Auto Stocks Gain On Better Chip Supply Outlook

The Nifty Auto Index hits its 52-week high as chip supply is seen to improve.

Of the 15 constituents in the index, 13 gained in the afternoon trade on Friday, according to Bloomberg data.

The rally came as Taiwan Semiconductor Manufacturing Co. raised its revenue forecast for 2022. The world’s largest contract chipmaker, according to a Bloomberg report, is projecting sales growth in the mid-30% range, up from about 30% previously. Its earnings also surpassed analysts’ estimates in the quarter ended June.

Besides, Nomura, in a report on Wednesday, said Maruti Suzuki India Ltd., Hero MotoCorp Ltd. and Eicher Motors Ltd. are likely to post “positive surprises” in Q1. It prefers Mahindra & Mahindra Ltd., Tata Motors Ltd., Ashok Leyland Ltd., Bharat Forge Ltd., Sona BLW Precision Forgings Ltd, CarTrade.

July, according to Nomura, could be the best month for domestic passenger vehicle wholesales as chip supply improves.

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