The market is likely to open with sharp losses tracking weak Asian stocks. Asian shares fell steeply on Friday after more signs emerged of growing instability among Spanish banks and political turmoil in Greece, with the latest sluggish economic data from the United States adding to the list of risks for investors.

Key benchmark indices eked out small gains in a volatile trading session on Thursday, 17 May 2012 as bargain hunting emerged after recent steep losses in share prices. The BSE Sensex advanced 40.39 points or 0.25% to settle at 16,070.48, its highest closing level since 15 May 2012.

Foreign institutional investors (FIIs) sold shares worth a net Rs 9.67 crore on Thursday, 17 May 2012 as per provisional figures. FIIs sold shares worth Rs 740.80 crore in three sessions from 15 to 17 May 2012.

Asian stock investors dumped shares on Friday as fresh concerns about the health of Spanish banks add to existing worries about capital flight from Greek lenders. Key benchmark indices in China, Hong Kong, Indonesia, Japan, Singapore, Taiwan and South Korea were down by 1.08% to 2.51%.

U.S. markets fell heavily Thursday, as worries about Europe and some disappointing data pressured stocks. A gauge of future U.S. economic activity fell in April for the first time in seven months, and the Philadelphia Federal Reserve's index of business conditions hit its lowest since September. In addition, the weekly claims for jobless benefits showed no improvement, a sign the pace of hiring remains lackluster.