Auto stocks step on the gas

On a day when the benchmark Sensex gained 103 points to settle at 8,638, automobile stocks caught attention as they hit the expressway. That along with the gains in information technology, fast moving consumer goods and stocks of leading state and private banks, contributed to the market rally.

The S&P CNX Nifty rose 35.8 points to settle at 2,608.6. Wednesday's rally was also stock-specific. For instance, Mahindra & Mahindra (M&M) rose 3.9 per cent to a high of Rs 430. The stock went up by seven per cent over the week. The company is now better placed in the tractor segment. Moreover, there are good expectations about the initial public offer of MBT.

Commercial vehicle (CV) major, Ashok Leyland stock declined marginally by 0.16 per cent during the day to Rs 31, but over the week it has gained by five per cent. The company posted good numbers and analysts say that its realisations are improving with growth coming from LCVs and big three-axle trailors.

Even as the CV industry has posted a growth of 16-17 per cent in the first half, Ashok Leyland saw a growth of 25 per cent. Tata Motors surged 2.5 per cent to Rs 551, while the weekly growth was six per cent.

Passenger car major, Maruti Udyog surged by 3.2 per cent to Rs 598, even as it has seen a three per cent growth over the week. Market observers feel that the upcoming diesel car from the company is a major trigger. That way it will compete better with Tata Indica.

Moreover, auto stocks also surged on back of reports that the government may cut excise duty on cars to 16 per cent from the current 24 per cent, as a part of the auto policy being worked out.

Two-wheeler major, Bajaj Auto is getting better positioned against rival Hero Honda, according to analysts. Its 125 cc vehicle is doing particularly well.

The stock of Bajaj Auto went up by 0.7 per cent to Rs 2,065, while over the week it went up by nine per cent. Hero Honda surged one per cent to Rs 842, while the weekly growth was 6.5 per cent.

Overall the market was volatile, with the Sensex moving in the range of 8,537.5 to 8,649.7. Positive news from some major companies and short covering ahead of Thursday's expiry of November 05 derivatives, led to the rally.