Tata Motors Down 4.38%; Nifty Auto Ends in Red

Shares of Tata Motors declined by 4.38% to ₹840 in today’s trading session. While Sensex jumped by 0.44% at 80,353.68, Nifty rose to 24,448.

On the technical aspects, the stock traded below the short term simple moving averages of 5, 10, 20 days, while it stood at the longer term moving averages of 50, 100 & 300 days.

At around 11 AM, the shares of Tata Motors traded on NSE and BSE were 85.29% higher than the previous trading session. Though positive high price movement with high volume projects a sustainable uptick, negative price movement in the same scenario can be an indication of further decline in share prices.

Why did the stock fall?

It’s being reported that sales amid Diwali may fall short of expectations. As per the reports, increasing cost of living and surging food inflation are eroding the purchasing power of middle-class consumers.

A slowdown in consumer spending was also reported in the sales of Fast-Moving Consumer Goods (FMCG), while Quick Service Restaurant (QSR) companies reiterated a sluggish quarter.

Though expectations during the Diwali season remain at an elevated level, the estimations may not materialise on account of muted trends.

Estimates by Federation of Automobile Dealers Associations (FADA) said that auto dealers are reporting historically high inventory levels. The average ranges between 80 to 85 days, which equals to 790,000 vehicles valued at ₹79,000 crore

Notably, Nifty auto index traded in red as the stocks declined between 1% to 6%.