Auto stocks rose on Wednesday after wholesales for November came in higher than expected. The Nifty Auto index rose over 1 percent in intra-day deals as compared to a weak Nifty.

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Tata Motors was the top gainer, up over 4 percent after the automaker reported a 26 percent YoY rise in domestic sales at 47,859 units. In the passenger vehicle (PV) segment, sales more than doubled with 21,641 units sold in November 2020 as against 10,400 units sold in the year-ago period.

Bajaj Auto also rose nearly 2 percent after November sales data. The company reported around 5 percent YoY growth in total vehicle sales at 4,22,240 units in November. The company had sold a total of 4,03,223 units in the same month last year.

Maruti Suzuki also rose 2 percent as it reported a 1.7 percent YoY growth in total sales during the month. The total sales for the company stood at 153,223 (domestic plus exports) in the month as against 1,50,630 in the year-ago period.

Among other stocks, Bharat Forge, Hero Moto, TVS Motor and Ashok Leyland were also positive after their sales data.

Commenting on the November auto data, brokerage house Morgan Stanley said that domestic growth tapered off a bit as expected but rural segments continued to perform well. It expects all segments to recover sharply in 2021.

The brokerage sees growth tapering off in Q3 and rebounding sharply in Q4. It overweight on Maruti, M&M, Bajaj Auto, and Eucher Motors while Motherson Sumi is the top pick among suppliers.

Meanwhile, Nomura said that auto industry wholesales for November were largely in-line with expectations. It added that volume growth was the strongest in tractors followed by two-wheelers and PVs. Retails during the festive season were robust in tractors due to strong rural sentiment, it noted.

CLSA, on the other hand, said that volume recovery in the auto sector continues but lower than the peak in October. It added that it prefers deep cyclical plays such as Tata Motors and Ashok Leyland.