1:00PM European markets closed lower, pressured by tech and automotive shares
European stocks finished lower on Wednesday, reflecting cautiousness ahead of a U.S. interest rate decision, weakness in the technology sector and losses for car makers after a jump in oil prices. Technology shares slipped after a disappointing sales forecast from SanDisk Corp. Chipmaker Infineon Technologies shed 1.8%, STMicroelectronics dipped 0.8% and ASML Holding lost 0.5%. Shares in Peugeot fell 2.4% and Michelin slid 2.7% in Paris. In Frankfurt, DaimlerChrysler AG slipped 1.7% and shares of airline Deutsche Lufthansa shed 1.4%. However, Corus Group rallied 6.8% after India''s Tata Steel won a bidding war for the Anglo-Dutch company with a 6.2 billion pound bid. Vodafone Group added 0.7% after its customer base broke a key level. The U.K. FTSE 100 fell 0.6%, the French CAC 40 declined 0.7%, while the German DAX 30 ended flat at 6,789.11.


11:30AM Altria Group released details on tax-free Kraft Foods spinoff.
Altria Group Inc. (MO), food and tobacco company, released on Wednesday the long-awaited details for its planned spinoff of Kraft Foods Inc. (KFT) It said that it will distribute the 89% of the company it owns to its shareholders on March 30. Each Altria shareholder will get 0.7% of a share of Kraft for each share of Altria they own as of March 16, and they will receive cash in lieu of fractional shares for amounts of less than one Kraft share with an exact distribution ratio to be determined later. Before the distribution, Altria will convert its Class B shares of Kraft, which carry 10 votes per share, into Class A shares, which carry one vote per share and it will not own any shares of Kraft following the spinoff. Right after the distribution of Kraft shares, Altria will adjust its dividend so that Altria''s shareholders keeping their Kraft shares will get the same amount as before the transaction. Shares of Altria were up 0.5%, while Kraft slipped 1.7%.


11:00AM U.S. stock averages traded mixed ahead of Fed Reserve’s decision.
The three major market averages were mixed in early trading hors, awaiting the Fed Reserve’s interest-rate decision. The Dow traded higher largely due to a significant advance by shares of Boeing (BA). The aerospace giant was up 4.5% after the company reported Q4 earnings that came in well above analyst estimates. The company also raised its full year 2007 earnings guidance to between $4.55 and $4.75 per share.

The tech-heavy Nasdaq moved to the downside due to weakness among technology stocks amid disappointing quarterly results. Networking stocks posted considerable weakness, with Juniper Networks (JNPR) helping to lead the sector lower after the company did not report earnings for the third straight quarter due to a stock-options investigation. The stock dropped 7%. Disk drive stocks also came under pressure, with share of SanDisk (SNDK) down 8.1% after reporting a Q4 loss versus a year ago profit. In midmorning trading, the Dow Jones industrial average was up 12.98, or 0.10%, at 12,536.29. The Standard & Poor''s 500 index was down 1.89, or 0.13%, at 1,426.93 and the Nasdaq composite index was down 9.70, or 0.40%, at 2,438.94. Bonds rose moderately following the flurry of economic data, with the yield on the benchmark 10-year Treasury note falling to 4.87% from 4.88% late Tuesday.

Construction spending fell 0.4% in December.
The Department of Commerce released its report on construction spending in the month of December on Wednesday, showing that spending unexpectedly fell compared to an upwardly revised reading for the previous month. The report showed that construction spending fell 0.4 percent in December following a revised 0.1 percent increase in November. Economists had expected spending to come in unchanged compared to the 0.2 percent decrease that was originally reported for the previous month. The decrease in construction spending came as a drop in spending on private construction more than offset an increase in spending on public construction. The report showed that private construction fell 0.8 percent in December, as a 1.6 percent decrease in residential construction spending more than offset a 0.9 percent increase in non-residential construction spending. At the same time, spending on public construction rose 0.6 percent, benefiting from a 1.8 percent increase in education construction spending. Highway construction spending fell 1.1 percent.


10:30M Mumbai Sensex declines in volatile trade, Tata Steel plummets.
The Sensex on BSE finished 121.04 points, or 0.85%, lower to 14,090.92. The index traded in a range of 223 points for the day in a volatile session. The market-breadth was negative. As 1,706 shares declined, 939 advanced and 43 remained unchanged. Of the 30 stocks in the Sensex, 19 declined while the rest advanced. The turnover on BSE was Rs 5,099 crore, higher than Rs 3,703 crore on Monday. On NSE, the turnover was Rs 10,330.87 crore, compared to Rs 8418.37 crore on Monday.

Economic news

Government of India revised upwards its fiscal 2006 GDP growth estimate to 9.0% from an earlier estimate of 8.4%. Manufacturing output growth was revised to 9.1% from 9.0% and farm output was revised to 6.0% compared to 3.9% for the same period a year ago.

Standard & Poor’s upgraded India long-term sovereign credit rating on Tuesday to investment grade. The bank issued a stable outlook for the rating. India became the 13th country rated by S&P to have emerged from non-investment grade to investment grade.

The Reserve Bank of India lifted its key short-term lending rate on Wednesday to its highest level in nearly four years on inflation worries. The main lending rate, known as the repo rate, was raised to 7.50% from 7.25%, but the Reserve Bank kept its reverse repo rate unchanged at 6.0%.

Trading highlights

Tata Steel Ltd. won the auction for U.K. Corus Group Plc for 6.2 billion pounds, or $12 billion, making the deal the largest acquisition by an Indian company. Tata topped the deal proposed by CSN of Brazil in a three-month race. In its final bid, Tata has offered Corus investors 608 pence per share in cash, compared to a final bid of 603 pence from CSN.

Most-active

Tata Steel was the most-active stock with a turnover of Rs 279.20 crore followed by Shree Ashtavinayak and Pyramid Saimira.

Decliners

Tata Steel led the decliners in the Sensex, as it plummeted 11.10% to Rs 461.80. Tata Steel reported 41.1% growth in Q3 net profit to Rs 1,063.75 crore, on 21.4% growth in net sales to Rs 4,469.98 crore. Other prominent decliners included Hindalco shedding 3.24% to Rs 174.85, Hindustan Lever dipping 3% to Rs 207.45 and Wipro losing 2.66% to Rs 614. Tata Motors also lost 2.5% to Rs 878.

Index heavy Reliance Industries declined 1.52% to Rs 1,360.75. ACC and Grasim dipped 2% each to Rs 1,020 and Rs 2,770, respectively. L&T lost 1.5% to Rs 1,587, ICICI Bank sagged 1.5% to Rs 940. ONGC finished 1% lower to Rs 903. ONGC announced its Q3 net profit rose 20%, topping forecasts of 6% rise in net profit.