The Indian market may open flat amid mixed global cues. While the results of the general elections, which will be announced on Saturday, could add to the uncertainty, strong buying by foreign funds is expected to keep underlying sentiment firm. The market may see hectic volatility on account of alternate bouts of buying and profit taking.

Polling for the fifth and final phase of the country's general elections began on Wednesday, with polling underway in 86 constituencies, with 1,432 candidates in the fray. The counting of votes will take place on May 16.

On Tuesday, foreign funds bought shares worth Rs.452 crore on a net basis, taking their cumulative purchases for May thus far to Rs. 3,276 crore, provisional data showed. Domestic funds also bought shares worth Rs.177 crore on Tuesday.

Meanwhile, overseas Indians reposed their faith in the country's banking system. Latest figures released by the central bank showed that net inflows through various NRI deposits surged to $3.99 billion at the end of FY09 from a mere $179 million at the close of the previous year. These include inflows through foreign currency non-resident-banks (FCNR-B ), nonresident (external) rupee accounts (NRE-RA) and non-resident ordinary (NRO) deposit schemes.

The U.S. markets saw further profit taking on Tuesday, as traders expressed some uncertainty about the outlook for the markets. Investors worried about General Motors being on the verge of filing for bankruptcy after several company executives revealed that they sold their GM stock and liquidated their remaining direct holdings in the company.

After spending a major part of the session in negative territory, the major averages eventually ended the session mixed, with the Dow posting a moderate gain. While the Dow Jones Industrial Average closed up 0.6%, the Nasdaq Composite fell 0.88% and the S&P 500 index closed down 0.1%.

In economic news, the U.S. trade deficit for March came in wider than in the previous month, with the value of exports falling by more than the value of imports. While the report showed that the trade deficit widened to $27.6 billion in March from a revised $26.1 billion in February, economists had expected the deficit to widen to $29.0 billion.

Economic data is likely to be in focus on Wednesday, with the Commerce Department scheduled to release its report on retail sales in the month of April. Economists expect sales to come in unchanged after falling by 1.2 percent in March. Traders are also likely to keep an eye on monthly reports on import and export prices and business inventories as well as the weekly crude oil inventories report.

Meanwhile, the Indian ADRs closed mostly higher, with the exception of MTNL and HDFC Bank. Wipro surged up 6.05%, ICICI Bank advanced 3.88%, Reddy's Laboratories gained 2.91%, Infosys added 2.58%, Sterlite rose 1.66% and Satyam moved up 1.08%, but MTNL slipped 0.69% and HDFC Bank edged down 0.27%

Crude oil futures settled higher at $58.85 a barrel, up 0.6% in New York trading on Tuesday after the U.S. dollar fell to a four-month low against a basket of world currencies. Optimism that an economic recovery may improve fuel demand also drove crude prices higher.

The rupee closed Tuesday's session higher at Rs.49.30/31 against the dollar, up 20 paise, boosted by a weak dollar and improved sentiment in the stock market.

The Indian market bounced back sharply on Tuesday, shrugging off negative global cues and a weak IIP report for March. Extensive short covering and positive sentiment on account of net buying by foreign funds in the past few sessions helped the market recovery. The BSE Sensex cut is early loss and finished near the day's high at 12,158, up 475 points or 4.07% over the previous close. Likewise, after remaining range bound for the first two hours till noon, the S&P CNX Nifty rose sharply by 126 points or 3.56% to 3,681. On the BSE, the market breadth was positive, with advancers outnumbering decliners by 1410 to 1101.

Tata Steel could be in the spotlight amid reports that it will raise Rs.3000 crore through non-convertible debentures (NCDs) to prepay the debt of its UK subsidiary, Tata Steel UK.

Kotak Mahindra Bank may see some activity after its standalone net profit rose 48% year-over-year for the March quarter.

Maruti Suzuki may move on reports that it is aggressively looking at improving its presence in the diesel segment, a category which is dominated by Tata Motors.

Bharti Airtel may see some activity after the department of telecom appointed an independent auditor to inspect Bharti Airtel's books to examine allegations of irregular revenue reporting by Bharti.

For comments and feedback: contact editorial@rttnews.com