Auto Stocks Surge Amid GST Overhaul Boosting Small Cars Sales
Auto stocks saw significant gains as GST reforms were approved, reducing tax rates on small cars and entry-level bikes. Mahindra & Mahindra led the climb with an 8% increase. The reforms are expected to boost consumption sentiment, benefiting sectors like insurance, retail, and automobiles.
- Country:
- India
Auto stocks surged in Thursday morning trading as the GST Council approved extensive reforms to the tax regime, making small cars and entry-level motorcycles more affordable. Mahindra & Mahindra saw its stock climb nearly 8%, leading the auto sector rally.
Other companies also benefited, with Eicher Motors up 5.39%, TVS Motor Company climbing 4.2%, and Hero MotoCorp increasing by 3.56%. The BSE auto index itself rose by 1.7% to reach 58,712.10. This jump extended across the broader equity market, with the BSE Sensex rising by 888.96 points and the NSE Nifty increasing by 265.7 points.
Analysts at Motilal Oswal Financial Services say the simplification of GST rates is more of a 'growth reform' than just a 'tax reform', aiming to boost consumption sentiment. With revised GST rates effective from September 22, on the first day of Navaratri, sectors such as insurance, consumer durability, and real estate stand to gain.
(With inputs from agencies.)
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