Realty, auto stocks fall as Interim Budget disappoints

MUMBAI: Realty and auto stocks erased all gains after the interim budget presented by the acting Finance Minister Pranab Mukherjee did not provide any sops to the sectors as was expected.

The realty sector was banking on a relaxation of Section 80 IB(10)of the Income Tax Act which would offer tax breaks for housing projects with flat sizes of less than 1,500 sq feet but is restricted to projects began before March 31, 2007. The builders hoped that if this date was extended, it would have helped projects meant for low-income groups to take off. An increase in tax breaks provided to house finance companies from 20 per cent to 40 per cent was also expected, which did not see any mention in the Interim Budget.

The BSE Realty Index was down 3.16 percent after rising as much as 3.67 percent earlier in the session. The sectoral index rose nearly 6 per cent in the last one week in the run up to the interim budget. Unitech plunged 7.06 per cent to Rs 29.60, DLF was down 3.92 per cent at Rs 154.30, HDIL slumped 5.19 per cent to Rs 83.10 and Indiabulls Realty fell 8.94 per cent to Rs 99.35.

The auto sector, which expected reduction in excise duty, also lost ground as the government did not announce any measures to boost demand in the sector in its interim budget.

Maruti Suzuki was down 2.33 per cent at Rs 615, Mahindra & Mahindra declined 4.13 percent at Rs 307 and Tata Motors fell 0.36 percent at Rs 137.35.