Cigarette stocks recover after sharp fall on excise duty hike

Cigarette stocks, which witnessed intense selling pressure during the day after announcement of hike in excise duty on various tobacco products other than beedi in Budget 2016-2017, later pared the losses and ended with gains.
Shares of ITC, which tumbled 7.9 per cent in intra-day, later recovered the lost ground and ended with a gain of 1.65 per cent at Rs 295.80 on BSE.
Godfrey Phillips also climbed 5.38 per cent and VST Industries rose by 1.49 per cent.
Fag-end buying at lower levels pushed these stocks higher.
Golden Tobacco however, ended lower by 0.70 per cent.
Continuing the trend set by his predecessors, Finance Minister Arun Jaitley today came down heavily on smokers and tobacco consumers by raising excise duty on all tobacco products by up to 15 per cent.

"To discourage consumption of tobacco and tobacco products, I propose to increase the excise duties on various tobacco products other than beedi by about 10 to 15 per cent," Jaitley said in his Budget speech.