11:30AM Stocks erased gains after disappointing economic data.
U.S. stocks erased earlier gains on the heels of disappointing economic data which added to concerns about the slowing U.S. economy. The data showed an unexpected slowdown in the pace of growth in the manufacturing sector and an unexpected drop in construction spending. The economic data overshadowed strong corporate earnings from MasterCard and favorable news in the health-care sector, with drugstore chain CVS Corp. (CVS: chart) and pharmacy benefits manager Caremark Rx Inc. (CMX: chart) in the spotlight due to merger talks. Caremark RX shares jumped 3.4%, while CVS shares fell 7.6%. MasterCard Inc. (MA: chart), owner of the nation's second-largest credit card brand, rose 17% on Q3 profit jump by 82%.

Energy stocks also helped to lead the market lower on the back of steeply falling price of oil. Garmin Ltd. (GRMN: chart) turned into the biggest decliner on the Nasdaq, falling 14%, after the maker of navigational devices reported sales that fell slightly below the forecast. In late morning trading, the Dow Jones industrial average rose 10.57, or 0.09%, to 12,092.50. The Standard & Poor's 500 index rose 0.99, or 0.07%, to 1,378.93, and the Nasdaq composite index fell 2.38, or 0.10%, to 2,364.33.

Crude oil inventories increased.
Crude oil inventories rose in the most recent week, according to government statistics released Wednesday. However, gasoline and distillate stockpiles dropped. The Department of Energy''s Energy Information Administration said that crude oil inventories rose 2 million barrels in the week ended October 27. Specifically, the measure climbed to 334.3 million barrels from the previous week''s level of 332.3 million barrels. Oil inventories for the October 27 week were 4.6% higher than last year. Meanwhile, gasoline inventories showed a week-over-week decline of 2.8 million barrels. The level of gasoline inventories was 2.2% above last year. Distillate fuel oil also had an inventory decline during the week ended October 27. Stockpiles of these products, which include heating oil, fell by 2.7 million barrels.

The ISM’s index dropped unexpectedly.
Wednesday morning, the Institute for Supply Management released its report on business activity in the manufacturing sector in the month of October, showing that the pace of growth in the sector slowed unexpectedly. The ISM said that its purchasing managers index fell to 51.2 in October from 52.9 in September. While a reading above 50 indicates growth in the sector, economists had been expecting the index to increase to edge up to 53.0. The slowdown in the pace of growth in the manufacturing sector reflected slower new orders and production growth. The new orders index fell to 52.1 in October from 54.2 in September, while the production index fell to 51.9 from 56.1. At the same time, the report showed some improvement in employment, as the employment index rose to 50.8 in October from 49.4 in September. With the increase, the employment index is indicating employment expansion. The report also showed that prices contracted for the first time in 15 months, as the prices index fell to 47.0 in October from 61.0 in September. The decrease is partly due to the recent decline by the price of oil.


10:30AM Reliance Industries leads the Sensex 71 points up, above 13,000 level.
The Sensex on BSE finished 71.14 points, or 0.5% higher, on Wednesday to settle at 13,033.04. The market breadth was almost even. For 1,269 shares that advanced on BSE, 1,245 declined and 76 shares were unchanged. From the 30-Sensex stocks 17 advanced while the rest declined. The turnover on BSE was Rs 4,092 crore compared to Rs 4,410 crore on Tuesday. The turnover on NSE was Rs 7,754.12 crore.

Economic news

The central bank of India may raise its overnight borrowing rate to a five-year high as mounting consumer demand threatens to outstrip the production capacity of the companies and stoke inflation. The Reserve Bank of India may lift the reverse repurchase rate by a quarter point to 6.25% either on or before the central bank next monetary policy announcement on Jan. 30.

Most active stocks

Reliance Industries was the most active stock with a turnover of Rs 292 crore followed by Mcdowell, Tech Mahindra, Hindustan Zinc and Alstom Projects.

Advancers

Index heavy Reliance Industries led the rally in Sensex today. Reliance Industries gained 3.2% to Rs 1,266. The stock struck a high of Rs 1,268 which is an all-time high. Reliance Industries surged on reports it will invest $5.2-billion to double the output from its D6 block in Krishna Godavari basin to 80 million standard cubic meters per day (mmscmd). The company had earlier proposed investment of $2.47 billion to produce 40 mmscmd from discoveries - Dhirubhai 1 and 3 (in the D6 block) - out of a total 34 wells.

Cellular service providers advanced on hopes of jump in new subscriptions for the month just gone by. Bharti Airtel gained 2.4% to Rs 543.30 and Reliance Communications added 2.8% to Rs 389.65.

Cement stocks were also in focus. Gujarat Ambuja Cements added 2% to Rs 119.60, ACC gained 1.5% to Rs 983 and Grasim edged higher 0.8% to Rs 2,770 on reports cement manufacturers have lifted cement prices by Rs 5 per 50 kg bag in Maharashtra and Gujarat. Manwhile, Gujarat Ambuja today posted 6% growth in cement shipments for the month just gone by.

Hindustan Lever also gained 1.1% to Rs 236.25 building up on gains during the previous day after it reported a 17.5% rise in quarterly earnings. Power equipment large-cap BHEL rose 2% to Rs 2,463. Last week, BHEL posted sharply higher net profit for second-quarter, September 2006 which however was did not meet market expectations. The company is sitting on a robust order book position.

BPCL was up 2.5% to Rs 410.80 after the quarterly net profit of the state-run oil refining and marketing company rose sharply. Engineering & construction large-cap L&T advanced 1.3% to Rs 1,330. Infosys was up Rs 9 at Rs 2,104.

Some banks also surged. Recently listed Development Credit Bank soared almost 10% to Rs 46.25 on a high volume of lakh shares. State Bank of India gained 2.3% to Rs 1,121.

Carmakers ended mixed. Hero Honda gained 1.2% to Rs 765. Honda Motors said on Wednesday it sold 3,63,480 units in October 2006, up 20.4% from 3,02,012 in the same month last year.

Decliners

Auto large-cap Maruti Udyog finished flat at Rs 968.25. Maruti Udyog announced on Wednesday it sold 60,163 vehicles in October, up 16.7% from 51,543 units in the same month last year. Bajaj Auto shed 0.2% to Rs 2,744. The company stated on Wednesday its total vehicle sales in October 2006 advanced 15.6% to 2,79,578 units from 2,41,808 units a year earlier.