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Informist, Friday, Aug 30, 2024

MUMBAI - Shares of most automobile companies are expected to see range-bound movement next week. However, some stocks may advance due to growth in August sales, according to analysts. Automobile companies will release their August wholesale numbers on Sunday and Monday. 

This week, the Nifty Auto index closed 1.3% higher on a week-on-week basis at 26172.80. Of the 16 constituents of the index, eight gained and the remaining closed lower. Shares of original equipment manufacturers performed better than component makers during the week. While Bajaj Auto and Tata Motors were among the top gainers this week, Apollo Tyres and MRF were among the top losers. Compared to the auto index, the benchmark Nifty 50 and Sensex gained 1.7% and 1.6%, respectively, from a week ago. 

According to 5paisa's lead analyst Ruchit Jain, the auto space has seen mixed moves this week, where the index has seen slow and gradual upmove, but stocks of some of the large auto companies have seen outperformance. "This stock-specific momentum is expected to continue. We are not expecting any significant price-wise correction, but some of the auto companies that haven't performed well in the last couple of weeks could see time-wise correction," he said. Next week, immediate support for the auto index is seen at 25800 points and resistance at 26400 points.

In the coming week, the auto sector is expected to react to August sales numbers, with stock-specific moves likely to drive the market higher, said Rajesh Bhosale, technical analyst at Angel One. According to Nomura Financial Advisory and Securities (India) Pvt Ltd, sluggish retail demand and higher inventory levels at dealerships are likely to weigh on monthly passenger vehicle wholesale volumes. Similarly, commercial vehicle sales are also likely to be lower due to sluggish demand and a higher base. In comparison, two-wheeler and tractor sales are likely to grow, led by improved rural sentiment and above-normal monsoon. 

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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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