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Reasons Behind Market Crash

The domestic equity market came under the bear grip today posting its biggest single day percentage fall in over four months as equity market the world over succumbed to selling pressure on fears of further economic slowdown in China.

 Sentiment was hit badly after the December PMI (manufacturing, purchasing managers’ index) showed a reading of 48.2 down from 48.6 in Nov which dragged the Shanghai and Shenzhen stock markets to hit lower circuit. Trading was halted for the day.

Further, geopolitical tensions in the Middle East also dampened sentiment.

                     DEC AUTO SALES NUMBERS REPORT

Auto stocks turned volatile after the companies posted a mixed set of sales data for December. Gains in select stocks like were offset by selling in heavyweights such as Tata Motors and Maruti Suzuki.

  1. 1.     Eicher Motors:

Eicher Motors Reported robust December sales figure, 41 percent jump in two wheeler sales, stood at 40453 units which includes exports of 416 units.

Sales of Engine capacity up to 350cc surged 49 percent to 37,475 units against 25092 units compared on a yearly basis.

However, sales of engine capacity exceeding 350cc tanks by 16 percent, which stood at 2978 units compared with 3542 units compared on Y-o-Y basis.

FROM TECHNICAL FRONT:

Eicher Motors gains on the back of strong sales figure, stock had given breakouts of channel pattern and able to trade above it, which shows buying strength in the stock. 18190 is next resistance for stock while 17050 will act as support.

  1. 2.     Tata Motors:

India’s automobile major Tata Motors have posted a 4 percent decline in sales of 39973 units for Dec 15 compared to 41734 units in the corresponding month for the year 2014.

Domestic sales of commercial and passenger vehicles fall by 6 percent at 35416 units against 37776 units sold in the same month last year.

Meanwhile, December 2015 sales of passenger vehicles in the Indian market tanks 33 percent, which stood at 8069 units from 12040 units in the same month last year.

FROM TECHNICAL FRONT:

Shares of Tata Motor tanks as reported below than expected sales number, stock is currently trading near its support, i.e. of 373 and breakouts could be seen in the next trading session as well as trend line breakouts in stock supports more selling pressure in stock. 407 is immediate resistance for the stock.

  1. 3.     M&M:
  • Despite reported a modest 4 per cent increase in December sales, stock tanks 2 percent today, sales stood at 37915 units from 36328 units in the year ago month.
  • Overall domestic sales up by 1 percent and stood at 34839 against 34460 units in December 2014.
  • However, Exports of the company were up 65 percent at 3076 units.

FROM TECHNICAL FRONT:

Shares of M&M tanks and trading near its support, for short term stock may remain under pressure, 1235 is immediate support if it will able to give breakouts and sustain below its more selling pressure could seen. 1284 will act as a resistance for the stock.

  1. 4.     Maruti:
  • Maruti Suzuki December sales up 13.9 percent at 971958 units from 853532 units compared for the same month last year.
  • Exports for the month tanks and stood at 7816 units against 11682 during the corresponding period last year.
  • Overall, the company sold 1119149 units up 8.5 percent from 109791 units in December 2014.

FROM TECHNICAL FRONT:

Maruti shares tanks and closed near around its immediate support, i.e. of 4563. Hence, it’s expected to give negative Breakouts. For now 4702 will act as immediate resistance.

  1. 5.     Ashok Leyland:
  • Ashok Leyland posted a growth of 31 percent in December sales sold 12209 units in December 15 compared to 9290 units in the same month last year.
  • MHCV (Medium and Heavy Commercial Vehicles) segment of posting a growth of 35 percent at 9758 units.
  • The growth in the LCV (Light Commercial Vehicle) was up by 18 percent to 2451 units.

FROM TECHNICAL FRONT:

Ashokley shares had given breakouts of its important resistance and closed above it. As well as the stock is trading above the 100 DMA, indicates buying from current level. 87 is the nearby support  level for stock.

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