Sensex, Nifty swing between gains and losses; auto, energy stocks lag

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India VIX up 1 percent; broader markets firm

Sensex and Nifty 50 swung between gains and losses on May 16 in a narrow trading range. Concerns over FII selling and uncertainty over election results weighed, and indices failed to find a reason to hold gains.

At 2:49 pm, the Sensex was up 202 points or 0.3 percent at 73,189 and the Nifty 50 was up 64 points or 0.3 percent at 22,264. About 1,703 shares advanced, 1,672 shares declined, and 89 shares remained unchanged.

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Automobile and energy stocks were the major laggards in this volatile trading session; whereas IT stocks shone in today’s trade.

Volatility index India VIX rose over 1 percent and stayed above 20 after having fallen in the past two sessions. Volatility concerns are unlikely to dissipate entirely until the general election results are declared, said analysts. “During previous elections, the India VIX had surged to 29. Based on historical data, there is still potential for further upside in the India VIX, which remains a concern for investors,” said Ajit Mishra, SVP of Research at Religare Broking.

IT stocks stayed firm in a weak market after a softer-than-expected US April inflation print fanned hopes of a rate cut by the Federal Reserve in September. Lower interest rates bode well for growth-focused information technology stocks as it lowers the cost of borrowing and also make them more attractive than safe-haven US bonds.

The broader market managed to hold gains with both BSE Midcap and BSE Smallcap index gaining 0.5 percent.

(To be updated)