New Delhi: Auto stocks rallied sharply in the morning trade on the bourses after the the Rajya Sabha passed the historic GST bill, which is expected to lower tax administrative cost for the sector.
According to experts, the implementation of GST would reduce the on-road prices for price sensitive, entry-level segment, and improve the affordability of the vehicles for the end-consumers. Shares of Hero MotoCorp rose by 2.09 per cent, while Tata Motors jumped 3.99 per cent and Maruti Suzuki saw its shares soar nearly 2 per cent in morning trade on BSE.
Among others, Mahindra & Mahindra jumped 1.63 per cent and Bajaj Auto shares rose by 2.09 per cent in morning trade on the BSE. The BSE Auto Index was trading at 21,082.72, higher by 354.57 points, or 1.71 per cent, in morning trade on August 4.
According to automakers, the uptick in auto stocks is largely on anticipation that the implementation of GST would benefit auto manufacturers. Meanwhile, the broader market was trading flat with the 30-share benchmark index Sensex quoted at 27,768.12, a rise of 70.61 points or 0.25 per cent at 1108 hours.
The long-pending indirect tax reform Goods and Services Tax (GST) Constitutional Amendment Bill was passed by the Rajya Sabha yesterday.
