PROFIT BOOKING

Indian equities pared off accumulated gains to trade below neutral line in red in the late afternoon session after investors turned skeptics and started booking profit off the table. The momentum which the market carried on encouraging economic reports from the US which helped benchmark to trade in green faded away with selling pressure coming in. However, upside for the local markets was also limited by reports that RBI may revise the growth forecast for Asia's third largest economy downward in its third quarter monetary policy review meeting scheduled on January 24, 2012. Traders were seen piling up position in Capital Goods, Realty and Auto sector while selling was witnessed in Oil & Gas, TECk and Consumer Durables sector.
RIL, ONGC, Oil India, IOC, HPCL, BPCL and Gail India from Oil & Gas pack were trading weak in red pulling the markets lower. HDFC Bank, Kotak Bank, ICICI Bank, HDFC Bank and PNB from Banking counters were weak in red exerting pressure on the market. L&T, BHEL, Thermax, Suzlon Energy, Punj Lloyd and Crompton Greaves from Capital Goods space were trading in green pushing the markets higher. M&M and Maruti Suzuki from Auto space were seen trading in green giving the much needed support.
On the global front, all Asian markets were seen trading on an encouraging note while the European markets were trading in green on optimistic note.  In Europe, Standard & Poor's downgraded Hungary's sovereign credit rating to junk status with a negative outlook, citing unpredictable policy framework that is harming the economy's medium-term growth prospects. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 4,750 and 15,800 levels, respectively. The market breadth on the BSE was in favor of advances in the ratio of 1543:1042 while 122 scrips remained unchanged.
The BSE Sensex is currently trading at 15,771.40 down by 41.96 points or 0.27% after trading as high as 15,911.23 and as low as 15,734.79. There were 9 stocks advancing against 21 declines on the index.
The broader indices were trading on a positive note; the BSE Mid cap index surged 0.43% while Small cap jumped 1.21%.
On the BSE sectoral space, Capital Goods up 2.10%, Realty up 0.51%, Auto up 0.45%, Power up 0.13% and Metal up 0.01% were the only gainers while Oil & Gas down 0.61%, TECk down 0.53%, Consumer Durables down 0.48%, PSU down 0.47% and Bankex down 0.38% were the top loser in the space.
BHEL up 2.95%, L&T up 1.85%, Maruti Suzuki up 1.31%, Wipro up 0.89% and M&M up 0.71% were the major gainers on the Sensex, while NTPC down 3.39%, JP Associates down 2.37%, Bharti Airtel down 1.92%, Jindal Steel down 1.77% and ONGC down 1.45% were the major losers in the index.
Meanwhile, the Reserve Bank of India (RBI) governor, Duvvuri Subbarao has said that India's economic growth will probably fail to meet the central bank's GDP target of 7.6% for the fiscal year 2011-12 citing concerns over the domestic macro-economic situation. The governor also was of the belief that RBI may revise the growth forecast for Asia's third largest economy downward in its third quarter monetary policy review meeting scheduled on January 24, 2012.
Subbarao underscored that factors like stubborn inflation and depreciating rupee are serious cause of concerns for the economy's growth. On one hand, the headline (WPI) inflation in the month of November stayed above the uncomfortable 9% levels for the twelfth straight month, despite thirteen interest rate hikes by Indian central bank since March 2010. While on the other, Indian rupee has become the worst performing currency in Asia depreciating over 15% in 2011 against the dollar.

The RBI had revised the GDP growth forecast for 2011-12 to 7.6%, from 8% on October, 2011 while, the government cut its full-year growth target to between 7.25 - 7.75% earlier this month from 9% in February. Meanwhile, an influential brokerage firm CLSA has slashed India's GDP growth forecast to 6.7% for the current fiscal year ending March, 2012 from its earlier projection of 7.3%, owing to cyclical deceleration caused by high interest rates, policy inertia and the adverse impact of global headwinds.  

The S&P CNX Nifty is currently trading at 4,723.45, lower by 10.40 points or 0.22% after trading as high as 4,763.45 and as low as 4,713.00. There were 18 stocks advancing against 31 declines while 1 stock remained unchanged on the index.
The top gainers on the Nifty were BHEL up 3.06%, L&T up 2.36%, Sesa Goa up 2.10%, Grasim up 2.05% and Maruti up 1.64%.
NTPC down 3.00%, BPCL down 2.86%, IDFC down 2.12%, Bharti Airtel down 1.85% and JP Associates down 1.83% were the major losers on the index.
Asian markets traded largely on a positive note, Shanghai Composite climbed 0.85%, Hang Seng surged 1.37%, Straits Times added 0.42%, Seoul Composite soared 1.07% and Taiwan Weighted jumped 2.07%.
On the flipside, Jakarta Composite slipped 0.24%. Stock market in Japan remained closed for a national holiday.
The European markets were trading in green, France's CAC 40 added 0.90%, Germany's DAX jumped 0.42% and Britain's FTSE 100 gained 0.57%.