Nifty auto index surges 7% in biggest weekly advance in 17 months

The Nifty Auto index, a gauge for the performance of automobile and auto ancillary stocks, jumped nearly 7 per cent during the week. This was the biggest weekly advance for the index since January 31, 2021, when it had jumped 9.3 per cent. The latest gain comes on the back of easing commodity prices and supply chain issues.  In a note Morgan Stanley has said the auto industry looks “attractive’’. Volume outlooks across segments are constructive, companies have taken price hikes but cost pressures are easing, as are supply chain issues, it has said. In the past five years, the auto stocks have underperformed the broader market not just in India but US and China as well. However, on a year-to-date basis, the Nifty Auto index has outperformed the Nifty 50 index by 15 percentage points. Going ahead, the brokerage says, the auto sector has the right drivers in place to outperform.