Moneycontrol
May 23, 2012 03:18 PM IST | Source: Reuters

Auto stocks hit by fuel price hike talk

The auto index falls 1.1% on speculation the government could raise fuel prices, adding to worries about a sector facing uncertainty about future sales and rising raw material costs because of the falling rupee.


The auto index falls 1.1% on speculation the government could raise fuel prices, adding to worries about a sector facing uncertainty about future sales and rising raw material costs because of the falling rupee.


"Auto shares are falling on back of a likely increase in fuel price following the sharp depreciation in rupee, muted volume growth guided by the industry for FY13 and little respite from raw material cost due to currency volatility," an analyst says.


Traders say a long-debated fuel price hike could help ease investor concerns about the government's finances, given it would reduce the cost of subsidies.


Maruti Suzuki falls 1.8%, Tata Motors loses 1.6%, while two wheeler Bajaj Auto declines 1.6%.

The auto sub-index has dropped 12.5% this month as of Tuesday's close compared to 7.4% fall in 50-share NSE index.

Sections
Follow us on
Available On