Shrugging off a somewhat weak start, the Australian market edged higher on Wednesday with energy, financials and healthcare stocks finding some strong support. However, with not much buying happening at higher levels, the market drifted down a bit and has turned subdued once again. Cues from Wall Street are not significantly positive and the mood appears to be a bit cautious at present.

The benchmark Australian index S&P/ASX 200 index rose to 3,908 after an early fall and is currently trading at 3,892, up 2 points over its previous close. The All Ordinaries index is up 1.4 points at 3,864.

In the banking space, ANZ Bank is trading 1.7% up. Westpac Banking Corporation is up 2.7%. Commonwealth Bank of Australia and National Bank of Australia are trading higher by 1.1% and 1.2% respectively.

Among energy stocks Woodside Petroleum and Origin Energy are up 1% and 1.9% respectively. Capital goods stock Leighton Holdings is trading 1.7% up. Among materials, Newcrest Mining is down 2.5% from its previous close. Rio Tinto is down by a per cent and BHP Billiton is trading lower by 0.5%.

In the currency market, the Australian dollar is trading at 0.7382 to the U.S. dollar.

Market participants will be looking forward to the release of Retail Sales and Trade Balance reports today.

Among the other markets in the Asia-Pacific region, New Zealand is trading 0.63% up. The Korean market is trading marginally down.

Most of the markets in the Asia-Pacific region ended on a firm note on Tuesday, extending their recent gains. The Japanese and Korean markets remained closed.

The major European markets turned in a mixed performance, as stocks in London played catch up after the market was closed on Monday. While the U.K.'s FTSE 100 Index jumped 2.2 percent, the French CAC 40 Index fell 0.4 percent and the German DAX Index fell 1.0 percent.

On Tuesday, Wall Street saw some hectic profit taking after the splendid rally stocks had staged in the previous session. Still, the slide was not significantly sharp as the undertone remained fairly positive following some confident remarks from Federal Reserve Chairman Ben Bernanke.

The major averages staged a notable recovery attempt in late-day trading but still ended the session modestly lower. The Dow closed down 16.09 points and the Nasdaq ended 9.44 points down. The S&P 500 closed down 3.44 points.

Crude oil prices dropped off of a five-month high on the New York Mercantile Exchange on Tuesday as investors awaited the Energy Information Administration's weekly inventory data. Experts are predicting a 10th straight weekly build in stockpiles.

Light sweet crude oil for June delivery dropped to $53.84, down 63 cents on the session. Prices touched as low as $53.50 earlier in the session after earlier hitting as high as $54.83.

The Fed Chairman testified before the Joint Economic Committee of Congress, noting that recent data has suggested that the pace of contraction in the U.S. economy may be slowing.

He said recent data shows some signs that the beleaguered housing market may be bottoming and noted that the available indicators of business investment remain extremely weak.

Looking forward, Bernanke said economic activity is expected to bottom out then turn up later this year. Nonetheless, he noted that the rate of growth of real economic activity is likely to remain below its longer-run potential for a while.

According to a release from the Institute for Supply Management, ISM's index of activity in the service sector rose to 43.7 in April from 40.8 in March, with a reading below 50 indicating a contraction in the sector. Economists had been expecting a more modest increase to a reading of 42.2.

The release of Automatic Data Processing's (ADP) report on private sector employment in the month of April could shed some light on the strength of the Labor Department's monthly employment report.

On Thursday, the results of the government's stress tests of the nation's largest financial firms will be released and market participants across the globe will be looking forward to the release.

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