Auto Stocks Outlook for the week - 05 to 09.May.2014
Stocks
of major automobile manufacturers are seen trading in a narrow range, but with
a
negative
bias in the week ahead, tracking the broader indices and also in reaction to
the
dismal
April sales performance. Hero MotoCorp Ltd's stock as their pick for the week
on
the
back of impressive sales in April.
Hero
MotoCorp looks positive for the week the sales have been good...would be the
pick
of
the week in the auto space. The company reported a 14.4% on-year rise in sales
at
571,045
units. The absence of any automobile manufacturer detailing earnings for Jan-
Mar
during the coming week has kept sector-specific triggers out of the scene, and
most
of
the action is seen in line with the broader indices.
A
minor negative bias is seen in trading for auto stocks next week due to two
reasons--
mostly
poor sales performance during the coming week, and the prospect of a below-par
monsoon
in sight. A medium-term view, too, doesn't see automobile stocks
outperforming,
due to the bad monsoon hampering the aim of the Reserve Bank of India
to
bring down the consumer price-based inflation by January.
Unseasonal
rains in parts of the country have impacted the winter crop negatively, and
hence
tractor sales saw an on-year decline during April. Stocks of respective makers
such
as
Mahindra & Mahindra Ltd and Eicher Motors Ltd taking cues from the same,
and
trading
with a negative bias as a result.
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