January Auto Sales, Global Stock Market Drivers, and Top Cues in Focus Today

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On Monday, Indian share markets traded on a volatile note throughout the day and ended higher. Benchmark indices fluctuated between gains and losses, a day after slumping to their lowest levels in three months following Budget 2020-21 announcements.

The BSE Sensex closed higher by 137 points to end the day at 39,872. Nestle and Asian Paints were among the top gainers.

While the broader NSE Nifty ended up by 62 points to end at 11,724.

Among BSE sectoral indices, realty stocks gained the most, followed by automobile stocks and power stocks.

Speaking of the current stock market scenario, while everyone out there is buzzing about the Union Budget and what it has in store for the stock markets, our analysts at Equitymaster are singing a different tune.

They are encouraging readers to look beyond the short-term blip that the Budget will bring and focus on the long-term trend that will rule the market.

Here's what Rahul Shah wrote about it in a recent edition of The 5 Minute WrapUp...

• All said and done, the fact of the matter is that the economy is indeed struggling.
  
  And it will be some time before a full-fledged recovery is achieved.
  
  However, is the situation so bad that it deserved a close to 1,000 point correction on the Sensex?
  
  Well, I don't think so.
  
  It is not as if the economic growth will fall dramatically from here. Yes, certain big bang measures in the budget would have led to a faster recovery perhaps. But ours is a long term story with certain hiccups along the way like we are witnessing right now.
  
  And that means pouncing on any adverse reaction from the market like the present one.

As per him, a meaningful fall in the market is an opportunity to buy the long term India story at a marked down price. And it should be seen as a boon and not a bane.

Already, the broader market valuation is looking a lot more attractive than it did a few weeks back.

Some more knee jerk reaction by the stock market and it could turn out to be one the biggest buying opportunities in years.

Also, the smallcap index is rebounding. As per our smallcap analyst Richa Agrawal, you can find a lot of great buying opportunities in the smallcap space and this is a great time to be invested in smallcaps.

However, she also points out that not everything you touch will turn into gold. You should be very careful and selective in picking the most solid and promising smallcap stocks.

Top Stocks in Action Today

HCL Technologies share price will be in focus today as the company has declared establishment of its global delivery center in Colombo, signing an agreement with the Board of Investment (BOI) of Sri Lanka.

Maruti Suzuki share price will also be in focus today as the company has partnered with four new startups to promote innovation in India for automobile and mobility space. The shortlisted startups include Dave.AI, Rezo.AI, Fabrik, and ElectreeFi.

Market participants will also track Avanti Feeds share price, Bharti Airtel share price, and CSB Bank share price as these companies are scheduled to announce their December quarter (Q3FY20) results later today.

You can also read our recently released Q3FY20 results of ITC, Power Grid, Amara Raja Batteries, Vedanta, SBI, HUL, Dabur.

January Automobile Sales

Low consumer sentiment continued to affect sales of major Indian automobile manufacturers in January. Maruti Suzuki reported that sales, which included exports and off-take by other OEMs, grew by just 1.6% to 154,123 vehicle in January against 151,721 during the year-ago month.

Similarly, the company's domestic sales increased by 1.7% year-on-year (YoY) to 144,499 units.

Maruti's exports inched up by 0.6% to 9,624 vehicles against 9,571 shipped out during the year-ago month.

Tata Motors' overall sales, including exports in January declined to 47,862 vehicles against 58,185 units sold in the same month of 2019. Its domestic sales fell by 18% to 45,242 vehicles compared with 54,915 units in January 2019.

Commercial vehicles' sales in January fell by 16% to 33,860 units from 40,175. Similarly, passenger vehicle sales declined by 22% to 13,894 units from 17,826 shipped during January 2019.

Mahindra and Mahindra (M&M) reported a 6% fall in January sales to 52,546 vehicles against 55,722 sold in year-ago month. Its domestic sales slipped 3% to 50,785 units against 52,500 sold in January 2019.

TVS Motors registered sales of 2,34,920 units in January 2020 as against sales of 2,82,630 units in the month of January 2019.

Meanwhile, Ashok Leyland reported a fall of 40% in January 2020 sales (Domestic + Exports) to 11,850 units, as against 19,741 units sold in the same month of last year.

The company reported a decline of 47% in its medium and heavy commercial vehicle (M&HCV) products segment to 7,754 units in January 2020, as compared to 14,694 units sold in January 2019.

Eicher Motors' motorcycle division reported 13% decline in sales at 63,520 units in January 2020 as compared to 72,701 motorcycles sold in January 2019. Export of motorcycles increased to 2,228 units from 1,829 units in January 2019.

Global Stock Market Updates

Investors erased US$ 393 billion from China's benchmark stock index on Monday as fears about the spreading coronavirus and its economic impact drove selling on the first day of trade in China since the Lunar New Year.

The Shanghai Composite closed down 7.7% at 2,746.6, its lowest since August and a modest recovery from early trade, when it was down nearly 9%.

The Chinese yuan blew past the 7-per-dollar mark and Shanghai-traded commodities from palm oil to copper hit their maximum down limits.

Meanwhile, crude oil prices fell to their lowest in more than a year, dragged down by worries about lower demand in top crude importer China.

Iranian Oil Minister Bijan Zanganeh said the spread of the coronavirus had hit oil demand and called for an effort to stabilise oil prices.

He said Iran would agree to holding earlier OPEC meeting if the rest of the group's members agreed to oil production cuts. OPEC and its allies, a group known as OPEC+, are considering meeting in February instead of March.

As per the economic schedule released by Vijay Bhambwani, editor of Weekly Cash Alerts, here are the important events due later today:

• US - Factory Orders December
• UK - Construction PMI January
• Australia - Interest Rate Decision

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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