INDIA STOCKS-India's stock benchmarks erase early gains as profit-taking offsets metals gains

By Bharath Rajeswaran

Dec 11 (Reuters) - India's equity benchmarks were flat on Thursday, as broad-based profit-taking persisted for the fourth session, offsetting a rise in metals following the Federal Reserve's 25-basis-point rate cut.

The Nifty 50 .NSEI rose 0.04% to 25,770.05 while the BSE Sensex .BSESN shed 0.01% to 84,381.84 as of 10:07 a.m. IST.

Both Nifty and Sensex rose about 0.2% each at the open, before erasing gains. Thirteen of the 16 major sectors declined.

The broader small-caps .NIFSMCP100 and mid-caps .NIFMDCP100 rose 0.1% and 0.3%.

Metals .NIFTYMET gained 0.8%, tracking firmer metal prices due to a weakening U.S. dollar after the Fed rate cut. A weaker U.S. dollar makes metals cheaper for holders of other currencies. MET/L

"The Fed rate cut signals that concerns over slowing growth and labour market softness now outweigh earlier fears of persistent inflation, which is a positive," said Rajesh Palviya, senior vice president of research at Axis Securities.

While Fed Chair Jerome Powell's balanced outlook eased market nerves about a hawkish message, the rate cut "alone cannot offset the structural headwinds for the Indian rupee from higher tariffs and U.S. yields," said Rajeev Sharan, head of criteria of model development and research at Brickwork Ratings.

The Nifty and Sensex have lost about 1.6% in the last three sessions on persistent foreign selling, which also dragged the rupee to a record low earlier in December.

Foreign portfolio investors have sold domestic equities worth $1.56 billion so far in December, nearly four times the $425 million outflows recorded in November.

"Persistent weakness in rupee and worries over delay in any meaningful progress in India-U.S. trade talks have prompted profit booking," said Ponmudi R, chief executive of Enrich Money.

Among individual stocks, IndiGo INGL.NS fell 3.3% after cutting its forecast for quarterly capacity and passenger unit revenue following recent flight cancellations.

India's top silver producer Hindustan Zinc HZNC.NS and its parent Vedanta VDAN.NS rose 3.2% and 1.3% after silver prices surged to a record high.