 "An employee works on an assembly line producing automobiles at a factory in Qingdao, Shandong Province. Photo: Reuters")
Shares of automobile companies were on a roll with the S&P BSE Auto index and Nifty Auto index hitting their respective new highs on Tuesday on expectation of pickup in demand.
Motherson Sumi Systems, Bharat Forge, Hero MotoCorp, TVS Motor Company and Eicher Motors were up between 3% and 4%, while, Ashok Leyland, Tata Motors, Maruti Suzuki India and Bajaj Auto up 2% on the BSE.
At 01:59 PM; the S&P BSE Auto index (26,369) and Nifty Auto index (11,821) were up 2% each, hitting new highs on the BSE and NSE. On comparison, the benchmark indices the S&P BSE Sensex and Nifty 50 index were up 0.4% each.
Thus far in December 2017, the auto index has outperformed the market by gaining nearly 5% after auto industry reported a sharp double-digit growth of 23.9% year on year in overall sales driven by strong performance registered by all segments of the industry during the month. The benchmark index gain 2% so far in the current month.
Going forward, in FY18, CARE Ratings expects the auto industry to witness gradual pickup in demand on back of release of pent up demand post the disruptions led by the effect of demonetization, ban on BS-III vehicles and Goods and Services Tax (GST) implementation begins to moderate starting Q3FY18 expected to continue in Q4FY18.
Also, demand is expected to improve on back of various initiatives taken by the government in the Union Budget 2018, the rating agency said in Auto Newscast.
Motherson Sumi Systems, Bharat Forge, Hero MotoCorp, TVS Motor Company and Eicher Motors were up between 3% and 4%, while, Ashok Leyland, Tata Motors, Maruti Suzuki India and Bajaj Auto up 2% on the BSE.
At 01:59 PM; the S&P BSE Auto index (26,369) and Nifty Auto index (11,821) were up 2% each, hitting new highs on the BSE and NSE. On comparison, the benchmark indices the S&P BSE Sensex and Nifty 50 index were up 0.4% each.
Thus far in December 2017, the auto index has outperformed the market by gaining nearly 5% after auto industry reported a sharp double-digit growth of 23.9% year on year in overall sales driven by strong performance registered by all segments of the industry during the month. The benchmark index gain 2% so far in the current month.
Going forward, in FY18, CARE Ratings expects the auto industry to witness gradual pickup in demand on back of release of pent up demand post the disruptions led by the effect of demonetization, ban on BS-III vehicles and Goods and Services Tax (GST) implementation begins to moderate starting Q3FY18 expected to continue in Q4FY18.
Also, demand is expected to improve on back of various initiatives taken by the government in the Union Budget 2018, the rating agency said in Auto Newscast.
