Auto index surges as excise duty unchanged

The shares of automobile companies have rallied for the second day in a row after the government kept the central excise duty unchanged.

The Bombay Stock Exchange (BSE) Auto index is the largest gainer among the sectoral indices, surging almost 3% in early trades compared to a 1% gain in the benchmark index Sensex.

“Overall, the Union Budget 2011-12 is positive for the automobile sector as the central excise duty has been kept unchanged. Further, special incentives have been announced for companies manufacturing hybrid vehicles in India. Moreover, broader measures like increased focus on rural and infrastructure spending would support long term growth of the sector,” Angle Broking said in its Post udget views.

Meanwhile, the auto companies will announce their montly sales numbers for the month of February today.

Among individual auto stocks, Bajaj Auto, Mahindra and Mahindra, Tata Motors, Ashok Leyland, Hero Honda Motors, Maruti Suzuki and TVS Motors are trading higher by 2-4% on the NSE.