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Stocks of major automakers will move in line with the broader market, which is likely to move cautiously ahead of the Reserve Bank of India's mid-quarter monetary policy review. The RBI is scheduled to have its mid-quarter review of the monetary policy on Wednesday. Another factor likely to drive the markets is the US Federal Open Market Committee meeting on Dec 17 and 18 to discuss and debate on tapering of its bondbuying programme. Funds were coming into the emerging markets, now the US apex bank might control these measures. The Nifty and Sensex have already corrected. The trend is likely to continue next week. If Asian markets go down on fears of US Federal Reserve taper of bond-buying, then India is likely to fall in line with them. The inflation data out this week is quite dull, and, therefore, the RBI is most likely to hike rates, which will negatively impact the auto sector stocks. We expect the RBI to raise repo rate by 25 basis points. Most of the auto stocks are seen trading downwards. Hero MotorCorp Ltd still looks good among its two-wheeler peers on strong demand as rural demand is still growing. About 48-49% of sales are from rural areas. There could be some bottom-fishing in Hero MotorCorp's stock. The counter of Tata Motors Ltd is likely to trade sideways. Tata Motors' November global wholesale sale numbers were out yesterday. Although the company reported lower vehicle wholesale sales during November, falling 19.9% on year, its subsidiary Jaguar Land Rover's sales grew 15.3%, in line with the estimates. Analysts were expecting a 13-14% rise in the November vehicle sales in wholesale segment. JLR sold a total of 166 vehicles in India in November as against 178 units a year ago. The company's sales in India witnessed a decline for the first time in the last six months in November. However, on a cumulative basis, the company's sales in India have grown 23% in Jun-Nov to 1,333 vehicles in India. Its November US sales stood at 6,047 units, up 37% on year.
Stocks of major automakers will move in line with the broader market, which is likely to move cautiously ahead of the Reserve Bank of India's mid-quarter monetary policy review. The RBI is scheduled to have its mid-quarter review of the monetary policy on Wednesday. Another factor likely to drive the markets is the US Federal Open Market Committee meeting on Dec 17 and 18 to discuss and debate on tapering of its bondbuying programme. Funds were coming into the emerging markets, now the US apex bank might control these measures. The Nifty and Sensex have already corrected. The trend is likely to continue next week. If Asian markets go down on fears of US Federal Reserve taper of bond-buying, then India is likely to fall in line with them. The inflation data out this week is quite dull, and, therefore, the RBI is most likely to hike rates, which will negatively impact the auto sector stocks. We expect the RBI to raise repo rate by 25 basis points. Most of the auto stocks are seen trading downwards. Hero MotorCorp Ltd still looks good among its two-wheeler peers on strong demand as rural demand is still growing. About 48-49% of sales are from rural areas. There could be some bottom-fishing in Hero MotorCorp's stock. The counter of Tata Motors Ltd is likely to trade sideways. Tata Motors' November global wholesale sale numbers were out yesterday. Although the company reported lower vehicle wholesale sales during November, falling 19.9% on year, its subsidiary Jaguar Land Rover's sales grew 15.3%, in line with the estimates. Analysts were expecting a 13-14% rise in the November vehicle sales in wholesale segment. JLR sold a total of 166 vehicles in India in November as against 178 units a year ago. The company's sales in India witnessed a decline for the first time in the last six months in November. However, on a cumulative basis, the company's sales in India have grown 23% in Jun-Nov to 1,333 vehicles in India. Its November US sales stood at 6,047 units, up 37% on year.
