The market is likely to start on a subdued note tracking negative Asian equities. Data showing selling by foreign institutional investors (FIIs) in past six trading days in a row may weigh on investor sentiment. Also the rupee tumbling to a record low against the dollar on Tuesday sparked worries of worsening trade deficit and fiscal deficit because of all the subsidies on petroleum products.

Key benchmark indices snapped three-day winning streak on Tuesday, 22 May 2012 as macroeconomic worries and rupee's slide to a record low against the dollar hurt investor sentiment adversely. The BSE Sensex lost 156.85 points or 0.97% to settle at 16,026.41, its lowest closing level since 9 January 2012.

Foreign institutional investors (FIIs) sold shares worth a net Rs 283.34 crore on Tuesday, 22 May 2012, compared with outflow of Rs 79.59 on Monday, 21 May 2012, data released by Securities & Exchange Board of India showed.

Asian stocks declined on Wednesday ahead of a meeting of European leaders, with renewed fears Greece would leave the euro bloc dampening appetite for riskier assets. Key benchmark indices in Singapore, Japan, China, Taiwan, South Korea, Hong Kong and Indonesia were down by 0.22% to 1.47%.

Meanwhile, the Bank of Japan today kept its key interest rate and asset-purchase program unchanged. The central bank added a 1 trillion yen ($12 billion) program for loans denominated in US dollars and is expanding its venture capital-style domestic fund by 500 billion yen. BOJ kept the benchmark interest rate between zero and 0.1% while policy makers left the asset purchase fund at 30 trillion yen and a credit-loan program at 35 trillion yen.

US stocks closed mostly flat on Tuesday as investors preferred to stay on the sidelines amid political turmoil in euro zone. The Dow Jones Industrial Average dipped 1.67 points, or 0.01%, to 12,502.81. But the Standard & Poor's 500 index was up just 0.64 of a point, or 0.05%, to 1,316.63. The Nasdaq Composite index declined 8.13 points, or 0.29%, to 2,839.08. The G8 world leaders on Saturday, 19 May 2012, affirmed they want Greece to remain in the euro zone. At a summit of the Group of Eight major economies at the US, G8 leaders failed to reach an agreement on how to calm the escalating economic crisis in Europe, though the meeting's final statement did affirm that leaders wanted Greece to remain in the euro zone. Also in the joint statement, leaders said that they would take steps to boost their economies.

Greek voters return to the polls on 17 June 2012 after the splintered results of a May 6 parliamentary election left no party able to put together a government. Strong support for anti-austerity parties has stirred fears that Greece won't meet pledges it made in return for its second bailout, potentially leading to its exit from the shared-currency project.

The Organisation for Economic Co-operation & Development (OECD) on Tuesday forecast that global growth would fall to 3.4% this year from 3.6% in 2011, before accelerating to 4.2% in 2013. Growth across the Paris-based organisation's 34 members, considered the richest in the world, would drop this year to 1.6% from 1.8% in 2011 and then reach 2.2% in 2013, roughly in line with previous estimates.