Auto Stocks Nosedive As Budget Denies Relief; Maruti Suzuki, Hero MotoCorp Lead Declines
Maruti Suzuki shares fell over 6% to breach the Rs 6,000 mark for the first time since 30 March 2017, Hero MotoCorp shares also dived over 6% , and Tata Motors also declined 4%.
Auto stocks had a rough ride on Monday, i.e. 8 July, after Union Budget 2019 failed to provide any positive impetus to the ailing Indian auto sector. The BSE Auto index was down 3.3% in afternoon trade, with Maruti Suzuki India Ltd and hero MotoCorp Ltd being the biggest losers.
Maruti Suzuki shares fell over 6% to breach the Rs 6,000 mark for the first time since 30 March 2017 after the company informed bourses that it has cut vehicle production for the fifth consecutive month in June. The company said it slashed total vehicle production, including that of Super Carry LCV, by 15.6% last month to 111,917 units compared with 132,616 units in the year-ago month. Maruti had cut total production by over 18% in May and by around 10% in April.
Hero Moto Corp shares also dived over 6% to hit lowest levels in almost four years. The stock was trading at Rs 2,367, down 5.83%, at 2:25 pm on BSE.
Tata Motors also declined 4% to Rs 153.85 after the company informed that it will announce June quarter earnings on 25 July.
Among other auto stocks, Motherson Sumi Systems was down 4.7%, Apollo Tyres and TVS Motor dropped 4% each, Eicher Motor declined 3%, while Bajaj Auto slipped 2.5%.
Analysts at Prabhudas Lilladher, in their post-budget report, said: “We have turned underweight in automobiles and have removed Ashok Leyland from model portfolio. We are now equal weight on M&M (Mahindra and Mahindra Ltd) due to likely pressure on tractors, limited success of new SUV launches and higher exposure to diesel than other players.”
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