SSPI handshake failed with error code 0x8009030c while establishing a connection with integrated security; the connection has been closed. [CLIENT: 127.0.0.1]

Question

i'm using JDBC to connect to SQL Server 2005 locally using integrated security. it's getting failed with the following error code

Error: 17806, Severity: 20, State: 2.

Logon SSPI handshake failed with error code 0x8009030c while establishing a connection with integrated security; the connection has been closed. [CLIENT: 127.0.0.1]

Logon Error: 18452, Severity: 14, State: 1.

Logon Login failed for user ''. The user is not associated with a trusted SQL Server connection. [CLIENT: 127.0.0.1]

But i'm able to connect successfully using 127.0.0.1. the connection is failing only when i give localhost.

Connection URL:

jdbc:sqlserver://LOCALHOST:1433;DatabaseName=master;integratedSecurity=true