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Selling intensified during the final hours of the day and as a consequence, indices in the Indian stock markets ended the session deep in the red. While BSE-Sensex lost in the region of more than 280 points (down 1.5%), decline on the NSE-Nifty came in at around 100 points. BSE Mid cap and BSE Small cap indices weren't spared either as they both lost more than 3% today. More than five stocks declined for every one that closed the day in the positive.

While most Asian indices closed mixed today, Europe is trading mostly in the red currently. The rupee was trading at Rs 49.3 to the dollar at the time of writing.

After a solid start to 2012, the investors seem to be getting a feeling of too much, too soon. Besides, a multi-month high achieved in the previous session has perhaps given investors the excuse they needed to sell and take some profits off the table. But given the liquidity that is sloshing around the world right now, a major pull back does not seem to be on the cards. Besides, there does not seem to be too many reasons floating around to not participate in the long term India growth story. Thus, any pullback should be used to load up on good quality stocks at attractive valuations.

State Bank Of India (SBI), the PSU banking major was the biggest loser on the bourses today, down more than 8%. The decline had largely to do with the declining investor confidence in the company post the announcement of its support to the beleaguered Kingfisher Airlines. As per reports, the bank has thrown a lifeline to Kingfisher worth Rs 15 bn. Post this, the total exposure of the bank to Kingfisher has now gone up to Rs 31 bn. Out of the new relief package, first tranche of Rs 7 bn will come as short term working capital and another Rs 5 bn will be paid as bank guarantees. Another Rs 3.5 bn will come in some form or the other. Investors are understandably nervous over this move as it sees a government hand in this and are worried that this amounts to throwing good money after bad. ICICI Bank also closed lower to the tune of 3% today.

Although we are still in the fiscal year FY12, economic projections for the year FY13 are out and they do not look quite that rosy. The Prime Minister's Economic Advisory Council has projected India's FY13 GDP growth to come in the region of 7.5% to 8%. However, there is a big caveat to this in the form of the global environment turning favourable. If it doesn't then may be growth will have to be revised downwards. As usual, the fiscal deficit remains a big area of concern as it drains funds available for development expenditure. Besides, the council is also of the opinion that the Government should express itself most powerfully in the infrastructure sector in FY13.

Source: India Markets Wednesday Wrap-Up: Profit Booking Takes A Toll