Auto stocks extend rally, Hyundai Motor climbs nearly 3%

New Delhi: Auto stocks ended higher on Friday, with Hyundai Motor India climbing nearly 3 per cent, after GST rate cuts were announced on commonly used personal items and daily essential products.

Shares of Hyundai Motor India rallied 2.69 per cent, Eicher Motors climbed 2.43 per cent, Mahindra & Mahindra edged higher by 2.34 per cent, Ashok Leyland advanced 2.22 per cent on the BSE.

The stock of Maruti Suzuki ended 1.70 per cent higher, TVS Motor Company climbed 1.28 per cent, Sona BLW Precision Forgings (0.80 per cent), Bharat Forge (0.77 per cent), Tata Motors (0.63 per cent), Bajaj Auto (0.22 per cent) and Hero MotoCorp(0.21 per cent).

The BSE auto index jumped 1.30 per cent to 58,883.09.

"Sector-wise, auto stocks outperformed, rising over 1 per cent on optimism following reduced GST rates for vehicles," Ajit Mishra -- SVP, Research, Religare Broking Ltd, said.

The GST Council approved limiting slabs to 5 per cent and 18 per cent, effective from September 22, the first day of Navaratri.

Petrol, LPG and CNG vehicles of less than 1,200 cc and not more than 4,000 mm length and diesel vehicles of up to 1,500 cc and 4,000 mm length would move to the 18 per cent rate from the current 28 per cent.

Motorcycles up to 350 cc would be taxed at a lower GST of 18 per cent against 28 per cent at present.

The GST Council's decision to cut tax rates on various categories of automobiles is timely and will inject fresh momentum into the Indian automotive sector and significantly benefit first-time buyers and middle-income families, auto industry players said.