Auto Stocks Outlook for the week – 26 to 30.12.2016
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The shares of automobile companies are seen trading with a negative bias next week, with heavyweights such as Tata Motors Ltd and Mahindra & Mahindra Ltd expected to drag the Nifty auto index lower. Tata Motors and M&M are looking very vulnerable next week and are likely to induce more weakness in the already weak Nifty auto index. Tata Motors is likely to fall further and could test the support level of 430 rupees, and M&M is also expected to decline, with support at 1,100 rupees. This week, shares of most auto companies ended lower compared to the last, with Eicher Motors registering the steepest decline of 3.8%. The government's announcement on Nov 8 to withdraw 500-, and 1,000-rupee notes from circulation led to a cash crunch and hit automobile sales. Delhi, West Bengal, Uttar Pradesh saw a sharp drop of 32-42% in vehicle registration during the first week of December compared to November. Rajasthan and Jharkhand saw a moderate recovery during the period but the numbers are still below the usual figures. TVS Motor is likely to be the top gainer, outperforming the market. It is likely to find support at 360 rupees, a Mumbai-based. The Nifty auto index, which fell 1.8% on week, is seen trading on the lower side next week, in a range of 8750-9200 points. The Bajaj Auto stock is likely to trade with a neutral bias but could test the resistance level of 2,800 rupees. Hero MotoCorp Ltd is seen drifting lower towards 2,950 rupees. Eicher Motors is expected to trade with a negative bias next week. The stock is likely to find support at 19,500 rupees. Shares of commercial vehicle makers are likely to remain under pressure, as the ongoing cash crunch will keep logistics operations subdued in the near term.
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Auto Stocks Outlook for the week – 26 to 30.12.2016
The shares of automobile companies are seen trading with a negative bias next week, with heavyweights such as Tata Motors Ltd and Mahindra & Mahindra Ltd expected to drag the Nifty auto index lower. Tata Motors and M&M are looking very vulnerable next week and are likely to induce more weakness in the already weak Nifty auto index. Tata Motors is likely to fall further and could test the support level of 430 rupees, and M&M is also expected to decline, with support at 1,100 rupees. This week, shares of most auto companies ended lower compared to the last, with Eicher Motors registering the steepest decline of 3.8%. The government's announcement on Nov 8 to withdraw 500-, and 1,000-rupee notes from circulation led to a cash crunch and hit automobile sales. Delhi, West Bengal, Uttar Pradesh saw a sharp drop of 32-42% in vehicle registration during the first week of December compared to November. Rajasthan and Jharkhand saw a moderate recovery during the period but the numbers are still below the usual figures. TVS Motor is likely to be the top gainer, outperforming the market. It is likely to find support at 360 rupees, a Mumbai-based. The Nifty auto index, which fell 1.8% on week, is seen trading on the lower side next week, in a range of 8750-9200 points. The Bajaj Auto stock is likely to trade with a neutral bias but could test the resistance level of 2,800 rupees. Hero MotoCorp Ltd is seen drifting lower towards 2,950 rupees. Eicher Motors is expected to trade with a negative bias next week. The stock is likely to find support at 19,500 rupees. Shares of commercial vehicle makers are likely to remain under pressure, as the ongoing cash crunch will keep logistics operations subdued in the near term.
