Shares of most automobile companies in India surged on Tuesday on expectations that the pro-business Bharatiya Janata Party will emerge victorious when national election results are announced Friday.
Maruti Suzuki India Ltd.532500.BY +1.97%, Mahindra & Mahindra Ltd.500520.BY +1.40%, Tata Motors Ltd.500570.BY +0.81%, Ashok Leyland Ltd.500477.BY +1.19% and Hero MotoCorp Ltd.500182.BY +3.17% were trading around their 52-week highs when markets closed Tuesday evening.
“This (share-buying) is mainly sentiment-driven,” said an analyst at a Mumbai-based brokerage, who did not wish to be named. He expected auto shares to trade even higher if a BJP-led government with a clear majority were to emerge the winners of India’s federal election.
The analyst said investors are hoping that a government led by BJP’s Prime Ministerial candidate Narendra Modi would take strong steps to revive economic growth, increase foreign investment, and boost industrial growth, which would in turn improve market sentiment and demand for new vehicles in India, the world’s sixth-largest car producing market.
via India Poll Prospects Drive Auto Shares – India Real Time – WSJ.
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