In the last five trading sessions, Tata Motors share price has risen by around 8% to Rs 709, marking a significant rebound after falling continuously for the last six months. Actually this price surge came after the company announced good news for shareholders. The manufacturing facility for Tata Motors’ luxury brand Jaguar Land Rover (JLR) is located in Britain and recently signed a historic trade agreement with India and America. This will help to lower the prices of JLR vehicles and boost the company’s profits and sales.
Tata Motors Share Price
Tata Motors share price surged nearly 8% in the last 5 trading sessions amid America’s tariff cuts on UK cars, India-UK FTA and Demerger. The shares of Tata Motors ended at Rs 709 on NSE with a 3.83% gain. Talking about the share performance, Tata Motors Shares have gained as much as 19.15% in the last month. However, the stock is still trading 39.86% below its 52-week high Rs 1,179.00.
In the last 6 months, the stock has delivered negative returns of 11.89% and nearly 26% in the last year. However, It is expected that Tata Motors share will continue its upward trend on the upcoming weekly opening as well. Check how this agreement will influence the stock price of Tata Motors.
America Cut Tariffs on UK
The US has lowered its 25% tariff on UK imports to the existing comprehensive duty of 10% on all UK imports; this lower tariff rate will only apply to one lakh automobiles. Given that America is Jaguar Land Rover’s fifth-largest trade partner, the business’s sales and car prices will rise in America as a result of the tariff rate reduction, which will directly benefit Tata Motors, the parent company.
India-UK FTA Agreement
The goal of the comprehensive India-UK Free Trade Agreement (FTA) is to advance trade deals and fortify economic connections between the two nations. The deal includes a number of industries, including financial services, technology, cars, textiles, and agriculture.
How will Tata Motors benefit from FTA?
Tata Motors is expected to benefit from this FTA in many ways, some of the major benefits of which are discussed as follows:
Also Read: Tata Motors Share Price Target From 2025-2050
Greater opportunities for Jaguar Land Rover (JLR): The British automaker Jaguar Land Rover (JLR), which is owned by Tata Motors, is probably going to gain the most from this deal. The FTA will lower the import tax on automobiles coming into India from Britain. Car imports into India are currently subject to a tariff of more than 100%, which raises the cost of the vehicles considerably. Following the deal, this tariff was lowered to 10%, which will lower the cost of JLR vehicles and boost demand for them.
Reduced Production Costs: The FTA will also lower customs on car parts exported to the UK from India. By doing this, Tata Motors will be able to lower its production costs and increase its profitability.
Competitive Market in India: Tata Motors’ JLR automobiles will be more competitive in the Indian market as a result of lower duties and cheaper production costs. By doing this, the business of Tata Motors will be able to draw in more clients and grow its market share.
Encouragement to investment and innovation: Tata Motors will be encouraged by the FTA to make investments in its R&D and production operations in India. The business may concentrate on creating new products and technology, which will boost its potential for long-term success.
Tata Motors Share Technical Analysis
The RSI of Tata Motors share is 64.2 which indicates that the stock is neither trading in oversold zone nor in overbought zone. Looking at the moving averages, Tata motors shares are currently trading above its 5-days, 10-days, 20-days, 30-days, 50-days and 100-days moving averages indicating a potential short-term bullish uptrend. However investors should monitor the support zone around Rs 677.98 and resistance at Rs 712.36.
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