Auto Stocks Outlook for the week – 26 to 30.09.2016
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Seen range bound; bias remains positive overall Stocks of major automobile companies are seen trading in a narrow range next week, with some possibility of a correction, as most of the stocks have performed well and are in the "overbought" category. However, bias for the consumer discretionary sector remains positive. Payout of arrears after the salary hike of government employees and good monsoon rains are seen lifting demand during Sep-Oct. Earlier this month, the Society of Indian Automobiles Manufactures revised upward its projection for growth in sales of passenger vehicles in 2016-17 (Apr-Mar) to double digit, from 7-8% seen at the beginning of the year. The CNX Auto index, which ended higher by 1.06% on week at 10224.95 points yesterday, is seen trading sideways in line with broader indices over the next few sessions. Stocks of Maruti Suzuki India Ltd has been trading in the "overbought" zone in the last few weeks and analysts see some correction in the stock going forward. For the longer term, however, the stock remains positive, backed by strong fundamentals and a good order book. Analysts are also bullish on Tata Motors Ltd in the long term but expect some pullback in the stock. Two-wheeler companies are seen consolidating at current levels with stocks like Bajaj Auto Ltd, Hero Motocorp Ltd entering into overbought zone. Analysts expect some pullback in Hero Motocorp Ltd. Shares of Bajaj Auto Ltd and Mahindra & Mahindra Ltd are seen trading in a narrow range next week.
Seen range bound; bias remains positive overall
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Seen range bound; bias remains positive overall Stocks of major automobile companies are seen trading in a narrow range next week, with some possibility of a correction, as most of the stocks have performed well and are in the "overbought" category. However, bias for the consumer discretionary sector remains positive. Payout of arrears after the salary hike of government employees and good monsoon rains are seen lifting demand during Sep-Oct. Earlier this month, the Society of Indian Automobiles Manufactures revised upward its projection for growth in sales of passenger vehicles in 2016-17 (Apr-Mar) to double digit, from 7-8% seen at the beginning of the year. The CNX Auto index, which ended higher by 1.06% on week at 10224.95 points yesterday, is seen trading sideways in line with broader indices over the next few sessions. Stocks of Maruti Suzuki India Ltd has been trading in the "overbought" zone in the last few weeks and analysts see some correction in the stock going forward. For the longer term, however, the stock remains positive, backed by strong fundamentals and a good order book. Analysts are also bullish on Tata Motors Ltd in the long term but expect some pullback in the stock. Two-wheeler companies are seen consolidating at current levels with stocks like Bajaj Auto Ltd, Hero Motocorp Ltd entering into overbought zone. Analysts expect some pullback in Hero Motocorp Ltd. Shares of Bajaj Auto Ltd and Mahindra & Mahindra Ltd are seen trading in a narrow range next week.
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