Auto sector shares fall by 1 per cent due to profit booking

According to a report by The Hindu, despite an overall positive trend in the Indian stock market on Thursday, the Nifty Auto index saw a decline of more than 1 per cent. Pressure was created in the shares of this sector as investors chose to book profits following the rally in the previous session. The Nifty Auto index closed at 28,231, down by 292 points or 1.02 per cent. This decline was noted even as crude oil prices softened and other benchmark indices also saw a marginal increase. Nifty 50 and Sensex closed at levels of 25,299.35 and 81,911.01, respectively, with gains of 44 points and 32 points.

Hundai Motor India was the biggest loser among auto sector shares, recording a decline of approximately 2.5 per cent. Additionally, Mahindra & Mahindra shares fell by 1.9 per cent and Tata Motors shares fell by 1.3 per cent. According to market analysts, while auto shares saw a rally on Wednesday following the drop in crude oil prices, the profit booking on Thursday was the primary reason for this decline. Meanwhile, the Nifty IT index also remained under pressure, recording a decline for the third consecutive session, even though a recovery was seen in technology stocks globally.

V.K. Vijaykumar, Chief Investment Strategist at Jiojit Financial Services, stated that the recovery in AI stocks globally is likely to continue in the short term. The sharp decline seen globally last week following the Democrats' victory has now subsided. However, issues regarding Nvidia could impact the market. On the other hand, the Indian rupee also remained under pressure. Despite foreign fund inflows, the rupee closed at 94.04, down by 0.4 per cent, due to dollar purchases by government banks on behalf of oil marketing companies and rising inflation concerns.

Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP, stated that dollar strength and Fed rate expectations have temporarily mitigated the impact of local equity inflows. Additionally, India's consumer price index-based inflation in October has reached a two-year low of 6.09 per cent, crossing the Reserve Bank of India's upper limit of 6 per cent.

The Nifty Auto index is a sectoral index of the National Stock Exchange (NSE) that represents the performance of the Indian automobile industry. This index includes leading companies such as passenger car, two-wheeler, and commercial vehicle manufacturers. In the past, this index has experienced fluctuations based on the contribution and demand of the automobile sector in the Indian economy.