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Informist, Friday, Dec 27, 2024

MUMBAI – Shares of automobile companies and auto parts makers are expected to trade in a range next week while taking cues from December wholesale volume data, according to analysts. Some of the passenger vehicle and two-wheeler makers are expected to report moderation in December sales compared to the year-ago period on account of weak retail demand and caution amongst passenger vehicle dealers due to rising inventory. Commercial vehicle makers are expected to post mixed sales for December, but tractor volumes are seen up.

In the week gone by, the Nifty Auto index closed 2.3% higher at 23099.05 points, after closing lower for two weeks in a row. Of its 15 constituent stocks, 12 gained while the rest declined. Mahindra & Mahindra and Tata Motors were among the top gainers. Hero MotoCorp and Exide Industries were among the stocks that ended lower. Compared to the Nifty Auto, the benchmark Nifty 50 and BSE Sensex gained by 1% and 0.8%, respectively.

In the week gone by, the depreciation of the rupee pushed export-oriented sectors like automobiles, information technology, and pharmaceuticals higher. The fall in the rupee helps companies to provide their products or services at a lower price to importing countries, stimulating demand there.

Key heavyweight stocks demonstrated signs of recovery, suggesting the potential for the Nifty Auto index to move higher in the coming sessions, said Rajesh Bhosale, technical analyst at Angel One. Next week, the sectoral index's immediate resistance is pegged at 23,800–24,000, while 22,500 is seen as a crucial support zone.

According to Motilal Oswal Financial Services Ltd.'s Ruchit Jain, investors would wait for the December auto sales numbers to get a better perspective on the direction that the sectoral index will take. "From here on, 22500-24000 is the consolidation zone for the auto index. After sales announcements, we might see stock-specific movements. Within the passenger vehicle space, M&M is the only stock that has not seen a price-wise correction, and in the two-wheeler space Eicher Motors stands out," Jain said. 

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The 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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