BANGALORE: Indian stocks, driven by the automobile sector, rose for the second day in a row on Monday, even as gains were curtailed by sharp sell-offs in metal stocks after the government announced changes to the commodity tax structure to fight inflation.
The NSE Nifty 50 Index rose 0.44% to 16,338.45 at 0520 GMT, while the S&P BSE Sensex rose 0.53% to 54,616.53. Both indices closed about 3% higher on Friday, marking their first weekly gains in six.
The Nifty Metal Index has plunged nearly 9%, its lowest level since December, with JSW Steel, Tata Steel falling more than 11% each. The Nifty Auto Index rose 2.89%.
“News of waiver of export duty on iron ore and import duty on steel is seeing pressure on metal stock sales as it may affect their margins,” said Ajit Mishra, vice president of research at Religare Broking.
“… but it will lower the price of raw materials in the automobile sector,” Mishra said.
The Indian government said on Saturday, effective May 22, that it would withdraw import duties on anthracite, PCI coal and coking coal.
VK Vijayakumar, chief investment strategist at Geojit Financial Services, said the government’s aggressive move to reduce excise duty on petrol and diesel and other initiatives to reduce steel prices would reduce the RBI’s burden on inflation.
While this is a positive from a market perspective, Vijayakumar added that the government’s excessive borrowing and revenue deficit were areas of concern beyond the budget estimates.
Maruti Suzuki India, Mahindra and Mahindra Nifty were the top gainers in the 50s, up 4.2% and around 3%, respectively.
Food supplier Zomato rose 2% ahead of its quarterly results.
Larger Asian stocks declined due to concerns over the impact of rising interest rates on global economic growth. (Reporting by Rama Venkat in Bangalore; edited by Uttaresh.V)