SENSEX NIFTY
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.

ADS BY GOOGLE

video of the day

Rupee weakness modest, see yields at 7.60% in Q1: Deutsche

Explore Moneycontrol

Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.