India, June 25 -- Following the rise in volatility experienced over the past few weeks due to geopolitical tensions in the Middle East, the prices of global crude oil have fallen to pre-conflict levels. This fall has tremendously boosted the sentiments of the investors, leading to a rally in the equity markets of India. The largest gainers in the rally were those in the Nifty Auto index, which jumped by about 3% higher than most other indices.

The rally has once again attracted attention towards automobile stocks and posed a question: is this merely a relief rally following lower oil prices, or is the sector on the verge of a re-rating?

Although there are other factors as well which affect automobile stocks, the fall in crude prices ha...