Energy, auto stocks drag Sensex down 111 points

Benchmark indices the Nifty and the Sensex shed in excess of half a percent on Thursday despite inflation numbers surprising the street.

The Nifty closed at 5,897 down 36 points while the Sensex closed at 19,497, down 111 points.

However there was significant selling in midcap and small cap counters. The CNX Midcap index lost 1.27 per cent to close at 7,895 and the CNX Small Cap index shed 1.66 per cent to close at 3,424.

Energy, Auto, Media and PSU bank scrips were the largest losers on Thursday.

“No doubt, a softening of the headline WPI inflation, along with the softer core inflation were positives. However, going beyond the WPI numbers, the worry continues to be the ever-rising divergence between the WPI and the CPI. This is making the task of the RBI even more difficult in reading through the inflation dynamics. The worry on the food side inflation continues. The comfort from the manufacturing side (core inflation) might turn out to be short-lived as the INR has once again started to depreciate and the CRB commodity price index has probably found a floor. However, we continue to expect the RBI to deliver its second 25 bps easing on the Repo rate in this cycle. Going forward though, the wedge between CPI-WPI inflation and the sticky current account deficit is likely to restrain RBI’s hands for deeper and faster cuts in the benchmark policy interest rates,” said Indranil Pan, Chief Economist, Kotak Mahindra Bank.

Volatility was flat with the volatility index India Vix closing at 15.09, down 0.33 per cent.

GAIL, HUL, Tata Steel, HDFC Bank and Asian Paints were the top five Nifty gainers while Siemens, Bharti Airtel, BPCL, Powergrid and Maruti were the top losers.

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