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Auto index rises on car sales

August 9, 2010

INDIA

The BSE Auto Index ended 1.1 percent higher on Monday, buoyed by data that showed a record 158,764 cars were sold last month.

Data from the Society of Indian Automobile Manufacturers (SIAM) showed   car sales rose 38 percent in July, as customer sentiment remained strong on hopes of strong economic growth and a fall in food prices.

However, the sector is likely to face capacity constraints, a possible rise in interest rates and supply bottlenecks as the festive season draws near, when demand for vehicles peak.

Stocks leading the index rise were TVS Motor, up 3.9 percent, Tata Motors which rose 2.7 percent, and Hero Honda, which ended 1.3 percent up. M&M and Bosch ended lower.

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