Auto shares race ahead, at 10-month high after ‘small car’ tax cut buzz

All 15 auto stocks gained, with Hero MotoCorp and Maruti Suzuki leading the rally after a Reuters report said the government may cut GST on small cars from 28% to 18%.

A parking lot with a lot of small cars. (Representational Image)

Credit: Reuters File Photo

Indian auto stocks jumped 4% to their highest level in 10 months on Monday, after Reuters reported that the government has proposed lowering the goods and services tax on small cars as part of sweeping consumption tax cuts.

Auto shares were the top sectoral gainers on the benchmark Nifty 50, which rose 1.3%.

The government has proposed lowering the goods and services tax on small petrol and diesel cars to 18% from 28%, Reuters reported citing a government source.

India's finance ministry did not reply to an e-mail seeking comment.

All 15 stocks on the auto index rose. Motorcycle maker Hero MotoCorp jumped 7%, followed by top carmaker Maruti Suzuki's 6.6% rise.