Commodity Online
MUMBAI: The positive sentiment continued to prevail in the auto sector after the third stimulus announcements by the government on Tuesday as the sectoral index rose 2.51% to 2688.13 on BSE today.
Accompanied with the recent fiscal sops including excise duty cut and possibility of price cut by Rs.2 in diesel, the auto makers have become optimistic of fresh demand to come up in near future.
All the auto majors were trading in green in the final trading session on the BSE today. Tata Motors Ltd was among the largest gainers and stood at Rs.150 up by 7.26% while Ashok Leyland Ltd was up by 4.84% to Rs. 16.25. Maruti Suzuki India Ltd was trading up by 5.02% to Rs. 696.05
Bajaj Auto too witnessed an upsurge in stock prices by 3.24% to Rs. 526.80 while Hero Honda Motors Ltd was up by 2.82% at Rs.925.10.
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The government on Tuesday had announced a cut in excise duty to 8% for items attracting 10% duty and extended an across-the-board 4% reduction in excise duty provided in the first stimulus package, beyond this fiscal-end. The step came as an effort to boost demand and revive growth in economy as it reels under the impact of the global economic crisis.
Auto stocks had rose considerably on 24 February 2009 following the fiscal announcement. Tata Motors had witnessed 5.87% rise, while Ashok Leyland rose by 3.26%. Other auto majors, Maruti Suzuki India, Hero Honda Motors and Mahindra & Mahindra rose by between 0.09% to 7.9% on Tuesday.
The possible rise in demand in the automobile sector is expected to boost other allied sectors including steel and engineering. However, there needs some more steps to be taken on the financing availability front, as the price cut alone cannot boost the demand.
