10:30AM The Sensex notches modest gain after hitting record high earlier.
The Sensex in India ended with a gain of 46.97, on 10,923.16, reaching the 11,000 mark earlier in the trading session. The market-breadth was strong. For 1,488 shares that advanced, 975 declined and 72 shares were unchanged. The turnover on BSE was Rs 2,931 crore, higher than Wednesday’s Rs 2,666 crore.

Ranbaxy led the gainers, advancing 3% to Rs 389.50 in the wake of a U.S. federal appeals court decision to invalidate a secondary Pfizer patent, paving the way for an earlier launch of a generic form of Lipitor, the U.S. pharma company’s cholesterol drug. ICICI Bank climbed 1.1% to Rs 554.05 after its ADR advanced 2% on Wednesday to $ 26.55.

HDFC Bank also notched up 1.8% to Rs 794 as its ADR advanced 0.7% on Wednesday to $ 53.45. Housing finance large-cap HDFC gained 1.7% to Rs 1,212, raising lately home loan rates across the board by 50 basis points. Bharti Airtel advanced 1% to Rs 397.45 after reporting that it had given a $107 million outsourcing contract to IBM. Grasim also moved up 1.79% to Rs 2,116.40 and Bajaj Auto gained 1.48% to Rs 2,581.00.

Sugar stocks soared due to reports that the government had partially lifted its ban on sugar exports. Dwarikesh Sugar surged 12% to Rs 121, Dhampur Sugar jumped 10.8% to Rs 109, Balrampur Chini Mills advanced 7% to Rs 96.80, Bannari Amman Sugar climbed 5% to Rs 1,020.30 and DCM Shriram Consolidated advanced 5% to Rs 83.90.

Reliance Industries slipped 0.5% to Rs 985, sharply off the session’s high of Rs 1,007.45. As for reports, Reliance Industries has raised petrochemical prices between 3% and 9% in August 2006. Hindustan Lever also lost 1.8% to Rs 223.75 and cigarette large-cap ITC slid 1.3% to Rs 171. Oil exploration company ONGC was off 1.4% to Rs 1,176. Other decliners included BHEL with a loss of 1.60% to Rs 2,118.75, Dr Reddy''s lost 0.75% to Rs 1,407.95 and ACC shed 0.67% to Rs 861.95.

Great Eastern Shipping lost 1.6% to Rs 219.65 following the company comment that its board had decided not to proceed with the demerger of its offshore business as the six-month timeline to complete the process had passed.


9:45AM Stocks opened in the negative.
U.S. stock markets opened in the negative, reflecting growing concerns about further interest rate increases after a pair of European central banks raised interest rates. Mixed monthly retail sales also contributed to the negative mood. The stock market''s decline came despite a slight rise in weekly first-time unemployment claims. First-time claims rose to 315,000, up from 301,000 the previous week.

Wal-Mart Stores Inc. (WMT: chart) gained 0.3% after reporting a 2.4% gain in same-store sales. Limited Brands Inc. (LTD: chart), operator of retailers such as Victoria''s Secret and Bath & Body Works, rose 3.6% after posting a 7% jump in same-store sales. Target Corp. (TGT: chart) posted a lower-than-expected 3.1% increase in same-store sales, sending company’s shares down 1%. Gap Inc. (GPS: chart) dropped 3% after the clothing retailer said its sales dropped 4 percent for July.

The early weakness was partly due to some disappointing earnings news. Conglomerate Tyco International Ltd. (TYC: chart) said its quarterly profits fell from a year ago due to one-time charges and stock option expenses. In midmorning trading, the Dow Jones industrial average fell 29.86, or 0.27%.

Commodity stocks were among the worst performers in the first half hour of trading. Oil prices fell as the storm in the Caribbean lost strength overnight, dragging energy stocks lower. The gold sector also declined in the early going, sliding by about 1.8%. The coal sector continued the profit taking that began in the previous session. Telecommunications stocks also came under pressure in early trading, with Sprint Nextel (S: chart) helping to lead the sector lower after the company reported Q2 earnings that fell sharply year-over-year. Internet stocks moved modestly higher during Thursday''s early trading, with eBay (EBAY: chart) rising 1.5%. The drug, chemical and bank sectors also posted some strength. The Standard & Poor''s 500 index lost 6.08, or 0.48%, and the Nasdaq composite index dropped 14.16, or 0.68%. Bonds fell in response to the European rate hikes, with the yield on the benchmark 10-year Treasury note rising to 4.98% from 4.96% late Wednesday.


Initial jobless claims rose more than expected.
Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended July 29. The report showed that jobless claims rose more than economists had been expecting. The report said that initial jobless claims rose to 315,000 from the previous week''s revised figure of 301,000. Economists had expected jobless claims to increase to 305,000 compared to the 298,000 originally reported for the previous week. The Labor Department also said that the four-week moving average rose to 313,750 from the previous week''s revised average of 313,500. The increase comes after the less volatile moving average fell in the two previous weeks. The report also showed that continuing claims in the week ended July 22 rose to 2.498 million from the preceding week''s revised level of 2.469 million. The bigger than expected increase in jobless claims may raise some concerns about the strength of the July employment report due to be released on Friday. The report is expected to show that the U.S. economy added 150,000 jobs in July.


9:00AM Stock futures pointed to a lower start on rates worries
U.S. stock futures moved lower, following a surprising interest-rate increase by the Bank of England''s which raised concern about more global rate increases. Negative sentiment was also generated by disappointing sales report from Starbucks Corp. (SBUX: chart), weighing on the outlook for consumer spending. Starbucks shares dropped 9.6% before the bell on the Inet.

The Bank of England on Thursday surprisingly hiked its key interest rate by a quarter point to 4.75%. That move was followed by the European Central Bank''s raising interest rates, also by a quarter point, to 3%. The Fed Reserve will meet on Tuesday to decide on rates.

Automaker Ford Motor Co. (F: chart) on Wednesday said its Q2 loss was more than double what it previously reported due to higher pension-related costs. Ford shares dropped 4%. Medical device maker Medtronic Inc. (MDT: chart) warned its quarterly revenue and earnings would fall short of expectations due to a decline in the U.S. market for its implantable devices. The stock dropped more than 9% on Inet. S&P 500 futures were down 5.30 points, below fair value. Dow Jones industrial average futures fell 36 points, and Nasdaq 100 futures were down 7.75 points.


Cooper Tire & Rubber Co, (CTB: chart), manufacturer of replacement tires, reported its Q2 loss widened to 34 cents a share, from 11 cents a share, in the year-ago period. On a continuing operations basis, the company lost 10 cents a share in Q2. Sales advanced to $624.8 million from $510.9 million in the same period a year earlier. The company missed analysts’ estimate for a loss of 7 cents a share.

Patterson-UTI Energy Inc, (PTEN: chart), provider of onshore contract drilling services, reported that Q2 net income more than doubled on 63% higher revenue. Net reached $1 a share, from 43 cents, in the year-earlier period. The company beat analysts’ expectations for earnings of 95 cents for PTEN. Revenue grew to $637 million from $390 million.