Equity Alert: Most auto shrs dn on worries over auto loan rate hike
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K.Karthik Raja
Jun 12, 2008, 1:58:55 AM6/12/08
to Kences1
Equity Alert: Most auto shrs dn on worries over auto loan rate hike
MUMBAI--11:15AM--Shares of most automobile manufacturers were down
1-4% on worries banks would increase auto loan rates after RBI hiked
the repo rate--the rate at which it lends to banks--25 basis points to
8% Wednesday.
Bajaj Auto was down 2% at 518 rupees, Hero Honda Motors dropped 4%
to 780 rupees, Maruti Suzuki India declined 3% to 714 rupees, and
Mahindra & Mahindra, fell 1% to 575 rupees.
However, Tata Motors recouped losses and was up marginally at 505
rupees
as investors bought the stock after a three-session weakness.
Most analysts are of the view that the RBI rate hike was long
expected by investors and also recently hinted at by the RBI governor.
We may see some hike in auto loan rates. Commercial vehicles and two-
wheelers are likely to be most affected. But, growth in passenger cars
would continue
Parag expects the CV industry to grow 5-7%, passenger cars 12-15%,
and two-wheelers around 6% in 2008-09 (Apr-Mar).
We anticipate weak trend in auto shares for at least the next
three
months as customers will postpone purchases till the end of the
monsoon.
Hero Honda is seen finding support at 770 rupees, Maruti at 708
rupees, M&M at 569 rupees, while resistance for Tata Motors is seen at
510 rupees.
MUMBAI--11:15AM--Shares of most automobile manufacturers were down
1-4% on worries banks would increase auto loan rates after RBI hiked
the repo rate--the rate at which it lends to banks--25 basis points to
8% Wednesday.
Bajaj Auto was down 2% at 518 rupees, Hero Honda Motors dropped 4%
to 780 rupees, Maruti Suzuki India declined 3% to 714 rupees, and
Mahindra & Mahindra, fell 1% to 575 rupees.
However, Tata Motors recouped losses and was up marginally at 505
rupees
as investors bought the stock after a three-session weakness.
Most analysts are of the view that the RBI rate hike was long
expected by investors and also recently hinted at by the RBI governor.
We may see some hike in auto loan rates. Commercial vehicles and two-
wheelers are likely to be most affected. But, growth in passenger cars
would continue
Parag expects the CV industry to grow 5-7%, passenger cars 12-15%,
and two-wheelers around 6% in 2008-09 (Apr-Mar).
We anticipate weak trend in auto shares for at least the next
three
months as customers will postpone purchases till the end of the
monsoon.
Hero Honda is seen finding support at 770 rupees, Maruti at 708
rupees, M&M at 569 rupees, while resistance for Tata Motors is seen at
510 rupees.
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