Six auto stocks rose by 0.83% to 2.59% at 13:31 IST on BSE after finance minister proposed to reduce the excise duty on the automobile industry for the period up to 30 June 2014.
Escorts (up 2.59%), TVS Motor Company (up 2.43%), Hero MotoCorp (up 1.74%), M&M (up 1.32%), Eicher Motors (up 1.12%) and Maruti Suzuki India (up 0.83%), edged higher.
Ashok Leyland (down 2.24%), Tata Motors (down 0.63%) and Bajaj Auto (down 0.09%), edged lower.
The S&P BSE Auto index was up 0.23% at 11,994.92. Meanwhile, the S&P BSE Sensex was up 0.23% at 20,413.64.
The S&P BSE Auto index had outperformed the market over the past one month till 14 February 2014, falling 0.10% compared with the Sensex's 3.17% fall. The index had, however, underperformed the market in past one quarter, falling 0.92% as against Sensex's 0.16% decline.
To give relief to the automobile industry which is registering unprecedented negative growth, finance minister P. Chidambaram, in the interim budget announced today, proposed to reduce the excise duty for the period up to 30 June 2014.
For small cars, motorcycles, scooters and commercial vehicles the excise duty is proposed to reduce from 12% to 8%.
For SUVs, the excise duty is proposed to reduce from 30% to 24%.
For large and mid-segment cars, the excise duty is proposed to reduce from 27/24% to 24/20%.
Consequently, the finance minister proposed to make appropriate reductions in the excise duty on chassis and trailers.
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