Auto Stocks Outlook for the week – 20 to 22.10.2014
( www.rupeedesk.in )
Stocks
of automobile companies are seen trading in a narrow range next week,
which
will have lesser sessions than normal. Automobile manufacturers' stocks have
seen
sell-offs over the past few weeks, in line with broader domestic equity
markets.
Equity markets will have a truncated week ahead on account of Diwali and
Balipadyami
Diwali festivals.
While
there will be overall weakness in automobile stocks over the next week, some
counters
such as Ashok Leyland are expected to perform better and gain some
value,
as their current value is attractive. Ashok Leyland is seen gaining from
acceleration
in economic activity, which would lead to greater purchase of
commercial
vehicles. We sees the company's medium and heavy commercial
vehicle
sales growing 13.3% in the on going financial year, it said in a recent report
on the
company.
Bajaj
Auto Ltd's stocks are seen falling as the company's Jul-Sep earnings, declared
earlier
this week, were below market estimates. Over the past week, broader
indices
lost around 1%, while the BSE's Auto Index fell nearly 2%. High beta stock
categories
such as information technology, financial services and automobiles have
seen
sell-offs and this is expected to continue for most stocks in these industries over
the next week.
