With the European and U.S. markets ending sharply lower overnight, the Indian market may see some profit taking today following recent sharp gains. That said, renewed FII buying could limit the downside.
Asian stocks are now trading weak, dragging the MSCI Asia Pacific index down for a second consecutive session, as a rise in the yen to a fresh 15-year high threatened overseas earnings of Japanese exporters and renewed concerns about the eurozone banking system hurt sentiment.
The Federal Association of German Banks said that ten of the nation's biggest lenders may need to raise as much as EUR 105 billion, in order to meet new regulatory standards.
With worries about Europe's banks resurfacing, the euro is on the defensive, crude prices are declining in Asian trading and the Dow futures are down 15 points, while gold prices are trading near a record high on safe-haven buying.
On Wall Street, the major averages fell around a percent to open the Labor Day-shortened week on Tuesday, as investors locked in gains following last week's winning streak.
However, the Indian ADRs closed on a mixed note. Wipro tumbled 4.21%, HDFC Bank shed 3.6% and MTNL eased 1.46%, while Mahindra Satyam rallied 4.37%, Sterlite rose 1.22%, Infosys edged up 0.28% and ICICI Bank ended up 0.3%.
Crude oil prices declined on Tuesday amid a recovery in the dollar, but trimmed losses after reports of an explosion at a major refinery operated by Mexican oil giant Pemex sparked expectations of improved import demand for oil products from the nation. Light, sweet crude for October delivery settled down $0.51 at $74.09 a barrel on the New York Mercantile Exchange, after trading as low as $72.63 earlier in the session.
The Indian market ended Tuesday's choppy session modestly higher, shrugging off weak global cues. However, the 30-share BSE Sensex ended off the day's high at 18,645, up about 85 points or half a percent, while the broader Nifty rose by 27 points or 0.5% to 5,604. In the broader market, gaining shares outpaced declining ones by 1664 to 1280 on the BSE.
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