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Sensex, Nifty Set To Open On Cautious Note

Indian shares may open on a cautious note on Wednesday as oil prices hit two-week highs, helped by planned cuts to Saudi exports and a reduced forecast for U.S crude output.

The downside, however, may remain limited amid a surging rupee and hopes for a rate cut by the RBI in its next policy meeting due in April.

India's retail inflation hit a four-month high of 2.57 percent in February, but that still remains lower than the RBI's expectations, raising hopes for further policy easing.

Slowing industrial output growth in January because of subdued performance by manufacturing sector may also add pressure on the RBI to cut interest rates. Industrial output grew 1.7 percent in January compared to 7.5 percent a year ago.

Benchmark indexes Sensex and the Nifty jumped over 1 percent on Tuesday to extend a bull run while the rupee gained 18 paise to close at more than two-month high of 69.71 against the dollar amid sustained foreign fund inflows and a weaker greenback in overseas markets.

Asian markets drifted lower this morning, with weak machinery orders data from Japan and Brexit-related uncertainty keeping investors nervous.

Sentiment was dented after British lawmakers resoundingly rejected Prime Minister Theresa May's European Union divorce deal for a second time, plunging the country into further uncertainty.

Overnight, U.S. stocks ended mixed as Boeing shares continued to fell on safety concerns following another deadly crash involving its most popular plane.

Inflation remained in check last month, helping spur expectations the Fed will continue to refrain from raising interest rates in the near future.

The Dow dropped 0.4 percent, while the tech-heavy Nasdaq Composite rose 0.4 percent and the S&P 500 added 0.3 percent.

European markets also ended Tuesday's session on a mixed note ahead of crucial Brexit vote, with British Attorney General Geoffrey Cox saying there is a legal risk that could affect Prime Minister May's revised Brexit deal.

The pan European Stoxx 600 edged down 0.1 percent. The German DAX slid 0.2 percent, while France's CAC 40 index inched up by 0.1 percent and the U.K.'s FTSE 100 rose 0.3 percent.

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