Business Daily from THE HINDU group of publications
Wednesday, Oct 31, 2007
ePaper | Mobile/PDA Version
Business Daily from THE HINDU group of publications Wednesday, Oct 31, 2007 ePaper | Mobile/PDA Version |
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Automobiles Money & Banking - CRR & Bank Rates Markets - Stocks
Our Bureau
Mumbai, Oct 30 The auto sector was the worst hit with a three per cent decline in index value among the sectoral indices at the BSE in the wake of a hike in cash deposits that banks have to keep with the RBI. The BSE Auto Index was down 176.54 points at 5,479.89. Falling sharesAnalysts say that with the tightening of liquidity from a hike in the CRR, the interest rates of loans will increase and the worst hit would be the auto sector. “There has been a decline in the demand of two- and four-wheelers in the country, so with this hike we can see a further decline in the demand,” said Mr C.A. Prashant Bhansali, Director, Mehta Equities Ltd. Other market watchers too agree with him. Maruti Suzuki was hit the hardest with its shares falling by 8.46 per cent. Following it was Mahindra & Mahindra falling 7 per cent. Tata Motors too was down by 4.93 per cent. Analysts are waiting for some kind of a positive announcement from the US on Fed rates in the coming days. “If the rates they announce either stay where they are or are lower, then it will be sort of a consolation for the auto sector, otherwise it will only further worsen the situation,” said a research analyst tracking auto stocks. Even when the BSE Sensex, BSE-500, BSE Midcap and BSE Smallcap indices have been soaring, the BSE Auto Index was underperforming. During the last one week, it registered a meagre return of 0.50 per cent while month-on-month, the return was 2.77 per cent. On the other hand, the Sensex gained about 7 per cent in the last one week and scored an impressive 14.5 per cent month-on-month. The comparative figure for BSE-500 index is 7.66 per cent and 14.2 per cent respectively. More Stories on : Automobiles | CRR & Bank Rates | Stocks
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