Auto Stock Falls 6% as European Currencies Nosedive!

Almost every stock in today’s session is trading down with most of them witnessing a severe sell-off. The benchmark index tanked 1.78% to 17,018 by 10:50 AM IST with all sectoral indices trading with a deep cut. No sector has been spared as panic over a global recession is gradually kicking in. 

The index is one of the top losers, trading 3.84% lower at 12,584. The top loser in the index is Tata Motors (NS:), the shares of which are down 6.56% and holds a weightage of roughly around 12.2% in the index. The company has a market capitalization of INR 1,50,981 crores and is one of the most prominent players in the EV space in India.

The company has been reeling under losses for the last several years and clocked a net loss of INR 11,441.47 crores in FY22, which was a slightly better performance than FY21 net loss of INR 13,451.39 crores. The global shortage of chips has also put pressure on the company, affecting its capacity to fulfill pending orders.

However, the company seems to be further moving towards a financial mess. Tata Motors has a huge presence in European countries which are going through a tough time. The energy crisis in the continent has already started to take a toll on their economy which is only expected to spiral down to a much more catastrophic scenario in winters as demand for energy rises significantly over there.

The company’s revenue has already started to take a massive hit which is going to be reflected in the next quarterly earnings. Two European currencies, the Pound Sterling and Euro are plunging against the INR at a rapid pace. The is down from around 92 to 86 in a mere three sessions, which is around the lowest level of around March 2022. The is down to around 78, again the levels of around February 2020 lows.

Image Description: Daily chart of Tata Motors 

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As the hit on the European business has just started, the share price of Tata Motors is also reflecting this. The stock fell over 6% to INR 397.5 in today’s session so far, on the back of a volume of 18 million shares which is already above the 10-day average of 14.11 million shares.

Now, despite today’s decent plunge, there is no support in sight, meaning it could keep plunging from here as well. The next immediate support is present around INR 360 where the current fall could halt. 

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