Auto stocks continued to face selling pressure for the fourth consecutive trading session, dragging the Nifty Auto index down nearly 2 percent to a one-month low. The sector has emerged as one of the worst performers in recent sessions amid mounting concerns over demand, margin pressure and broader market uncertainty.
Why Auto Stocks Are Under Pressure
Market participants said auto stocks are bearing the brunt of weak demand signals and rising risk aversion across equities. Persistent worries around slowing rural consumption, cautious urban spending and higher input costs have dented sentiment toward automobile manufacturers and auto ancillaries.
According to analysts, the sector’s recent underperformance is also linked to profit booking after earlier gains, coupled with global macro risks that have reduced appetite for cyclical stocks.
Demand Concerns Weigh on Outlook
Demand visibility remains a key challenge for the auto sector. While festive season volumes offered some support, analysts believe sustainability of growth remains uncertain, especially in entry-level segments and commercial vehicles. Higher interest rates and tighter liquidity conditions are also impacting vehicle financing demand.
What Lies Ahead for Auto Stocks
Experts believe auto stocks may remain volatile in the near term, with stock-specific performance likely to dominate. Companies with strong order books, pricing power and exposure to premium segments may outperform, while others could continue to see pressure if demand recovery remains uneven.
With the broader market also showing signs of fatigue, auto stocks are expected to stay sensitive to macroeconomic cues, interest rate expectations and consumption trends in the coming weeks.
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