Stock Market

Auto gloom to continue, but the index holds hope

   Download Android App    Share in      FullScreen   CheckVideos

ET Intelligence Group: Car sales growth in India has shrunk the most this millennium and it’s no surprise the index representing the country’s listed vehicle-makers is mirroring that shrinkage. The Nifty Auto Index now trades at a price-to-book multiple of 2.26, the lowest in the decade, Bloomberg data showed.

The bloodbath hasn’t spared any pocket of the auto-mart.

Sales of trucks, buses, cars, bikes, scooters and threewheelers have drastically fallen, prompting all constituents of the Nifty Auto Index to deliver negative returns. The jury is still out whether India’s auto industry faces a structural or cyclical downturn, or a combination of both indicating that the pain wouldn’t go away soon for an industry that ranks among the top employers in the manufacturing sector.

But technical statistics do hold out some hope – at least for the August series. Since 2012, the Nifty Auto Index had negative returns for three consecutive months on just four occasions in the 94 months under review.

The index staged a sharp recovery after that.

The average return in the fourth month on these four occasions was 9.7 per cent.

The highest return in the fourth month was 14 per cent – between December 2015 and February 2016.

The tiniest of the rebounds returned 7 per cent– between June 2013 and August 2013. The Nifty Auto Index in August so far delivered returns of 1 per cent. Neeraj Agarwal, vice president at IDFC Securities, said that the Auto Index in August has been consolidating in the range of 6,725-6,975 levels and facing strong resistance along its 8-day Exponential Moving Average, currently at 6,935. “We anticipate a breakout of the consolidation range and sustenance above its 8-day EMA levels in the near term and expect the index to move toward 7,500 in the current month,” Agarwal said.




Unlimited Portal Access + Monthly Magazine - 12 issues-Publication from Jan 2021

Buy Our Merchandise (Peace Series)

 

Contribute US to Start Broadcasting


It's Voluntary! Take care of your Family, Friends and People around You First and later think about us. Its Fine if you dont wish to contribute and if you wish to contribute then think about the Homeless first and Feed them. We can survive with your wishes too :-). You can Buy our Merchandise too which are of the finest quality.

Debit/Credit/UPI

UPI/Debit/Credit

Paytm

STRIPE

Details
Category: Stock Market


21