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Stocks of automakers are expected to trade with a positive bias next week, while eying macroeconomic factors such as the rupee's performance and the price of diesel. A hike in prices of subsidized diesel is expected around next week, following the heavy revenue loss faced by oil marketing companies due to depreciation of the rupee against the dollar. Rising demand in rural areas has led analysts to see some bright spots in the outlook for auto stocks, and made investor sentiment bullish on companies having a share in Tier-II and Tier-III cities. Maruti Suzuki India Ltd has the largest passenger car presence, and so the rural demand is benefiting the company. Some net exporters of automobiles such as Bajaj Auto Ltd are still being eyed as stocks on the rise on advantage due to rupee depreciation. The auto stocks had started gaining traction in the last week. With the new RBI (Reserve Bank of India) Governor (Raghuram Rajan) at the helm, there are hopes that interest rates may come down soon and push auto sales in the upcoming festive season. Based on expectations of a potential positive trigger from the RBI and beaten-down valuations, the auto sector looks good. On data-specific terms, there is nothing. A diesel price hike in the coming week may weaken Mahindra & Mahindra Ltd stocks. Otherwise the stock is bestplaced in the sector.
Stocks of automakers are expected to trade with a positive bias next week, while eying macroeconomic factors such as the rupee's performance and the price of diesel. A hike in prices of subsidized diesel is expected around next week, following the heavy revenue loss faced by oil marketing companies due to depreciation of the rupee against the dollar. Rising demand in rural areas has led analysts to see some bright spots in the outlook for auto stocks, and made investor sentiment bullish on companies having a share in Tier-II and Tier-III cities. Maruti Suzuki India Ltd has the largest passenger car presence, and so the rural demand is benefiting the company. Some net exporters of automobiles such as Bajaj Auto Ltd are still being eyed as stocks on the rise on advantage due to rupee depreciation. The auto stocks had started gaining traction in the last week. With the new RBI (Reserve Bank of India) Governor (Raghuram Rajan) at the helm, there are hopes that interest rates may come down soon and push auto sales in the upcoming festive season. Based on expectations of a potential positive trigger from the RBI and beaten-down valuations, the auto sector looks good. On data-specific terms, there is nothing. A diesel price hike in the coming week may weaken Mahindra & Mahindra Ltd stocks. Otherwise the stock is bestplaced in the sector.
