[R]9:00AM U.S. stock futures advanced, boosted by Morgan Stanley earnings and $22.5 billion buyback at Home Depot.[/R]

U.S. stocks advanced in pre-open trading on Wednesday, boosted by higher-than-expected earnings from Morgan Stanley and lower bond yields. The bond market has continued its recovery, with the benchmark 10-year Treasury bond was down 5/32 to 95 11/32, yielding 5.103%.

Morgan Stanley (MS: chart) advanced 2.2% after posting 40% earnings increase, beating analyst estimates. Positive sentiment was also generated by a $22.5 billion share buy-back from Home Depot (HD: chart). The Dow component shares jumped 6.2% in the pre-open.

Among other pre-market highlights, Circuit City (CC: chart) dropped 2.6% in the pre-open after the electronics retailer posted Q1 loss of $54.6 million, or 33 cents per share, compared with a profit of $6.4 million, or 4 cents a share. Revenue fell 4% to $2.49 billion from $2.6 billion a year ago, as more customers purchased low-margin products. Analysts had expected a loss of 32 cents per share on revenue of $2.44 billion.

Shares of FedEx Corp. (FDX: chart) moved slightly higher after it reported a 7% quarterly profit increase. Futures for the Dow Jones Industrial Average were up 55 at 13,810, while those for the S&P 500 index rose 4.70 points to 1,553.


[R]8:15AM Morgan Stanley reported 40% earnings increase in Q2.[/R]

Morgan Stanley (MS: chart) announced that its Q2 net income rose 40% to $2.58 billion, or $2.45 a share, from $1.84 billion, or $1.75 a share a year ago. Company’s revenue increased 32% from the previous year to $11.5 billion. Quarterly results exceeded expectations of net income of $2.01 a share on revenue of $10.03 billion. The No. 2 U.S. investment bank attributed the earnings rise to fees from advising clients on acquisitions and stock trading. The stock jumped 1.7% in pre-market trading.


[R]7:30AM NY-6:30PM Mumbai Sensex spurts 116 points in a broad rally, led by banks and auto stocks.[/R]

The Sensex on BSE finished 116.45 points, or 0.81%, higher at 14,411.95.

The market-breadth was very strong as 1,446 stocks advanced, while 1,103 declined and 87 were unchanged. Of the 30 stocks in the Sensex, 23 advanced, while only seven declined. The turnover on BSE was Rs 5,049 crore, much higher than Rs 4,607 crore on Tuesday. On NSE, the turnover was Rs 9,977 crore, compared to Rs 8,350 crore on Tuesday.

Economic news

The rupee retreated Wednesday as an oil refiner bought dollars, but expectations of foreign investment flows into a $2.1 billion domestic share sale by ICICI Bank diminished losses. In morning trading, the rupee was at 40.83 per dollar, down from 40.79 on Tuesday.

India will approach the World Bank to take out a loan to develop an e-governance project to process all government purchases.

The petroleum ministry intends to offer additional 80 oil and gas blocks in the seventh round of auction under the New Exploration Licensing Policy, in mid-August. In February, under NELP-VI, the ministry gave 52 blocks of which 21 deep-water blocks to Oil and Natural Gas Corporation.

Trading highlights

Divi''s Lab was the most-active stock with a turnover of Rs 165 crore followed by Reliance Capital and Educomp Solutions.

Advancers

Cement major Gujarat Ambuja Cements advanced 4.6% to Rs 118, led the gainers. Other cement stocks gained as cement shortage is expected to last for the next two years. ACC was up 0.8% to Rs 850 and Grasim advanced 3.1% to Rs 2,513.