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Indian Shares Seen Opening Soft On Global Cues

Indian shares are seen opening lower on Wednesday, tracking weak Asian cues as worries about the pace of global economic growth sparked risk aversion in financial markets and pressured equities and commodities alike.

The only solace to be derived from the gloomy situation is that declining oil prices will help narrow India's current account deficit, a key factor that could prompt the Reserve Bank of India to cut policy rates in its upcoming meeting next week.

Indian shares ended a lackluster session on a flat note Tuesday, as caution prevailed ahead of market-moving data this week on industrial output and inflation. Infosys' results due on Friday and the uncertainty before the Reserve Bank of India's upcoming rate-setting meeting on April 17 also prompted investors to remain on the sidelines. The benchmark BSE Sensex finished the session up about 22 points or 0.13 percent at 17,244, while the 50-share Nifty index rose by 9 points or 0.18 percent to 5,244.

U.S. stocks tumbled overnight, adding to the steep losses posted in the previous session, as some traders continued to cash in on the recent strength in the markets following last Friday's disappointing jobs report. Mixed trade data from China, lingering eurozone debt worries and uncertainty about the upcoming earnings season also added to the downside pressure. The Dow fell 1.7 percent to its lowest closing level in over two months and the S&P 500 lost 1.7 percent to set a one-month closing low, while the tech-heavy Nasdaq shed 1.8 percent.

Aluminum producer Alcoa, Inc. said after the markets closed that its first quarter profit fell 69 percent from last year, as higher costs and expenses more than offset a small increase in revenue. However, the company's quarterly earnings surprised Wall Street analysts who were expecting the company to report a loss for the quarter.

Major European markets too closed with sharp losses on Tuesday, with the French CAC 40 losing 3.1 percent, while the German DAX index and the U.K.'s FTSE 100 index went down by 2.5 percent and 2.2 percent, respectively.

Oil prices sank to settle at a two-month low Tuesday, weighed down by demand concerns after data showed China's import growth fell below expectations. A stronger dollar too contributed to the decline. Brent crude futures fell $2.79 to settle at $119.88 a barrel, the weakest close since Feb. 17, while Nymex light crude fluctuated between 100.68 and 102.96 before closing down $1.44 or 1.4 percent at $101.02 a barrel.

Meanwhile, the U.S. Energy Information Administration in its monthly report cut its forecast for world oil demand growth for 2012 and 2013, while raising the forecast for non-OPEC oil output.

by RTTNews Staff Writer

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