Auto stocks gear up; Nifty Auto up 2.3 %

Auto and auto ancillary stocks were the flavour of the day as all the major listed stocks were trading with smart gains on Tuesday, November 29, 2016. Auto Index has corrected by close to 14 per cent from its close on November 8.

Auto and component makers have been the hardest hit post the demonetisation move by the government as most of the auto sales in the country take place on a cash basis.

Due to demonetisation the sector is facing the heat post a good festive season in which both the two and four-wheeler saw record sales numbers, which was also aided by strong rural demand.

On the day currency demonetisation move was announced, Nifty Auto Index closed at 10079; and thereafter over the next two weeks it touched a low of 8681 on November 21 representing a 14 per cent drop from its highs.

Since then the index has managed to gain a bit as it currently trades at 9021, recovering close to 4 per cent from its recent lows but still down more than 10 per cent.

Sensing cheaper valuations, the stocks have seen delivery based buying at lower levels giving a temporary relief to auto and ancillary majors.

Biggest gainers: -

Eicher Motors- 4.5 %

Ashok Leyland- 3.7 %

Maruti Suzuki- 3.6 %

M&M- 2.6 %

MRF- 2.3 %