RTTNews - Bargain hunting after a sharp loss in the previous session may help the Indian market open higher on Wednesday. Net FII buying for the past few sessions and an intra-day recovery in the Asian markets this morning may also lead to stock specific buying. That said, profit taking due to pre-budget jitters may lead to continued volatility. Metal stocks are likely to remain subdued as LME prices decline. IT stocks may outperform in line with global peers.

Despite a slightly positive start, Wall Street ended lower Tuesday as traders digested consumer confidence figures that fell short of expectations. A report from the Conference Board said its consumer confidence index fell to 49.3 in June from a revised 54.8 in May, surprising economists, who had expected the index to edge up to 55.3 from the 54.9 originally reported for the previous month.

Separately, while the S&P Case-Shiller Home Price Index, a closely watched measure of home prices, showed a 0.6 percent decline from March to April, the Institute for Supply Management - Chicago said its index of activity in the manufacturing sector jumped to 39.9 in June from 34.9 in May, although a reading below 50 indicates a continued contraction. The major averages finished firmly in negative territory, offsetting Monday's gains. The Dow Jones Industrial Average ended down 0.97%, the Nasdaq Composite dipped 0.49% and the S&P 500 index fell 0.85%.

The Indian ADRs closed mostly lower. Sterlite tumbled 5.54%, Satyam fell 4.6%, ICICI Bank declined 4.22%, HDFC Bank moved down 2.13%, Infosys ended down 1.24%, MTNL slipped 0.91% and Wipro edged down 0.42%, but Reddy's Laboratories bucked the declining trend with a 1.13% rise.

The overnight fall on Wall Street had set off a negative start in most of the markets in the Asia-Pacific region this morning. However, with investors looking for some bargain hunting at lower levels, a few markets have come off their lows subsequently.

Crude oil futures slipped from eight-month peaks to below $70 a barrel in New York trading on Tuesday, as the dollar rose against the euro and the yen. However, in Asian trading on Wednesday, crude oil was last trading firm at $ 70.56 a barrel, up nearly 1% after industry inventory data from American Petroleum Institute showed crude stocks fell much more than expected last week.

Meanwhile, the rupee ended stronger at Rs.47.80 against the dollar on Tuesday on hopes of more portfolio capital inflows after the announcement of the budget, but a downswing in stocks and demand for dollars from importers capped any major rise.

On Tuesday, profit taking ahead of the announcement of Union Budget early next week, rising oil prices and smaller-than-expected growth in May infrastructure output dragged the Indian market sharply down. Stocks across the sectors ended sharply lower, as traders refrained from taking fresh long positions despite favorable global cues. The BSE Sensex finished at 14,494, down 192 points or nearly 2% from its previous close, while the S&P CNX Nifty fell 100 points or 2.27% to 4,291, the broad-based BSE 500 index declined 2..46%, the small-cap index shed 2.51% and the mid-cap index moved down 2.94%. On the BSE, the market breadth was extremely negative, as decliners outnumbered advancers by 1846 to 757.

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