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Share market update: Auto shares slip on weak auto sales numbers

The Nifty Auto index was trading 1.23 per cent down at 6922.95 around 09:47 am.

ETMarkets.com|
Updated: Sep 03, 2019, 09.52 AM IST
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Benchmark NSE Nifty50 index was down 126.90 points at 10,896.35.
NEW DELHI: Auto shares were trading in the red in Tuesday's morning session after major auto companies reported dismal sales for August, thanks to depressed consumer sentiment amid higher cost of ownership.

Analysts said enhanced safety and emission norms and increased insurance cost have hurt buyers’ enthusiasm. While there are expectations of government sops in the days to come, analysts do not see any drastic improvement in volumes anytime soon.

In the fourwheeler space, demand for small cars took the biggest hit in August. In the case of Maruti, while total volumes dropped 35.9 per cent in August, slightly above analysts’ estimate of 3033 per cent, demand for Alto and old WagonR dropped 71.8 per cent.

“Consumer sentiment is depressed, but one must note that a lot of vehicles were sold in 20152017, which were the result of the replacement demand that generally happens in 56 years. After three years of strong sales, you can’t expect 2019 or 2020 to play out well. If the forthcoming festive season fails to boost demand, inventories may shoot up drastically and we may see a second leg of discounts in November and December. I am unsure how deep that can go,” said Sameer Kalra of Target Investing.

The Nifty Auto index was trading 1.23 per cent down at 6922.95 around 09:47 am.

Shares of Tata Motors (down 3.83 per cent), Amara Raja Batteries (down 2.79 per cent) , Bosch (down 2.74 per cent) and Eicher Motors (down 2.50 per cent) were trading lower.

Motherson Sumi Systems (down 2.30 per cent) , Ashok Leyland (down 2.09 per cent) , Mahindra & Mahindra (down 1.95 per cent) and Exide Industries (down 1.37 per cent) were the top losers in the index.

Benchmark NSE Nifty50 index was down 126.90 points at 10,896.35 while the BSE Sensex was down 409.55 points at 36,923.24.

Among the 50 stocks in the Nifty index, 8 were trading in the green, while 41 were in the red.

Shares of YES Bank, PNB, Vodafone Idea, Tata Motors, Bank of Baroda, Union Bank India, SAIL, SBI, Ashok Leyland and ICICI Bank were among the most traded securities on the NSE.

Also Read

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2019 witnesses worst-ever decline in auto sales: SIAM

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M&M posts 1% rise in auto sales in December

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