Key benchmark indices trimmed intraday losses amid late volatility. The barometer index, BSE Sensex, regained the psychological 16,000 mark, having alternately moved above and below that level in intraday trade. The market breadth was weak. All the 13 sectoral indices on BSE were in the red. The Sensex was provisionally down 295.77 points or 1.81%, up about 60 points from the day's low and off close to 100 points from the day's high.

Index heavyweight Reliance Industries (RIL) declined in choppy trade. Auto major Tata Motors tumbled over 7% on euro-zone debt worries and after the company reported flat global sales in April 2012. Hindalco Industries hit 52- week low as the company gave a pessimistic future outlook at the time of announcing its Q4 March 2012 results on 8 May 2012. Steel major Tata Steel declined on euro-zone debt worries.

World stocks fell on Wednesday after Greece failed to form a government, setting the stage for a June election that could raise the risk of Athens abandoning the euro and deepening the euro zone's debt crisis. Separately, data widely reported in the financial press Tuesday showed Greek depositors withdrew €700 million ($890 million) from the nation's banks on Monday, which could make Greek financial institutions more dependent on funding from the European Central Bank.

Indian stocks slumped in early trade to hit their lowest level in more than 17 weeks on weak Asian stocks. The Sensex trimmed losses after hitting its lowest level in almost 18 weeks in morning trade. Weakness continued in mid-morning trade. The barometer index, BSE Sensex, regained the psychological 16,000 level after falling below that mark for the first time in almost 18 weeks in early afternoon trade. A bout of volatility was witnessed as key benchmark indices slumped to fresh intraday lows in afternoon trade. Volatility continued as key benchmark indices weakened once again after trimming losses in mid-afternoon trade. The market trimmed losses in late trade.

As per provisional figures, the BSE Sensex was down 295.77 points or 1.81% to 16,032.48. The index slumped 353.65 points at the day's low of 15,974.60 in afternoon trade, its lowest level since 12 January 2012. The index fell 195.57 points at the day's high of 16,132.68 in early trade.

The S&P CNX Nifty was down 83.40 points or 1.69% to 4,859.40, as per provisional figures. The index hit a low of 4837.05 in intraday trade, its lowest level since 16 January 2012. The Nifty hit a high of 4,882.25 in intraday trade.

BSE clocked turnover of Rs 1834 crore, higher than Rs 1816.58 crore on Tuesday, 15 May 2012.

The market breadth, indicating the overall health of the market, was weak. On BSE, 1,721 shares fell and 996 shares rose. A total of 114 shares were unchanged.

Among the 30-share Sensex pack, 27 declined while only three of them managed gains.

State-run gas transmission and distribution major GAIL (India) fell 1.43% to Rs 310.10. The stock hit a 52 week low of Rs 308.35 today.

Power equipment maker Bhel tumbled 3.74% to Rs 208.75. The stock hit a 52-week low of Rs 206.10 today.

Steel major Tata Steel lost 4.24% on euro-zone debt worries. European operations constitute almost 65% of the firm's sales.

Aluminium and copper major Hindalco Industries fell 2.98% to Rs 110.80. The stock hit a 52-week low of Rs 109.60 today. Hindalco gave a pessimistic future outlook at the time of announcing its Q4 March 2012 results on 8 May 2012. Hindalco said volatile commodity prices and spiraling energy costs post significant challenge for the company. Hindalco said it is confident of mitigating the cost pressure to a larger extent on the strength of integration in its operations and operational efficiencies.

Among other metal shares, Bhushan Steel, JSW Steel, Sail, Jindal Steel & Power and Hindustan Zinc shed by between 1.21% to 5.7%.

Auto major Tata Motors tumbled 7.65% on euro-zone debt worries. Tata Motors derives almost two-third of its revenue from its British unit Jaguar Land Rover. Tata Motors Group global sales, including Jaguar Land Rover, remained flat at 87,377 units in April 2012, Tata Motors said after trading hours on Tuesday, 15 May 2012. Global sales of all commercial vehicles -- Tata, Tata Daewoo and the Tata Hispano Carrocera range -- were 38,008 units in April 2012, lower by 8%.

Global sales of all passenger vehicles were at 49,369 units in April 2012, higher by 7%. Global sales of Tata passenger vehicles and the distribution offtake in India of Fiat cars were at 24,226 units in April 2012, lower by 9%. Global sales of Jaguar Land Rover in April 2012 were at 25,143 vehicles, higher by 29% over April 2011. Jaguar sales for the month were 3,603 units, higher by 17%, while Land Rover sales were 21,540 units, higher by 32%.

India's largest car maker by sales Maruti Suzuki India declined 1.63%. India's largest tractor and sports utility vehicles maker Mahindra & Mahindra (M&M) was flat at Rs 657.50, with the stock recovering from the day's low of Rs 636.

Two wheeler makers were mixed. Bajaj Auto rose 0.99%. India's largest motorcycle maker by sales Hero MotoCorp shed 0.15%. Unlisted Honda Motorcycle & Scooter India on Tuesday, 15 May 2012, launched 110cc Dream Yuga motorcycle at Rs 44,642 in New Delhi. The company expects to sell 3 lakh units of Dream Yuga motorcycle in the financial year through March 2013. Honda Motorcycle & Scooter India is a subsidiary of Japan's Honda Motor.

Index heavyweight Reliance Industries (RIL) declined 0.88% to Rs 675.20. The stock was volatile. The scrip hit a low of Rs 673.55 and high of Rs 682.75. The company said during market hours on Tuesday that as of 11 May 2012, the company bought back 1.23 crore shares for a total consideration of Rs 904.92 crore.

Moody's Investors Service on Monday, 14 May 2012, said that the cut by RIL in its proven gas reserves estimate is credit negative for the company as it confirms the technical difficulties it faces in the exploration and production business from declining output and lower cash flows. RIL had last week revised downward its assessment of its proven natural gas reserves by 6.7% and its proven developed reserves by 36.2%. The revisions follow nearly two years of declining production at its largest gas field, KG-D6, a deep-sea gas field in the Krishna-Godavari (KG) basin on the east coast of India.

Glenmark Pharmaceuticals fell 5.3%. Glenmark Generics Inc, USA, the United States subsidiary of Glenmark Generic, announced today that the United States Food and Drug Administration (USFDA) has granted tentative approval for zolmitriptan orally disintegrating tablets, its generic version of AstraZeneca's Zomig-ZMT tablets. The tentative approval is for the 2.5 mg and 5 mg orally disintegrating tablets of zolmitriptan and constitutes one of the first tentative approvals granted by the FDA for a generic version of the drug, Glenmark said. Glenmark was granted tentative approval for its immediate release version of Zolmitriptan tablets in September 2011.

According to IMS Health, for the 12 month period ending March 2012, zolmitriptan immediate release tablets and orally disintegrating tablets achieved sales of $131 million and $31 million, respectively.

Finance Minister Pranab Mukherjee today, 16 May 2012, said the government will issue some austerity measures to aid the fiscal consolidation process.

The sharp fall in the rupee to a record low on Wednesday is partly because of global factors, H.R. Khan, a deputy governor at the Reserve Bank of India, said. "The RBI is aware of the situation. We have taken steps and will take further steps if necessary," he said at the sidelines of a summit of South Asian Association for Regional Cooperation in Nepal. The rupee today, 16 May 2012, hit a record low against the dollar.

Monsoon rains are likely to hit the southern coast on time on 1 June 2012, the weather department said in a statement on Tuesday. The four-month long rainy season starts over the Kerala coast and covers the rest of India and neighbouring countries by mid-July. Last month, India's weather office forecast normal rains for the third straight year. It had said the country was likely to avoid a drought in 2012 as monsoon rains were likely to be average. The rains, vital for farm output and economic growth, irrigate about 60% of India's farmland. Farming accounts for about 15 percent of the nearly $2 trillion economy.

Moody's Investors Service on Monday, 14 May 2012, downgraded to Baa3 from Baa2 the foreign currency insurance financial strength rating of the Life Insurance Corporation of India (LIC) -- India's biggest domestic institutional investor. The rating outlook is now stable. This revision takes place in the context of an ongoing global review affecting financial institutions whose ratings are higher than the rating of the government where they are domiciled, Moody's said. This rating action concludes the review for possible downgrade initiated on 30 April 2012, it said.

The downgrade of LIC's rating reflects Moody's assessment that its creditworthiness is highly correlated with that of the Indian government's credit strength, considering the extent to which its business depends on the domestic economy, the limited degree of cross-border diversification within its operation, its significant level of balance-sheet exposure to domestic sovereign debt relative to its capitalization and the absence of strong foreign ownership. LIC is 100% owned by the Indian government. LIC generates almost all its premium income in India, reflecting its concentration in one market, its high reliance on the domestic economy, and its exposure to an evolving operating environment, Moody's said.

Moody's review concludes that there is little, if any, reason to believe that LIC would be insulated from any government debt crisis, if it were to occur. LIC has meaningful and rapidly increasing direct or indirect exposures to the government through its holdings of government securities and its equity investments in government-related entities, including banks and corporations. Consequently, Moody's views the lower rating -- which is now positioned at the rating of the Indian government -- as more appropriate to capture the credit profile of LIC. The government guarantees all of LIC's policy liabilities, including associated declared bonuses, as prescribed in the LIC Act. Thus, Moody's views that LIC's credit strength is very much closely linked to the Indian's sovereign -- which justifies the insurer's current rating, Moody's said.

The RBI's monetary policy "has to act" even if inflation is driven by food prices, D Subbarao, the central bank governor, said on Wednesday, 16 May 2012. Inflation accelerated in April as prices of most commodities rose. The Wholesale Price Index (WPI) rose a faster-than-expected 7.23% in April from a year earlier, mainly driven by higher food prices and manufactured items, data released by the government on Monday, 14 May 2012, showed. However, there was a slowdown in price rises in the manufacturing sector -- a proxy for measuring price pressures excluding volatile food and fuel prices.

The Reserve Bank of India next reviews monetary policy on 18 June 2012. The central bank will have May inflation and April industrial output data to study before then.

Reserve Bank of India (RBI) deputy governor Subir Gokarn late last week said that inflation remains the RBI's main focus, but it has to be sensitive to various other risks and pressures facing the economy. His comments come in the backdrop of a surprise decline in industrial production in March 2012. The data was announced during trading hours on Friday, 11 May 2012. Mr. Gokarn also said that interest rates are likely to be headed downwards, but the pace and magnitude of the fall would depend on trends in growth and inflation.

Investors are closely watching India Inc's Q4 March 2012 and year ending March 2012 (FY 2012) earnings. Focus is on the guidance provided by the management for the year ending March 2013 (FY 2013) to gauge the earnings outlook.

Bajaj Auto announces FY 2012 results tomorrow, 17 May 2012. State Bank of India, Tata Steel and Coal India unveil FY 2012 results on Friday, 18 May 2012. Tata Power Company announces FY 2012 results on 22 May 2012. Bharat Heavy Electricals (Bhel) unveils Q4 results on 23 May 2012. ITC and BPCL unveil FY 2012 results on 25 May 2012. Sun Pharmaceuticals Industries announces Q4 results on 29 May 2012. Tata Motors, ONGC, Steel Authority of India and Power Grid Corporation of India announce FY 2012 results on 29 May 2012. GAIL (India) announces Q4 results on 30 May 2012. Mahindra & Mahindra (M&M) unveils FY 2012 results on 30 May 2012.

European stocks edged lower in choppy trade on Wednesday after efforts to form a new government in Greece collapsed, fuelling fears that a second election in June could precipitate Athens' exit from the euro zone and deepen the bloc's debt crisis. Key benchmark indices in UK, Germany and France were down by 0.24% to 1.09%.

Greek political leaders meet on Wednesday to establish a caretaker government that will lead the country into its second election in just over a month.

Greece headed into a month of political uncertainty after power-sharing talks collapsed, triggering new elections that could determine whether the country retains its tenuous position in Europe's common currency. Separately, data widely reported in the financial press Tuesday showed Greek depositors withdrew €700 million ($890 million) from the nation's banks on Monday, which could make Greek financial institutions more dependent on funding from the European Central Bank.

Asian shares fell on Wednesday after Greece failed to form a government, setting the stage for a June election that could raise the risk of Athens abandoning the euro and deepening the euro zone's debt crisis. Key benchmark indices in China, Hong Kong, Japan, Indonesia, Singapore, Taiwan and South Korea were down by 1.12% to 3.19%.

Trading in US index futures indicated that that the Dow could fall 19 points at the opening bell on Wednesday, 16 May 2012. US stocks fell for the third straight day on Tuesday due to uncertainty stemming from the political stalemate in Greece.