After opening the day in green, share markets in India have traded on a volatile note and are presently trading below the dotted line. Sectoral indices are trading mixed with stocks in the FMCG sector and stocks in the consumer durables sector trading in red. While stocks in the banking sector are trading in green.
The BSE Sensex is down by 45 points (down 0.1%) and the NSE Nifty is trading down by 17 points (down 0.2%). Meanwhile, the BSE Mid Cap index is trading up by 0.2%, while the BSE Small Cap index is trading up by 0.1%. The rupee is trading at 72.28 to the US$.
In news from stocks in the auto sector. Domestic passenger vehicle sales for August witnessed a drop as sales fell due to ongoing floods in various parts of the country.
Domestic passenger vehicle sales were down by 2.3% in August as compared to the same period a year ago.
Car sales were down 1% 196,000 units in August, while two-wheeler sales grew by almost 3%. Motorcycle sales were up by 6.2% on the back of a positive monsoon for most parts of India.
Commercial vehicles too, outperformed as sales jumped by 30% in August as compared to the same period a year ago.
Going forward however, it will be interesting to see if vehicle sales are able to continue the robust growth rate, considering growing crude prices, which ultimately affect buyer decision.
Auto Volumes are a Good Indicator of Economic Growth
Auto sales are one of the major indicators for growth in the Indian economy.
For the first nine months of FY18 at least, the auto industry has done well to grow in double digits after some lean years.
Vehicle sales grew by 11.3% YoY during this period. The best performing of the lot were commercial vehicles (CVs), volumes of which grew by 15% YoY. Two-wheelers also did well growing by around 12% YoY.
In fact, in a recent conference call, the management of the largest two-wheeler company in the country – Hero Motocorp – said they expect the two-wheeler industry to grow in double digits in FY19 as well.
