Auto, FMCG stocks extended rally on Tuesday afternoon, after the Narendra Modi-led government's reform push came as a shot in the arm for the ailing sectors.
Auto, FMCG stocks extended rally on Tuesday afternoon, after the Narendra Modi-led government’s reform push came as a shot in the arm for the ailing sectors. The Nifty auto index surged more than 2% to hit the day’s high at 7,185. Tata Motors (10.4%), Ashok Leyland (5.4%), Apollo Tyres (3.4%), Eicher Motors (3.2%), Exide (2.3%), Bosch (1.9%) were the biggest gainers in the index. Notably, Tata Motors emerged as the biggest Sensex gainer too, gaining more than 10% to Rs 121.40 on BSE. In the Nifty FMCG index, Britannia (6.3%), Marico (2.6%), Emami (2.3%) and Jubilant Foodworks (1.9%) were the biggest gainers. The Nifty FMCG index gained more than 0.6% to 29,080.
Britannia Industries shares gained most in 3 years, surging more than 8% to hit the day’s high at Rs 2,724.30. The stock markets have been on a recovery mode after FM Nirlmala Sitharaman gave a reform push to calm the dampening investor sentiment. In a bid to tackle the ongoing slowdown in the auto sector, the banks have been asked by the government to make home and auto loans cheaper. Further, all GST pending refund of MSMEs will be paid within 30 days and refunds in the future will be processed in 60 days. Among other things, the government also released the Rs 70,000 crore of funds as upfront infusion into public sector banks.
Taking stock of these measures, Motilal Oswal said that FM’s announcements to boost growth will serve well to improve sentiments. “Timing- wise, it has come just ahead of the beginning of a long festival season and may boost consumer sentiment. Expectations of more measures over the next two weeks will likely drive a short-term bounce after the sharp correction post budget,” the firm noted in its report. Corporate Banks, NBFCs (mainly HFCs, vehicle financiers) and Autos are the key beneficiaries of the measures unveiled, said the firm in its report.