Auto, consumer durables stocks rise on cheaper credit by banks
Mumbai: Auto and consumer durables shares ended the day on a positive note on Friday, surging as much as 9 percent, in the wake of the government deciding to enhance capital infusion into PSU banks to enable them to provide cheaper retail loans.
Shares of TVS Motor surged 8.81 percent, while Tata Motors gained 1.44 percent, Maruti Suzuki (1.10 percent), Mahindra & Mahindra (0.93 percent) and Hero Motocorp (0.13 percent).
Tracking gains in these stocks, the BSE auto index ended the day at 11,466.75, up 0.94 percent.
From consumer durables stocks, PC Jeweller rallied 4.19 percent, while Whirlpool went up by 0.86 percent, Titan (0.35 percent) and TTK Prestige (0.29 percent).
The consumer durables index ended the day 0.35 percent higher at 5,912.77.
Ahead of the festival season, public sector banks will provide cheaper loans for auto and consumer goods purchases with a view to stimulating demand.
Banks would lower lending rates as the government yesterday decided to provide additional funds to the PSU banks to enable them financing of auto and consumer goods purchases.
The decision to increase the quantum of capital infusion to the banks was taken at a meeting between Finance Minister P Chidambaram, RBI Governor Raghuram Rajan and Economic Affairs Secretary Arvind Mayaram in New Delhi yesterday.
"This amount (Rs 14,000 crore provided for capital infusion in Budget) will be enhanced sufficiently. The additional amount of capital will be provided to banks to enable them to lend to borrowers in selected sector such as two-wheeler, consumer durables, etc at lower rates in order to stimulate demand," a finance ministry statement had said.
Consumer durables, a reflection of demand for manufactured products, include TV, fridge, washing machine.
In the stock market, the BSE barometer index Sensex ended on a sluggish note at 19,915.95, up 13.88 points.