Robust same-store sales growth at Argos made parent company, Home Retail Group, raise full-year guidance and sent its shares 3.9% higher. The other advancers included Gallaher, the tobacco group, up 0.1%.

PartyGaming, up 10.5%, was one of only a few mid-cap gainers lifted by talk that the Democrats in Congress could reverse the US ban on online gambling

Decliners

The biggest decliner on the market was HBOS, the mortgage lender, which was down 4 %, although the decline was worsened by the stock moving ex-dividend. Of the other banks, Royal Bank of Scotland was 3.6% lower and Barclays lost 2.9%.

Man Group, the listed hedge fund, dipped 4.2% while Amvescap, the fund manager with a high exposure to US markets, was 2.9% lower and venture capital group 3i was down 2.8% as investors once more felt less ready to risk. The mining sector was also badly hit, with Anglo American down 3.4% and Lonmin off 3.3%.


9:00AM U.S. stock futures pointed slightly lower, despite a lower-than-expected rise in import prices.
U.S. stock futures were indicating a slightly weak opening, as concerns over the troubled sub-prime mortgage business continued to weigh on global markets. Disappointing results from General Motors and Lehman Bros. also generated negative mood, helping to offset a smaller-than-expected rise in import prices. Import prices rose 0.2% in February, below expectations of a 0.7% gain. Excluding fuels, prices declined 0.2%, the biggest drop since July 2005. Among pre-market highlights, General Motors (GM: chart) said it swung to profit in Q4, earning $950 million on revenue of $51.2 billion. Earnings excluding non-recurring items were 32 cents a share, well off the average analyst estimates of earnings of $1.19 a share. It also announced it is refunding $1 billion to GMAC, due to losses at its residential mortgage business. The stock dropped 2.5% in pre-market trading.

Lehman Brothers (LEH: chart) reported fiscal Q1 results a day after its peer Goldman Sachs posted strong financial results. The company reported earnings increase to $1.15 billion, or $1.96 a share, from $1.09 billion, or $1.83 a share, a year earlier, coming in line with expectations. One off the companies badly affected by the subprime jitters, Accredited Home Lenders (LEND: chart) rallied 21% to $4.76 in the pre-open, rebounding from a steep drop of 65% on Tuesday. Among mortgage lenders, NovaStar Financial (NFI: chart) tacked on 2% ahead of the open and Countrywide Financial (CFC: chart) climbed 2.2%. S&P 500 futures slipped 1.70 points to 1,390.20 and Nasdaq 100 futures gave up 1.25 points to 1,743.00. Dow industrial futures slipped 25 points to 12,164.


8:00AM NY-7:00PM Mumbai Sensex tumbles 453 points on funds selling.
The Sensex on BSE closed 453.36 points lower, or 3.49%, at 12,529.62. The market-breadth was negative as there were more than two decliners for every advancer. For 740 stocks that advanced on BSE, 1,772 declined and 66 remained unchanged. Of the 30 stocks in the Sensex, only two advanced and 28 declined. The turnover on BSE was Rs 4,284 crore, compared with Rs 4,193.74 crore on Tuesday. The turnover on NSE was Rs 8,670.09 crore, higher than Rs 8,132.81 on Tuesday.

Economic news

The production of six core industries moved up 8.7% in January 2007 when compared with 8.2% in January 2006. However, supply side limits continued to affect the cement industry. The six industries include crude petroleum, petroleum refinery products and electricity generation.

The Steel Ministry said it was concerned over the increase in iron ore exports, which could pose a serious threat to the growth of domestic industry. From 41 million tonnes in 2001-02, iron ore exports had more than doubled to 100 million tonnes by latest estimates.

Arcelor-Mittal is a favorite to buy the assets of Sesa Goa, the largest private miner in India. Arcelor-Mittal is a front-runner with a bid of Rs 2,050 a share. Other prominent contenders such as JSW Steel and CVRD earlier dropped out on high valuations. Reportedly, companies like Vedanta Resources and Essel Mining might also be in the race.

Trading highlights

MindTree was the most active stock with a turnover of Rs 824 crore followed by Parsvnath and Tech Mahindra.

Advancers

Bajaj Auto rose 0.4% to Rs 2,529.30, off the session low of Rs 2,451.05 on strong 1.4 lakh shares traded on BSE. Gujarat Ambuja was slightly up 0.2% at Rs 106.15. Cement large-caps pared losses. Volumes in the stock were considerable, at 27.6 lakh shares on BSE.

Decliners

Banks were heavily hit. ICICI Bank led the decline with a drop of over 5% to Rs 830. State Bank of India lost 3.7% to Rs 944.10 and HDFC Bank lost 2.6% to Rs 934. Telecoms were also down. Bharti Airtel slumped 4.7% to Rs 729. Reliance Communications dropped almost 4.4% to Rs 398.5.