Sensex, Nifty erase gains on slowdown worries

India's benchmark BSE Sensex reversed early gains and closed slightly lower on Thursday as sluggish economic growth kept investors cautious and the government's assurance to the ailing auto sector failed to bring much cheer.

The Sensex closed down 0.22% at 36,644.42, while the broader NSE Nifty ended 0.03% higher at 10,847.90.

Road and transport minister Nitin Gadkari said the government would cut taxes on hybrid cars and not ban petrol and diesel vehicles at a time when the industry is fretting about plans to switch to electric vehicles.

The news helped the Nifty auto index close about 2.3% higher. Tata Motors was the top gainer with a jump of 7.81%.

Financial and banking stocks were among the top losers. Shadow bank Housing Development Finance Corp was the top loser on the NSE index with a drop of 2.66%.