Sensex takes 17k on marginal dip in inflation

A marginal drop in headline inflation pushed stocks up on the Dalal Street as Investors hoped that the Reserve Bank might pause on the rate hike cycle. The Sensex rose over 100 points, regaining the key 17,000 levels. The Nifty advanced above the critical 5,100 mark.

September inflation fell to 9.72 per cent from 9.78 per cent in August. Despite the fall, inflation continues to be above RBI's comfort levels and analysts said a pause was unlikely. Sajjid Chinoy of JP Morgan said, "We cannot rule out a pause...but we think an upward move is warranted."

Rate sensitive stocks were mixed. Banking and auto stocks were mostly higher though realty stocks continued to trade with big losses. ICICI Bank was up 1 per cent while SBI was trading with 0.5 per cent gains. M&M and Hero MotoCorp were in the green.

On the Sensex, 20 of the 30 stocks were trading higher. The market breadth was even, with 50 per cent stocks advancing on the BSE 500 index.

Among other groups of stocks, IT stocks were trading with nearly 1.5 per cent gains while metals were down over 1 per cent.