Automobile
Stocks Outlook for the week – 14 to 18.09.2015
(Under pressure on US Fed rate hike expectation)
( www.rupeedesk.in )
Stocks
of automobile companies are likely to continue tracking broader indices next
week, and trade under pressure because of anticipation of a hike in interest
rates by the US Federal Reserve in its monetary policy on Sep 16-17.
In
overseas stock markets, there is uncertainty on whether the US Federal
Reserve's first interest rate hike in a decade will come at Fed's monetary
policy meeting next week. A hike in interest rate in the US is likely to drain
liquidity from emerging markets like India and redirect it to developed economies.
Thursday being a trading holiday means that the impact of the US Federal
Reserve's decision would be factored in only on Friday.
Among
individual manufacturers, Mahindra & Mahindra Ltd on Thursday launched the
TUV300
compact
sport utility vehicle, and is likely to see its counter trade with a positive
bias due to the
warm
response the vehicle has received. With right segment customer's target, we
believe the new TUV300 has the potential to add over 20% to M&M's current
UV (utility vehicle) volume run-rate on steady state basis assuming partial
cannibalisation with Bolero.
We
believe the product is an ideal upgrade to semi-urban/rural and entry level
customers in urban centres. Tata Motors Ltd is another automaker that sees a
positive bias next week thanks to a marginal rise in its global wholesales
volume. Global wholesales volume rose 1.5% on year to
74,639
units. Heavy reliance on the Splendor would see Hero MotoCorp Ltd's counter
trade with a negative bias in short term.
