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Stock market today: On account of fresh buying in auto stocks, especially M&M, Tata Motors, Hero Motocorp and Maruti Suzuki shares, Nifty auto index has surged near to its life-time high of 12,660 levels. Compared to key benchmark indices of Indian stock market, Nifty auto has generated alpha return in last one month as both Sensex and Nifty could deliver around 5.50 per cent return in this period whereas Nifty auto index delivered more than 14 per cent return in this period.

According to stock market experts, Nifty auto index has strong support at 12,100 and in next fortnight, it may go up to 13,000 levels. They said that Indian economy opening up after the pandemic, Indian auto companies focus on the EV segment and current geopolitical setup is favourable for the Indian auto industry and the Dalal Street is just recognising these favourable triggers. They said that one can buy Tata Motors, M&M, Maruti Suzuki and Hero Motocorp shares at any dip and hold it for medium to long term for stellar returns.

Why auto stocks are skyrocketing?

Speaking on the reason for Nifty auto index climbing neat to its life-time high, Sandeep Pandey, Director at Basav Capital Advisor said, "Auto stocks are rising because of the Indian economy is opening up post-Covid and it is having its impact on the lifestyle of the Indian millennials. This is getting reflected in recent spike in auto sales numbers. Second thing is Indian auto company's focus on EV segment. This is attracting attention of the foreign investor as M&M and Tata Motors have received FII investment for their EV segment."

The former Deputy Vice President of the HDFC Bank went on to add that current geopolitical setup is making a conducive milieu for Indian auto sector. He said that post-Covid, investors are shy of investing in China and due to the outbreak of Russia-Ukraine war, they are not in mood to move to Russia as well. So, in such condition, India being a developing economy India suits to such investors as it is providing a big market with more favourable business environment because India enjoys healthy diplomatic and trade relations with the global community.

Nifty auto index technical outlook

On what chart pattern indicates in regard to Nifty auto index, Mudit Goel, Senior Research Analyst at SMC Global Securities said, "Nifty auto index is surging due to sharp upside in auto majors like Maruti Suzuki, Mahindra & Mahindra (M&M), Hero Motocorp, Tata Motors, etc. Currently, Nifty auto index is placed at strong support of 12,100 and it may go up to 13,000 levels in next fortnight."

Auto stocks to buy today

Asked about the auto stocks that one can buy and hold, Mudit Goel of SMC Global said that one should wait for some profit-taking in the auto majors mentioned above and then they can buy these auto stock for medium to long term time horizon.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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