Rate Worries Unnerve Stock Futures in NY

Elena
28 Jun, 2007
New York City

U.S. stock market futures pointed slightly lower, reflecting cautiousness ahead of the Fed Reserve

[R]9:00AM Market futures declined ahead of rate decision.[/R]

U.S. stock market futures pointed slightly lower, reflecting cautiousness ahead of the Fed Reserve’s interest-rate decision and economic outlook. Rates are expected to remain unchanged at 5.25%. Rising oil futures and a profit warning at Novellus Systems further weighed on the sentiment, helping to offset a broker upgrade of Intel.

Novellus Systems ((NVLS)) fell 6.7% in pre-open trade after it said it expects Q2 revenue and earnings at the low end of its previous guidance. Intel ((INTC)) rose 1.4% in pre-open trading after it was upgraded to overweight from equal weight at Lehman Brothers on robust sales forecast. Afain in the tech sector, LSI ((LSI)) dropped 7% after the company said it expects lower than expected Q2 revenue, leading to 900 job cuts.

Amonh oother pre-market highlights, General Mills ((GIS)) reported earnings slightly below forecast. Constellation Brands ((STZ)) earnings on an adjusted basis came in analyst estimates. S&P 500 futures fell 1.3 points at 1,517.60 while Nasdaq 100 futures were up 1.5 points at 1,957.00. Dow industrial futures fell 15 points.


[R]7:30AM NY-6:30PM Mumbai Sensex ends higher on rally in cement stocks.[/R]

The Sensex on BSE finished 73.51 points higher, or 0.51%, at 14,504.57.

The market-breadth was strong as 1,442 stocks advanced, while 1,141 declined and only 72 were unchanged. Of the 30 stocks in the Sensex, 19 advanced, while the others declined. The turnover on BSE was Rs 4,682 crore, compared with Rs 4,844 crore on Wednesday. On NSE, the turnover surged to Rs 12,193 crore, much higher than Rs 9,375 crore on Wednesday.

Economic news

Finance Minister P Chidambaram said in an interview on a television channel that the government has no intention of controlling the price of cement, nor was there any control recently.

U.S. wheat growers announced that they might not take part in a tender by India which tries to buy 1 million tons of wheat as the U.S. and India has not resolved problems over import quality standards.

The rupee advanced after a four-day decline on banks buying in the Indian currency to meet cash requirements as the overnight borrowing rate surged to a six-week high. The rupee gained 0.2% to 40.905 against the dollar this morning in Mumbai.

Trading highlights

IFCI was the most active stock with a turnover of Rs 137.50 crore followed by new issue Meghmani Organics and Reliance Industries.

Advancers

Cement stocks rallied on the Indian finance minister P Chidambaram’s statement. ACC soared 8.3% to Rs 899. Gujarat Ambuja Cements surged 7.4% to Rs 125, and Grasim rallied 4.8% to Rs 2,624.

HDFC rallied 5% to Rs 1,958 after it got Rs 445 crore for its stake sale in BPO firm Intelenet to Blackstone, which in a total capital gain comes to Rs 381 crore on its BPO venture. Ranbaxy Laboratories, the pharmaceutical giant, gained 1.5% to Rs 348. Ranbaxy Pharmaceuticals Inc, its wholly-owned subsidiary, has started selling Pravastatin Sodium 80 miligram tablets in the US.

State-run banking large-cap State Bank of India gained 1.6% to Rs 1,470. Reportedly, SBI intends to launch a private equity fund worth $1 billion. ITC and Wipro advanced 1% each at Rs 155 and Rs 515, respectively.

Decliners

Auto makers lost on profit taking. Bajaj Auto led the decliners in the Sensex, down 1.8% to Rs 2094 as the stock went ex-dividend today, Tata Motors dipped 1% to Rs 665 and Maruti Udyog declined 0.3% to Rs 750.

Oil exploration large-cap Oil & Natural Gas Corporation declined 1.6% to Rs 906 and Cipla lost over 1% each to Rs 203. Index heavy Reliance Industries shed 0.3% to Rs 1,692.


[R]6:30AM European markets advance on energy and mining stocks.[/R]

European markets are higher on Thursday. The German DAX 30 index advanced 1% to trade at 7,880.13, the French CAC-40 index advanced 0.9% at 5,996.38, and the U.K. FTSE 100 index rose 0.7% at 6,571.80. National benchmarks increased in all of the 17 western European markets that were open.

Advancers

In Germany, the advances of more than 2% put sportswear group Adidas and truck maker Man in the lead. In France, turbine maker Alstom and yogurt producer Danone rose 1.8% each and boosted the market. Nestle climbed 2.5% as Deutsche Bank raised its recommendation on the shares to buy from hold.

BP gained 1.9% and Statoil ASA, largest producer of oil and natural gas in Norway, rose 1.7%. Royal Dutch Shell also advanced 2.1%.

Miners were also strong as the price of copper gained. BHP Billiton climbed 1.6% and Rio Tinto Group, the world third-biggest mining company, added 1%.

Shares in Vodafone Group rose 2% after a report from Dutch technology magazine Bright that the firm is likely to supply Apple Inc iPhone in Europe, starting in December.

Decliners

Diageo slid 1.3% even as the world biggest liquor company announced revenue growth accelerated in the fiscal second half.

Commodities

Oil prices advanced Thursday tracking a U.S. government report that showed an unexpected drop in gasoline stocks. Crude oil for August delivery gained 24 cents to $69.21 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. The Brent crude contract for August delivery gained 12 cents to $70.67 a barrel on the ICE Futures exchange in London.

Gold gained for a second day in London on speculation higher oil costs will revive demand for the metal. Gold for immediate delivery climbed $2.40, or 0.4%, to $645.90 an ounce. Silver increased 18.49 cents, or 1.5%, to $12.46 an ounce.

Currencies

The dollar fell against the euro Thursday as markets awaited the U.S. Federal Reserve interest rate decision. In morning European trading the euro bought $1.3462, up from $1.3445 in late New York trading on Wednesday. The British pound was at $2.0017, up from $1.9978 the night before, while the dollar rose to purchase 123.11 Japanese yen from 122.43 in New York.