[R]4:30PM NY – 10:30PM Frankfurt – 3:00AM Mumbai[/R]
New home sales in the U.S. rose 3.4% to an annual pace of 1.05 million and crude oil fell 1.4%. GM rose 2.8% and Apple fell as much as 5% before recovering on option scandal worries.

Yield on 10-year bond closed at 4.601% and the 30-year bond closed at 4.750%.

Gold gained $3.40 to close at $630.30 a troy ounce, silver increased 16.5 cents to end at $12.89 a troy ounce and copper advanced 3.4 cents to close at 291.20 cents per pound.

Oil declined 72 cents to close at $60.38 a barrel and heating oil lost 1.43 cents to finish at 160.90 cents a gallon. Gasoline was up 1.53 cents to end at 158.75 cents a gallon. Natural gas decreased 27.5 cents to close at $5.838 per mBtu.

Asian markets closed higher led by Hong Kong with a gain of 2.10%, India with an increase of 1.10% and Australia with an advance of 0.69%. The decliners were Thailand with a loss of 2.23% and South Korea with a decrease of 0.62%. Japan''s stocks ended higher led by gains in Toyota Motor Corp. on reports that the company has held talks with Ford Motor Co. that may lead to possible tie-up.

European markets closed higher helped by weaker oil prices and speculation over possible consolidation in the automotive sector. The advancers were led by Germany with an increase of 1.63%, France with a gain of 1.58% and Netherlands with an advance of 1.43%. There were no decliners.

Latin America markets finished higher led by Brazil with a gain of 2.12%, Mexico with an increase of 1.64% and Argentina with an advance of 1.41%. There were no decliners.

[R]1:00PM European markets closed notably higher on weaker oil and possible consolidation in the automotive sector.[/R]
European stocks closed sharply higher on Wednesday, boosted by weaker oil prices and speculation over possible consolidation in the automotive sector. Lower oil prices along with confirmation that top Toyota and Ford executives met in recent days lifted auto shares such as DaimlerChrysler and Renault. Each of them rose 3%. The French CAC 40 climbed 1.6%. The German DAX 30 climbed 1.6%, led by steelmaker ThyssenKrupp and carmakers DaimlerChrysler and BMW. Shares of KarstadtQuelle rose 0.9% after agreeing to buy the half it didn''t already own in travel agent Thomas Cook from Deutsche Lufthansa for 800 million euros. London FTSE 100 rose 0.9%, helped by various stocks. Brewers Diageo and SABMiller each rose at least 1.6% and cigarette maker British American Tobacco added 1.5%. InterContinental Hotels rose 2.9% in London on bid speculation. U.K. clothing retailer Moss Brothers soared 15% on takeover speculations, too.

Crude oil prices were flat ahead of oil inventories report, expected to show another decline in stockpiles. Crude oil January contract fell 10 cents to $61 a barrel. Heating oil fell to $1.6205 a gallon. Gasoline added to $1.60. Natural gas futures slipped 18 cents to $5.93 per 1,000 cubic feet. The U.S. dollar traded lower against its major currency rivals. The euro was quoted at $1.3131, up from $1.3111. The dollar bought 118.65 yen, down from 119.18. The British pound was quoted at $1.9559, up from $1.9534. European gold prices advanced. In London, gold traded at $627 per troy ounce, up from $623.70. In Zurich, the precious metal traded at $625.25 per ounce, up from $617.35. Silver closed at $12.72, up from $12.60.


[R]11:30AM Homebuilders advanced on strong home sales data.[/R]
The U.S. market averages have continued to perform well over the course of morning trading, benefiting from strong home sales data and retreating oil prices. The Commerce Department reported that sales of new homes rose 3.4% in November to a seasonally adjusted annual rate of 1.047 million, helped by solid sales increases in every region of the country but the South. Homebuilders Hovnanian Enterprises (HOV: chart) and Toll Brothers (TOL: chart) rose 1.7% and 2.3%, respectively. Other notable gainers included Ryland (RYL: chart), up 2.7% and Lennar (LEN: chart), rising 2.4%.

The biggest U.S. retail chains turned mixed after a report confirmed that sales were not as strong in the pre-Christmas holiday shopping period. Wal-Mart Stores Inc.(WMT: chart) rose 3 cents to $46.15, Federated Department Stores Inc. (FD: chart) rose 1.4%, while Target Corp. (TGT: chart) fell 0.2%. Notable gains by gold, brokerage, and internet stocks also contributed to the market strength. Oil service stocks posted some strength, despite the continued decline by the oil price.

In late morning trading, the Dow Jones industrial average rose 73.54, or 0.59%, to 12,481.17.The Standard & Poor''s 500 index was up 6.07, or 0.43%, at 1,422.97, and the Nasdaq composite index rose 10.72, or 0.44%, to 2,424.23. The two-day advance leaves major indexes heading toward double-digit gains for the year. The Dow is now up 16.5% this year, while the Nasdaq has risen almost 10% and the S&P 500 up 13.9%. Bonds were little changed, with the yield on the benchmark 10-year Treasury note rising to 4.61% from 4.60% late Tuesday.


[R]New home sales climbed 3.4% in November.[/R]
Wednesday morning, the Department of Commerce released its report on new home sales in the month of November, showing that sales rose more than economists had been expecting. The increase reflected strong sales growth in the Northeast, Midwest, and West. The report showed that new home sales rose 3.4 percent to a seasonally adjusted annual rate of 1.047 million units in November from a revised 1.013 million unit rate in October. Despite the increase, new home sales were down 15.3 percent year-over-year. Economists had been expecting new home sales to increase to a 1.015 million unit rate compared to the 1.004 million unit rate originally reported for the previous month. As mentioned above, the new home sales growth came as new home sales rose 22.5 percent in the Northeast, 22.4 percent in the Midwest, and 19.0 percent in the West. New home sales in the South bucked the uptrend, falling 9.3 percent. The report also showed that the median sales price of new houses sold in November was $251,700, while the average sales price was $294,900. The Commerce Department added that the seasonally adjusted estimate of new houses for sale at the end of November was 545,000, representing a supply of 6.3 months at the current sales rate.


[R]10:30 AM The Sensex advanced on Wednesday in a broad-based rally.[/R]
The Sensex on BSE finished 151.35 points, or 1.10%, higher at 13,859.69. The market-breadth was strong as 1,358 shares advanced, 1,263 declined and 82 remained unchanged. From the Sensex stocks, 23 advanced, while the rest declined. The turnover on BSE was Rs 3,637 crore, higher than Rs 3,045 crore on Tuesday. The turnover on NSE was Rs 7,083.45 crore, compared to Rs 6,163.81 crore on Tuesday.

Economic news

Direct foreign investment in India is likely double to $11 billion in the fiscal year ending March 2007, Commerce Minister Kamal Nath said in a government statement. Previous year foreign investment inflows were $5.5 billion.

There are no signs that Indian economy is overheating. It is able to sustain the current 8% to 9% growth for a long period, as long as the supply side is run well and domestic savings grow, an Assocham survey has stated.