Bang in the middle of the festive season, Indian investors seem to be favoring auto stocks. GST reforms and Prime Minister Narendra Modi's announcements of GST Maha Bachat seems to have spurred investors towards auto stocks.
On Tuesday, auto indices - BSE S&P Auto as well as Nifty Auto were inching towards their 52-week highs. Nifty Auto was the third most favored sector among investors in trade - with the index surging ahead by 0.66 percent in intra-trade. However, what makes the auto index particularly interesting is the volumes. Collectively some 7.85 crore shares exchanged hands on the auto counters as opposed to PSU bank (1.90 crores) and Metal (2.70 crore).
While stocks such as Ashok Leyland, MRF Industries Limited, Motherson Sumi, Maruti and Tata Motors were the pick among heavyweights, investors also seemed to favor auto distributors and businesses related to the auto industry. Auto stocks inching closer to their 52-week highs includes the list of Lumax Auto, Jay Bharat Maruti, Ask Automotive, and Swaraj Engines.
WHY ARE AUTO STOCKS SURGING?
In trade on Tuesday, auto companies reported positive signs to consumer demand and favorable outlook helped many auto-stocks gain momentum. In the first-half of the trading session, besides the positive outlook from GST, many auto companies reported an increase in bookings causing a cheer on counters of Hyundai, TVS Motors, Bajaj Auto, as well as Tata Motors.
Experts say the festive season and lower prices could help the auto sector continue this growth in the coming weeks.
