Auto stocks rallied over 7% on Monday continuing their winning momentum of the last one month, with Bharat Forge (7%) leading the gains. It was followed by Ashok Leyland which hit its 52-week high. Sectorally, the Nifty Auto index outshined all its peers rising more than 3% on an intraday basis.

Auto OEMs and sector heavyweights Mahindra & Mahindra (M&M) and Maruti Suzuki also hit their fresh 52-week highs while two-wheeler majors TVS Motor Company and Eicher Motors also attained their fresh 52-week peaks. They were up between 4% and 2%.

In the 15 stock Nifty Auto index, 14 were trading in the green around 1:30 pm while MRF was the sole loser, though it was down marginally (0.4%) around this time.

The other gainers were Samvardhana Motherson International, Bajaj Auto, Exide Industries, Hero MotoCorp, BOSCH, Tube Investments of India, Balkrishna Industries and MRF.

The sentiments were upbeat as even before the implementation of the new Goods and Services Tax (GST) on September 22, top auto companies like M&M, Tata Motors and Hyundai Motor India have announced price cuts.

The GST Council in its meeting held last week introduced sweeping reforms by introducing two slabs of 5% and 18%. The GST on automobiles with a certain threshold has been brought down to 18% from an earlier 28%.Under the indirect tax structure the GST has been cut on all petrol & petrol hybrids, LPG, CNG cars not exceeding 1,200 cc engine capacity and 4,000 mm. The GST has been cut on diesel & diesel hybrids not exceeding 1,500 cc and 4,000 mm. For motorcycles below 350 cc, the GST is slashed to 18% from an earlier 28%.The government has also cut GST on three-wheelers to 18%.

The Nifty Auto index has surged 16% in the past one month. TVS Motor and Maruti have been the best performers over a one-month period, each gaining 21%.

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