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Informist, Friday, Dec 13, 2024

MUMBAI - Shares of automobile and auto parts makers may continue to consolidate next week owing to the lack of positive domestic triggers and high valuations of stocks, according to analysts. The automotive space has been in a consolidation phase for the past few months even as the broader market has gained. The trend is expected to continue till the start of the Oct-Dec earnings season.

In the last two weeks, the broader market saw a good pull-back, but the automobile space has not shown any positive momentum yet. Investors remain cautious in their approach because of softness in retail demand after the festival season and high valuations of automobile stocks, said an analyst at a domestic brokerage. In the past 10 days, several automakers also announced that they would increase prices from January. This is seen as a move to stimulate demand, the analyst said. 

In 7–8 months till September, auto stocks saw a good run-up, resulting in valuations touching new highs. In October and November, there was a correction but valuations remain high and there could be some time-wise correction left, said Ruchit Jain, vice-president of technical research at Motilal Oswal Financial Services Ltd. Going forward, 24200 is the immediate resistance zone for the Nifty Auto index and a breakout above that could bring positive momentum, he said. Otherwise the sectoral index will continue to move in a range.

This week, the Nifty Auto closed 0.8% lower at 23773.10 points. In comparison, the benchmark Nifty 50 and Sensex gained 0.4% and 0.5%, respectively. Of the 15 stocks in the Nifty Auto, nine declined over last week, while the rest gained. While Samvardhana Motherson International and Tata Motors were the biggest losers, MRF and Balkrishna Industries were among the top gainers.

TOP HEADLINES
* Ashok Leyland hikes CV prices by up to 3% on inflation, higher input costs
* Ashok Leyland gets INR 3.46-bln diesel bus chassis order from Tamil Nadu
* German fincl institution lends EUR 30 mln to JK Tyre for tyre unit expansion
* Govt's clampdown on steel imports impacting automotive steel industry - ACMA
* Tata Motors to raise prices of trucks, buses by up to 2% from January
* M&M launches upgraded versions of construction equipment vehicles
* Tata Power arm, Tivolt Electric Vehicles partner to build EV charging infra
* Hyundai Motor to set up 600 public EV charging stations in seven years
* PRESS: Discounts on passenger vehicles up in Dec; retail sales fall YoY Nov
* Bharat Forge raises INR 16.5 bln by placing QIP shares at INR 1,320 each
* Tata Motors to hike passenger car prices by up to 3% from January
* Nov auto retail sales up 11.2% YoY on Diwali spillover, rural support - FADA
* TVS Motor launches 2.2 kWh battery variant of e-scooter in Sri Lanka
* M&M changes new EV brand name to 'BE 6' amid legal conflict with IndiGo
* M&M hikes prices of SUVs, CVs by up to 3% on rising commodity costs
* TVS Motor launches TVS RT-XD4 engine platform
* M&M's step-down subsidiary incorporates arm Target Hybren for INR 1.5 mln
* M&M's total automobile output at 80,073 units in Nov, up 14.3% on year
* Samvardhana Motherson arm to buy 95% stake in Japan co Atsumitec for $57 mln

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 Rajeev Pai

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