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Informist, Friday, Aug 2, 2024

MUMBAI – The Nifty Auto index may continue to consolidate next week, according to analysts. Factors such as weak July sales data by most auto companies and negative sentiment in global markets on worries of a slowdown in the US are likely to weigh on auto stocks. This week, the Nifty Auto index ended 2% lower at 25714.45. In comparison, the Nifty 50 closed 0.50% lower, and the Sensex declined 0.40%. 

Of the 16 constituents in the auto index, 11 declined and five gained. TVS Motor Co and Ashok Leyland were among the top gainers. Exide Industries and Mahindra & Mahindra were among the top losers. The two companies announced earnings for Apr-Jun this week. M&M reported a decline of 5.3% on year in the standalone bottomline, and Exide Industries registered a growth of 15.6% on-year. 

"We could see further decline in the auto space on account of weakness in the broader market due to weak global cues," said Ruchit Jain, lead research analyst at 5paisa. "A negative divergence is getting formed in the Nifty Auto index, where the new highs have been reached this week, but that has not been supported by a new high momentum oscillator, so such divergence leads to a corrective phase," he said.

"Many auto companies reported a strong growth in earnings for Apr-Jun this week. However, that did not generate buying interest. This is because most stocks have seen a good run-up before the results, and now we are seeing the unwinding of stocks as the global markets have also turned cautious," Jain said.

Next week, the immediate support for the auto index is seen at 25300 and resistance at 26300. Further, TVS Motor Co, Eicher Motors, MRF, and Bharat Forge will be in focus as they are scheduled to announce earnings for Apr-Jun. 

TOP HEADLINES
* Maruti Suzuki production marginally dn on yr in Jul at 185,641 units
* Lower domestic dispatches weigh on Hero MotoCorp's total July volumes
* Earnings Review: High JLR, CV sales boost Tata Motors' Apr-Jun PAT
* Lower passenger car, SUV sales drag down Maruti Suzuki July volume
* Eicher Motors Royal Enfield sales dn 8% YoY in Jul, CV sales up 12.7%
* Tata Motors net profit rises 74% YoY in Apr-Jun, beats Street view
* TVS Motor July total sales rise 9% on year to 354,140 units
* Tube Investments Apr-Jun consol PAT up 4.6% YoY to 2.25 bln rupees
* Escorts Kubota Apr-Jun sales fall 1.5% YoY, PAT rises 2.4%
* M&M total automobile sales flat on yr in Jul, tractor volumes up 8%
* Lower medium, heavy truck sales weigh on Ashok Leyland's July volume
* Uno Minda, Aisin Corp in pact to manufacture, sell sunroofs
* Hero MotoCorp commences operations in Philippines
* Tata Motors' total sales fall 11% on year at 71,996 units in July
* Bajaj Auto's total sales in Jul rise 11% on year to 354,169 units
* Escorts Kubota tractor sales up 3.6% on year at 5,769 units in Jul
* Earnings Review: Maruti Suzuki earnings beat view, PAT jumps 47% YoY
* Earnings Review: M&M PAT falls 5% YoY to 26.1 bln rupees, misses view
* Bharat Forge's arm gets licence to manufacture defence products
* Maruti Suzuki beats view; Apr-Jun PAT surges 47% on yr, sales up 10%
* JBM Auto Apr-Jun consol PAT rises nearly 11% YoY to 334 mln rupees
* M&M Apr-Jun PAT down 5% on yr at 26.13 bln rupees, misses Street view
* Earnings Outlook: Tata Motors PAT seen surging 68% on yr in Apr-Jun
* RattanIndia arm Revolt gets eligibility to claim e-vehicle subsidy
* Earnings Outlook: Volumes, prices hikes to boost M&M topline Apr-Jun
* India's e-vehicle story just getting started, says Ola's Aggarwal
* Sona BLW gets production-linked scheme certificate for 2 more pdts
* India Bond Placement: Uno Minda OKs raising 1.5 bln rupees via NCDs
* PRESS: Delhi govt to give tax benefit for scrapping old vehicles
* Govt extends duration of e-vehicle promotion scheme till Sep 30
 

Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:

End

Reported by Darshan Nakhwa 
Edited by Deepshikha Bhardwaj

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