Indian stock benchmarks close tad higher, led by autos; IT drop caps gains

By Bharath Rajeswaran

(Reuters) - India's equity benchmarks closed marginally higher on Monday, led by gains in automakers after they announced price cuts following tax reductions, while weakness in IT stocks capped gains.

The NSE Nifty 50 gained 0.13% to 24,773.15 and the BSE Sensex added 0.09% to 80,787.3. Both indexes rose as much as 0.5% during the session.

Nine of the 16 major sectors logged gains. The broader small-caps and mid-caps rose 0.2% and 0.5%, respectively.

The auto index gained 3.3%, driven by Tata Motors, Mahindra & Mahindra and Maruti Suzuki after they announced the price cuts across vehicle portfolios.

"Goods and services tax rationalisation is a crucial catalyst to simplify compliance and boost consumption in the country, which is the need of the hour," said Tarun Singh, managing director, Highbrow Securities.

While steep U.S. tariffs represent a clear hurdle, India has its own mechanism to absorb any gaps from trade disequilibrium due to its consumption story, he added.

JSW Steel, Tata Steel, and SAIL rose 2.6%, 0.7% and 1.7%, respectively, after Morgan Stanley turned positive on the sector, citing stronger demand.

The brokerage said China's push to curb excess competition and possible production cuts could lift steel prices, benefiting Indian producers.

IT index fell about 1% after Citi flagged concerns surrounding the U.S. economy and clients' focus on cost-cutting.

Global markets rose as expectations of an imminent U.S. rate cut firmed after data showed the world's largest economy created far fewer jobs than expected in August.

The currency and debt markets were closed on the day due to a local holiday, and will reopen on Tuesday.

The Securities and Exchange Board of India said settlements for cash and share-lending trades on Monday and Tuesday will be conducted on Wednesday. Settlements for trades on September 4 and 5 will be completed on Tuesday.

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sumana Nandy, Janane Venkatraman and Harikrishnan Nair)