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Auto stocks trade higher after government cuts excise duty on fuel

Fuel price hike has been one of the major factors impairing demand, particularly in the two-wheeler segment. Analysts say the cut in fuel prices will provide some relief to customers

May 23, 2022 / 11:28 IST
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Auto stocks traded higher on Monday after the government cut excise duty on fuel and imposed export duty on steel inputs.

Maruti Suzuki India rose 4 percent, Mahindra & Mahindra 3 percent, Ashok Leyland 5 percent, Hero MotoCorp 2.2 percent, TVS Motor Co 1.7 percent, Tata Motors Ltd 1.5 percent, and Bajaj Auto gained 1 percent. The BSE Auto Index rose 2.2 percent.

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On May 21, the government announced a slew of fiscal measures to assuage price concerns. Steps include tax cuts of Rs 8 and Rs 6 per litre on gasoline and diesel, a Rs 200 subsidy on cooking gas for poor households, and reduction of import duty on raw materials and intermediaries of plastics, iron and steel.

The fuel price hike has been one of the major factors impairing demand, particularly in the two-wheeler segment.  Analysts say the cut in fuel price will provide some relief to customers. Petrol and diesel prices have increased 21 percent and 15 percent in the last one year, and 58 percent each in the last two years.