Auto stocks slide as RBI keeps policy rate unchanged

Shares of eight automobile companies fell by 0.51% to 2.85% at 12:36 IST on BSE as the Reserve Bank of India kept its main lending rate viz. the repo rate unchanged at 8% after the monetary policy review.

Escorts (down 2.85%), Mahindra & Mahindra (down 2.79%), TVS Motor Company (down 2.48%), Bajaj Auto (down 1.48%), Tata Motors (down 1.33%), Eicher Motors (down 1.15%), Maruti Suzuki India (down 0.64%) and Hero MotoCorp (down 0.51%), edged lower. Ashok Leyland was up 0.47%.

The S&P BSE Auto index was down 1.18% at 19,057.01. It underperformed the Sensex, which was down 0.39% at 28,449.64.

The S&P BSE Auto index had outperformed the market over the past one month till 1 December 2014, rising 3.79% compared with 2.49% rise in the Sensex. The index had also outperformed the market in past one quarter, rising 10.06% as against Sensex's 6.30% rise.

The Reserve Bank of India (RBI) kept its main lending rate viz. the repo rate unchanged at 8% and also kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4% of net demand and time liabilities (NDTL) after a monetary policy review today, 2 December 2014.

Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing.

Meanwhile, Tata Motors after trading hours yesterday, 1 December 2014, said its total sales rose 2.09% at 41,720 units in November 2014 over November 2013. The company's domestic sales of Tata commercial and passenger vehicles for November 2014 at 37,427 units remained flat. Tata Motors' total exports jumped 17% to 4,293 units in November 2014 over November 2013. The company's sales of commercial vehicles in the domestic market declined 5% at 25,406 units in November 2014 over November 2013. Sales of medium and heavy commercial vehicles (M&HCV) jumped 39% at 9,452 units in November 2014 over November 2013. Sales of light commercial vehicles (LCVs) fell 20% at 15,954 units in November 2014 over November 2013. The trend of growth in passenger vehicles continued, with the strong Zest and Nano sales in November 2014, Tata Motors said.

Bajaj Auto reported 0.42% fall in total sales to 3.09 lakh units in November 2014 over November 2013. The sales numbers were announced before market hours today, 2 December 2014. Bajaj Auto's motorcycles sales declined 6% to 2.61 lakh units in November 2014 over November 2013. Sales of commercial vehicles surged 48% to 47,311 units in November 2014 over November 2013.

Hero MotoCorp's total motorcycle sales rose 3.18% to 5.47 lakh units in November 2014 over November 2013. The sales numbers were announced before market hours today, 2 December 2014.

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