Auto stocks ride high as FM announces excise duty cuts

Auto stocks today rose by 4 per cent after Finance Minister P Chidambaram announced in the interim Budget that excise duty on small cars and bikes will be cut to 8 per cent from existing 12 per cent.

Shares of Hero MotoCorp surged 4 per cent, while TVS Motor Company gained 3.86 per cent on the BSE.

Escorts shares were up 3.86 per cent, while Mahindra & Mahindra rose by 2 per cent, Eicher Motors (1.9 per cent) and Maruti Suzuki (1.79 per cent).

The BSE auto index was trading 0.40 per cent higher at 12,015.66 during the afternoon trade.

Excise duty on small cars, motorcycles and SUVs was reduced. Excise duty on SUVs has been cut from 30 per cent to 24 per cent, in large and mid-segment cars, from 27-24 per cent to 24-20 per cent.

Excise duty on small cars, motorcycles and commercial vehicles cut from 12 to 8 per cent and appropriate cut to be done on chassis, trailers.

In the stock market, the benchmark Sensex was trading at 20,411.17, up 44.35 points at 1232 hrs.

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