[R]9:00AM U.S. stock futures pointed slightly higher ahead of Q2 earnings season.[/R]

U.S. stock futures moved slightly higher on Monday ahead of the second-quarter earnings season, with Alcoa (AA: chart) reporting first after market close. The aluminum producer is expected to post strong results on demand in the aerospace sector.

Among pre-market highlights, Lexmark (LXK: chart) fell 12% after it warned over Q2 and Q3 earnings, due to weaker-than-forecast sales of inkjet supplies and pricing. The company projected earnings of 64 cents to 69 cents per share, or 62 cents to 67 cents per share excluding restructuring-related benefits. Lexmark previously expected to earn 82 cents to 92 cents per share for the June quarter.

In deal news, Hexion Specialty Chemicals improved its acquisition offer for Huntsman Corp. (HUN: chart) to $10.5 billion, or $29 a share in cash. Further in M&A action, Carlyle agreed to buy Sequa in a deal worth $2.7 billion. Positive analyst comments helped Home Depot (HD: chart) gain 1.2% in the pre-open. Its stock was upgraded to buy from neutral at Goldman Sachs.

Oil futures and bond yields were also in the spotlight. Crude oil futures fell 42 cents to $72.39 a barrel in electronic trading. S&P 500 futures rose 2 points at 1,544.50 and Nasdaq 100 futures rose 2 points at 2,011.00. Dow industrial futures rose 22 points. Yields on 10-year Treasury bonds on Monday drifted a bit lower to 5.17% in early action.


[R]8:15AM Hexion Specialty Chemicals raised its bid for Huntsman to $10.5 billion.[/R]

Hexion Specialty Chemicals, an Apollo Management L.P on Monday improved its acquisition offer for Huntsman Corp. (HUN: chart) to $28 a share, or $10.5 billion, up from an earlier bid of $27.25 a share. Shares of Huntsman added 1.6% in pre-market trading.

Diversified industrial manufacturing firm Sequa Corp. ((SQA.A)) agreed Monday to be bought by the Carlyle Group in a deal worth $2.7 billion. Under the terms of the agreement, Carlyle will acquire all of the outstanding Class A and Class B shares of Sequa for $175.00 per share in cash. The transaction is a premium of 54% to the closing prices of Sequa''s Class A and Class B shares on July 6.


[R]7:30AM NY-6:30PM Mumbai Sensex settles at record high on rally in banking, IT stocks.[/R]

The Sensex on BSE finished 81.61 points higher, or 0.55%, at 15,045.73.

The market-breadth was very strong as there were more than three advancers for every two decliners. On the broader market, 1,610 stocks advanced, 1,055 declined and only 72 were unchanged. Of the 30 stocks in the Sensex, 21 advanced, while the rest declined. The turnover on BSE was Rs 4,551 crore as compared to Rs 5,878 on Friday. On NSE, the turnover amounted to Rs 9,762 crore, also much lower than 12,038 crore on Friday.

Economic news

India, which is the second largest producer of sugar in the world, is considering doubling the amount of sugar export in 2008 on domestic surplus, adding further pressure on domestic prices. India may export as much as 3 million tons next year.

The rupee was little changed today, already hovering at near nine-year highs, triggering speculation on the market that the Reserve Bank of India may intervene through state-owned banks to stop a drop in exports. The IT sector is the most vulnerable to the rupee’s rise.

Premier Oil, a U.K. explorer, made a discovery of hydrocarbon field in India's northeastern state of Assam. The find is in the Cachar area, 320 kilometers from the state's main city Guwahati, The company did not disclose the size of the discovery or whether it found oil or gas.

Trading highlights

New issue Roman Tarmat was the most active stock on the market with a turnover of Rs 269 crore followed by Vishal Retail and Divi's Labs.

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