Tata Motors falls; China stock rout raises JLR worries

Shares of Tata Motors fells over 6 per cent in intraday trade today amid concerns over slowdown in auto sales in China, which constitute a major market for automakers' subsidiary Jaguar and Land Rover (JLR).

Experts believe that the slowing China demand may hurt JLR volumes, which may remain an overhang on Tata Motors stock.

Data release on Wednesday show that China auto sales June fell for the first time in over 2 years. China is Jaguar Land Rover's largest market. This added fuel to to the fire. Weak JLR sales in China had hit the company's bottomline in the March quarter. To fight slowdown, the company recently cut JLR's product prices in the country.

"In the interim period, the stock price may probably take a hit because of the performance coming up from the JLR portfolio in China. I would think that temporarily it might have an impact on to the company's performance, even as I am unable to quantify as to how much it could have," said Deven Choksey, MD, K R Choksey Securities.

The stock was headed towards its biggest single-day loss since May 27.