10:00AM New York, 7:30PM Mumbai - Cabinet to decide on fuel price hike tomorrow. Tata Motors completes Jaguar take over. Satyam faces potential liability of more than $1 billion in a legal case against a former client.

The benchmark index Sensex fell on Tuesday as fears gripped the market that communist parties may withdraw support to the government and force early election on the nation.

The Revolutionary Socialist Party with a socialistic development agenda is likely to pull out of the United Progressive Alliance-Left coordination committee.

RSP has been seeking withdrawal of support to the UPA government since last three years. According to reports, the party is now planning to step up pressure on the other parties to withdraw their support to the ruling coalition.

Market Sentiment

In Mumbai trading, the 30-share BSE Sensex declined 0.6% or 100.62 at 15,962.56. On the National Stock Exchange the S&P CNX Nifty fell 0.5% or 23.70 at 4,715.90.

Of the BSE traded shares, 1,810 shares declined, 860 shares gained and 55 shares remained unchanged. Among the 30-member Sensex stocks, 18 shares declined while 12 advanced.

Trading Statistics

Daily turnover on the BSE stood at 5,229 crore rupees as compared to 4,809.14 crore rupees on Monday. On the NSE, turnover was at

Reliance Industries was the most active stock on the BSE with the turnover of 278.70 crore rupees followed by Reliance Capital, Essar Oil, Reliance Petroleum and IFCI.

IFCI led the trading volume with a turnover of 2.14 crore shares followed by Ispat Industries, Aishwarya Telecom, Chambal Fertilisers and Reliance Natural Resources.

Government to decide fuel price hike on Wednesday

External Affairs Minister Pranab Mukherjee said cabinet will meet on Wednesday to decide on. The sharp rise in the crude oil price in the international market has dragged rupee lower, generated large deficit for state run oil companies and stoked fears in inflation.

With consensus on raising petrol, diesel and domestic LPG prices still eluding, the cabinet committee on political affairs will meet early Wednesday morning. Prime Minister Manmohan Singh on Monday indicated that government is not in a position to absorb losses from a sharp rise in international crude oil prices.

State controlled oil companies are facing a deficit of Rs 2,25,040 crore or $50 billion revenue deficits and prime minister has been seeking solution. Petroleum Minister Murli Deora has asked for petrol price increase of 10 rupees a liter and 5 rupees per liter in diesel and 50 rupees per cylinder raise in LPG prices. It is not what amount of this price increase will be passed on to consumers.

Satyam faces legal challenge from its former client

Satyam Computer Services fell 3.3% to 501.50 rupees after mobile payment company based in the UK Upaid Systems won an appeals court ruling in favor of larger case with potential damages to of $1 billion.

The upstart mobile payment technology developer had struggled with the payment in the late nineties for the development of technology to Satyam Computer Services subsidiary Satyam Enterprises. By 1999 the company has racked up nearly $2 million of unpaid bills and sought help of the software developer Satyam.

In 1996 Upaid Systems was started by Simon Joyce and Prafulla Gupta in UK to enable mobile phones payment for commercial transaction using personal identification number. The company sought the help of Satyam to develop the idea into a viable technology but fell behind in payment. After few months the unpaid bills ballooned to $2 million. In the first half of 1999 the companies reached a settlement and Satyam agreed to take 27% stake in the troubled technology company and was given a board position as a settlement.

By 2002 relationship between the two parties had deteriorated. Satyam and Upaid agreed to transfer the technology to Upaid and help the start-up company to file a patent application in the U.S. During the patent filing process Upaid discovered that Satyam did not own the technology as it claimed and some of its employees who worked on the project had not agreed to a transfer of technology. In all 36 Satyam employees worked on the technology project. Upaid alleges that at least two of them did not sign consent to transfer the technology to Satyam as claimed by the software company.