Nifty Auto plummets nearly 3% as M&M, Tata Motors fall sharply; Maruti Suzuki hits new record high

Nifty Auto index dropped nearly 3% due to M&M’s sharp decline after announcing price cuts. Tata Motors also reduced prices on SUVs. Maruti Suzuki, however, surged to a new high on registration fee waiver for hybrid cars.

Nifty Auto Index Decline

• Intraday Performance: The Nifty Auto index plunged nearly 3% to 25,094 points intraday, driven primarily by Mahindra and Mahindra (M&M).
• M&M’s Impact: M&M’s shares plummeted almost 8% to ₹2,697 per share, contributing to nearly 80% of the index’s decline. This followed M&M’s announcement of a temporary price cut of up to ₹2 lakh on its XUV700 AX7 variant, aimed at boosting sales.

Tata Motors and Other Auto Players

• Tata Motors: Also implemented price cuts on its SUVs, Harrier and Safari, until July 31, reflecting broader weakness in demand within the segment. Tata Motors shares fell 2.85% in today’s trade.
• Other Losers: Exide Industries dropped 5% to ₹549 per share amid profit booking, following a recent decline from its all-time high.

Other Auto Stocks

• Mixed Performance: Stocks like Samvardhana Motherson International, Apollo Tyres, Hero MotoCorp, Bosch, Ashok Leyland, MRF, Balkrishna Industries, Bharat Forge, and Bajaj Auto traded with losses ranging from 0.3% to 2%.

Maruti Suzuki’s Positive Momentum

• Gainers: Maruti Suzuki continued its strong performance, reaching a new all-time high of ₹13,299 per share with nearly a 4% gain. This follows a previous day’s surge after Uttar Pradesh waived registration fees on hybrid cars, benefiting Maruti Suzuki significantly due to its strong presence in the hybrid vehicle market.

Frontline Indices

• Nifty 50 and Sensex: Both indices slumped 1% today amidst uncertainty over potential interest rate cuts by the US Federal Reserve. Federal Reserve Chair Jerome Powell’s comments on inflation and monetary policy direction influenced market sentiment negatively.

Market Outlook

• Federal Reserve’s Influence: Traders are closely monitoring the Federal Reserve’s stance on interest rates, with expectations of a rate cut in September currently standing at 73%, as per the CME Group’s FedWatch Tool.
• Upcoming Data: The upcoming June consumer price index (CPI) data is anticipated to provide further insights into inflation trends and their impact on monetary policy decisions.

Conclusion

Today’s market movements underscore the volatility and sensitivity to global economic indicators, particularly inflation and central bank policies. Investors are advised to stay informed and consult with financial experts before making investment decisions, especially in sectors experiencing significant price movements like automotive and indices influenced by global economic factors.