Indian stocks reversed from early gains to close down Wednesday after speculation mounted that the central bank will take further action to cut off money supply growth. Dealers said that market players are betting that the central bank may raise the cash reserve ratio as high as 8.75% after it was bumped up to 8.25% yesterday.

"The Reserve Bank is trying to balance both growth and inflation," said N.S. Venkatesh, chief executive officer of IDBI Gilts Ltd.

The Bombay Stock Exchange's benchmark 30-stock Sensex Index declined by 91 points, or 0.5%, to 17,287. Indian equity markets will be closed Thursday due to a public holiday.

Indian information technology (IT) company Patni Computer Systems ( PTI) said first-quarter net profits fell 35% to 724.6 million rupees, vs. 1.2 billion from a year earlier, but revenue jumped 13.1% to 7.06 billion rupees ($176.4 million), vs. Wall Street estimates of $175.6 million. The company forecasted second-quarter net profit to come in between the range of 880 million rupees to 920 million rupees ($22 million to $23 million) on revenue of 7.2 billion rupees to 7.24 billion ($180 million to $181 million), vs. estimates of $181.7 million. Patni said that although results are in line with guidance, it remains cautions on the global economy in 2008. American depositary shares of PTI rose 2.3% to $13.42.

Elsewhere in the Indian IT complex, Tibco Software ( TIBX) announced it has expanded its existing eight-year relationship with Indian global IT provider Infosys Technologies ( INFY). Shares of INFY slipped 0.5% to $43.69.

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