Auto shares continued their losing streak for the second consecutive session on Tuesday, with BSE Auto index skidding nearly 4 per cent amid concerns that higher oil prices could affect sales. Among index heavyweights Hero MotoCorp, Tata Motors, Maruti Suzuki India, Bosch, Ashok Leyland and Escorts fell between 4-6 per cent on the Bombay Stock Exchange (BSE).
BSE auto index fell 3.8 per cent to close at 15,783.39, as against 1.73 per cent decline in the BSE Sensex. Meanwhile, the Nifty Auto index ended at 7,020.75, down 3.83 per cent, as compared to 1.69 per cent fall in Nifty 50 index.
The bears tightened their grip on Dalal Street as rising crude oil prices in the aftermath of drone attacks on Saudi Arabia oil establishments, coupled with weakness in the rupee against the US dollar, rattled investor sentiment.
"The sudden spike in oil prices on account of drone attacks on Saudi Arabia establishments has definitely disrupted sentiments as it tends to adversely impact current account and fiscal deficit, thereby deterring the path of recovery for an economy that is already immersed in a slowdown," said Nischal Maheshwari, CEO, Institutional Equities, Centrum Broking.
Tata Motors shares dipped 5.13 per cent to close at Rs 121.95 against Monday's closing level of Rs 6,333.50. Maruti Suzuki India slipped 4.39 per cent to Rs 6,130.65 and Bosch dropped 4.19 per cent to close at Rs 13,660.95 on the BSE. In a similar trend, shares of Ashok Leyland ended 4 per cent lower at Rs 59.95 apiece on the BSE.
Stocks of auto companies have taken a severe hit in the recent past amid a prolonged slump, affecting vehicle sales across all segments. Sale of automobiles in India crashed by 23.5 per cent in August, the worst ever decline in a month on a year-on-year basis since the time industry body Society of Indian Automobile Manufacturers (SIAM) began collating data in 1997-98.
In August, total sales stood at 18,21,490 units against 23,82,436 units in the same month last year. In absolute volume terms, sales have also fallen on a month-on-month basis since May when 20,86,358 units were sold. Since December 2018, year-on-year monthly decline in sales has been unabated.
Edited by Chitranjan Kumar