Renault, the second-largest carmaker in France, declined 1.2 % and Suez, Europe fifth-largest electricity producer, lost 1.6 %.

Currencies

The dollar kept declining Tuesday, slipping against the euro ahead of a key German investor confidence report. The euro bought $1.3793 in early European trading, up from $1.3784 in New York the previous day. The British pound continued to trade around 26-year highs against the dollar Tuesday, buying $2.0375, slightly above the $2.0371 it bought late Monday in New York. The dollar slipped only marginally to 121.80 Japanese yen from 121.82 yen.

5:30AM Gold dips slightly, oil futures climb sharply, agricultural prices tumble.

August gold dipped $1 to end at $666.30 an ounce on the Nymex.

September silver tracked gold lower, edging down 4.5 cents to $13.065 an ounce.

Nymex copper declined 3.1 cents to end at $3.562 a pound.