Sensex ends higher; auto stocks gain on budget tax sops

By Indulal PM

MUMBAI (Reuters) - The Sensex rose on Monday, with auto stocks leading the gains after the finance minister proposed excise duty cuts to boost sales hurt by a slowing economy.

The gains were modest as the interim budget by P. Chidambaram largely stuck to expected lines, delivering on its fiscal deficit commitments by containing expenditure. It lacked any major policy announcements and limited itself to tax sops for some industries.

"Other than a few tax cuts, I don't see any major measure on the policy front, which was technically not even expected. The budget was exactly what it was anticipated and there were no surprises. So, investors did not take a larger bet based on that," said Hansal Thacker, director at Lalkar Securities.

 

Defensive stocks like technology and pharma would continue to attract interest, he added.

The Sensex closed 0.48 percent higher at 20,464.06, while the broader Nifty closed up 0.41 percent at 6,073.30.

Overseas investors sold Indian shares worth 158.6 million rupees on Friday, exchange data showed.

Auto shares rose after the finance minister proposed excise duty reductions on small cars, two-wheelers, commercial and larger vehicles in the interim budget for 2014/15. Two-wheeler maker Hero Motor Corp gained 1.83 percent, while utility vehicle maker Mahindra and Mahindra rose 2.62 percent.

Bank stocks also rose, with HDFC Bank gaining 1.34 percent, while ICICI Bank was up 2.09 percent, tracking positive sentiment from the government's planned borrowing and fiscal deficit targets and infusion of $1.8 billion into state-run banks.

Shares of power companies gained, with Tata Power closing 4.87 percent higher after activist-turned-politician Arvind Kejriwal resigned as chief minister of Delhi on Friday, frustrated by obstacles put in the way of the Jan Lokpal bill.

Jet Airways ended up 3.26 percent on expectations that Etihad may be forced to make an open offer to retail shareholders after the market regulator served notice to the Abu Dhabi-based airline, a source told Reuters.

Among the decliners, DLF lost 1.69 percent after its December-quarter net profit lagged estimates when adjusted for 1.92 billion rupees of tax credit.

(Reporting by Indulal PM; Editing by Prateek Chatterjee)