Mumbai, Jul 3 (IANS): The Indian markets continue to be tepid awaiting the key trigger, the tabling of the Union Budget, which is likely to provide direction to the markets for the rest of the year.

Investors showed higher risk aversion as the optimism over the US-China trade truce seemed to be fading and oil prices surged on account of a more than expected decline in US crude inventories.

The 30-scrip Sensex, after a choppy day of trade settled at 39,839.25, higher by 22.77 while the Nifty50 finished Wednesday's trade at 11,916.75, up 6.45 points.

"Market will be volatile ahead the big event and profit booking is natural at this high level. However, underlying trend of the markets seems positive in expectation of revival in growth led by actions to boost infrastructure, investments, housing and bring relief to rural distress," said Vinod Nair, Head of Research, Geojit Financial Services.

"A spur in safe haven asset indicates investors' fear in the global market, FIIs are on risk off mode," Nair added.

European shares, Deepak Jasani of HDFC Securities said, largely ignored the overnight falls for Asia's big bourses to push higher, which fell in the morning trade on Wednesday amid trade worries as White House trade advisor Peter Navarro said a potential trade deal between the US and China is still some way off.