Shares of auto companies saw selling pressure on Monday with index heavyweights Maruti Suzuki India, Hero MotoCorp, Baja Auto, Ashok Leyland, and Apollo Tyres hitting their respective 52-week lows due to subdued demand, disappointing quarterly results along with regulatory and policy uncertainties.
Continuing its losing momentum, the auto index closed on a bearish note with 3.55% and 3.34% decline on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), respectively.
Nifty Auto closed 255 points down at 6905 level today, against the previous closing of 7,161.50. Moreover, Nifty Auto index has fallen to its 52-week low of 6,896.25 level after all 15 stocks in the index declined in today's trading session. It trades below its 30, 50, 150 and 200 days Moving Average.
The auto industry is already grappling with regulatory and policy uncertainties and further changes in policies added with deficient demand have led to an overall slump in the industry relative stocks.
The government has proposed to increase the registration fees for new vehicles across all types. This proposed tax hike is being seen as the government's intent to promote electric vehicles (EVs), which threatened the traditional sector.
However, in a big boost to electric vehicles in the country, the Goods and Services Tax (GST) Council on Saturday decided to slash the duty on all-electric vehicles from 12 to 5% as also on electric chargers for vehicles from 18 to 5%. Further, GST has been exempted for the hiring of electric buses by local authorities.
The auto stocks on Monday saw selling pressure from the word go. Shares of Tata Motors registered intra-day fall of 6.35%, followed by 6.28% in Apollo Tyres, 5.15% in TVS Motors, 4.94% in Bajaj-Auto, 4.82% in Motherson Sumi Systems, 4.75% in Eicher Motors, 4.49% decline in Maruti Suzuki stock, 3.57% fall in Ashok Leyland.
M&M and Hero MotoCorp fell over 2% and stock prices of Bosch, Bharat Forge, Exide industries and MRF fell around 1%, while Amara Raja Batteries declined 0.15% by the end of the trading session.
Among the sectoral heavyweights, Hero MotoCorp, Ashok Leyland, Maruti Suzuki, Motherson Sumi, Exide Industries, TVS Motors, Apollo Tyres, Bajaj Auto and Tata Motors touched their respective 52-week low.
Since the beginning of 2019, most auto stocks have underperformed the Nifty50. As compared to around 4% rise in the Nifty50, Nifty Auto index, that gauges the performance of leading listed auto companies at the bourses, has fallen around 25% year-to-date, with the highest fall registered in stocks namely Eicher Motors, Maruti Suzuki, MRF, Bosch, Bajaj Auto.
Edited by Rupa Burman Roy