Markets witness profit booking but remain positive

Overall market breadth remains positive

The markets have come off the day's high in afternoon deals on profit booking at  higher levels. The BSE Sensex at 16,077, up 89 points and the Nifty at 4,879, up 31 points. Most of the positivity can be attributed to renewed buying interest in financials on rate-cut hopes and index heavy-weight Reliance Industries.

Earlier in the day, the BSE benchmark index touched the day's high at 16,138 and the day's low at 16,023.

Meanwhile, According to HSBC's services purchasing managers' index, compiled by Markit, India’s services sector grew at its fastest pace in three months during May, from 54.7 in May from 52.8 in the previous month and firms were more optimistic about the year ahead, the survey showed.

In Asia, Japan's Nikkei average sprang back from four straight sessions of losses as investors snapped up big name bargains ahead of emergency talks between the G7 industrialised nations to tackle a deepening euro zone crisis. The index has advanced 1% at 8,382. The Hang Seng index has advanced nearly 1% while the Shanghai Composite index is up marginally.

Back home, on the sectoral front, BSE Capital Goods, Bankex, Metal and Consumer Durables indices are leading the gains, having advanced 1-2% each.

Banking stocks gained on the back of rate cut hopes. IndusInd Bank, Axis Bank, SBI and Yes Bank Bank up 2-3% were leading the gains. In a separate development, State Bank of India has signed an agreement with brokerage firm Geojit BNP Paribas Financial Services to offer portfolio investment services (PIS) to Non-Resident Indians (NRIs).

Reliance Industries was up over 1% on short-covering after the stock breached Rs 700 levels.

BSE Realty and FMCG indices are the only ones in the negative terrain, down marginally.

On the Sensex, Hindalco Industries has gained 2.5% at Rs 118 and is the most prominent gainer. other gainers from the space are SBI, NTPC, Larsen & Toubro and Sterlite industries, up 2% each. The losers include Tata Motors, Bharti Airtel, ITC, Hindustan Unilever and ONGC, down nearly 1% each.

Among individual stocks, Insecticides India is trading higher by nearly 3% at Rs 408 on the National Stock Exchnage (NSE) on reports that the company is planning to raise Rs 100 crore. The company is looking at diluting a part of its promoter’s equity to raise around Rs 100 crore. The money would used for the capacity expansion and other growth plans. The net profit of the company fell 55% to Rs 2.76 crore in Q4 March 2012 on a y-o-y basis.

The overall market breadth is positive as 1,416 stocks have advanced against 974 declining ones, on the BSE.