Cigarette stocks crash as excise duty raised

Led by ITC, cigarette stocks came under selling pressure, falling by up to 8 per cent, as excise duty on various tobacco products other than beedi was raised by about 10-15 per cent in Budget 2016-2017. Shares of ITC tumbled 7.9 per cent, Godfrey Phillips went down by 5.88 per cent, Golden Tobacco dropped 5.31 per cent and VST Industries shed 2.14 per cent on BSE. ITC was the top loser among the 30-Sensex stocks. Weakness was also seen in the broader market as in a knee-jerk reaction to various tax proposals made by Jaitley in his Budget 2016-17, the stock market benchmark Sensex crashed by 660 points but recovered back to the positive territory later on heavy buying by domestic institutions. "Excise duties on various tobacco products other than beedi have been raised by about 10 to 15 per cent," Finance Minister Arun Jaitley said in the Budget speech.