The rally in auto stocks may pause for now as demand cools off and companies grapple with supply-side issues, say analysts
Union Minister for Road Transport and Highways Nitin Gadkari's proposal to levy 'green tax' on old vehicles polluting the environment nudged investors to off-load auto stocks from their portfolio
Ashok Leyland, Bharat Forge and Tata Motors from the auto index were down in the range of 3 per cent to 4 per cent.
At 02:50 pm, these three stocks were trading higher in the range of 2% to 4%, as against a 0.75% fall in the S&P BSE Sensex and 0.45% decline in S&P BSE Auto index
Bajaj Auto said the operating performance was driven by favorable mix, lower marketing spends, and operating leverage
Nifty Auto index has jumped 8 per cent on a year-to-date basis in 2021
The medium-term trend of Sensex is bullish till the time it defends 44,000 levels
A strong close above Rs 770 in M&M may trigger a rally Rs 825 levels
Two-wheeler stocks such as TVS Motor, Hero MotoCorp, and Bajaj Auto were among the top gainers on the Nifty Auto index, surging up to 1.6 per cent in the intra-day deals on the National Stock Exchange
For the auto sector as a whole, analysts now expect polarisation to get more entrenched where rural-focused plays like M&M, Escorts etc to do well
Hero MotoCorp sold 13.34 lakh units during the quarter under review, down 25 per cent on YoY basis
Expected demand pick-up in tier-II and tier-III cities as well as preference for personal mobility amid the Covid-19 health concerns are the top two factors that would drive the demand, analysts say.
In May, the S&P BSE Auto index gained 5.6 per cent as compared to 3.8 per cent decline in the S&P BSE Sensex.
Ashok Leyland and Hero MotoCorp surged over 10 per cent each
Eicher Motors, Bharat Forge, M&M, Maruti Suzuki and Hero MotoCorp slipped more than 5 per cent on the NSE today
Sensex dips 1,310 pts from day's high
Of the 143 stocks from the F&O segment, 10 have seen their market price more than halve in the March F&O series.
Post the coronavirus outbreak, the correction in the auto index is now closer to that witnessed during the 2008 Global Financial Crisis (GFC) period, said HDFC Securities
Nifty Metal index tumbled 6.6 per cent to 2,134, while Nifty Media index slipped 5.5 per cent to 1,518, and Nifty Auto was down 4 per cent to 6,662, as against a 3.9 per cent decline in the Nifty50
The S&P BSE Sensex on Tuesday tanked 642 points or 1.73 per cent to end at 36,481.09 while the NSE's Nifty50 settled at 10,818, down 186 points or 1.69 per cent.