Auto stocks extend yesterday's rebound; Nifty Auto jumps 2% after recent 15% fall, M&M, Maruti lead gains

Auto stocks

• Nifty Auto index rose 2 percent, leading NSE gains on Tuesday
• Auto stocks rebounded after a sharp correction earlier this month
• Tata, Mercedes, Audi to raise prices due to increased costs

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Auto stocks recovered for a second straight session on Tuesday, with the Nifty Auto index rising around 2 percent in morning trade, as buying returned after a sharp correction earlier this month. The sector was the top performer among NSE indices, while the broader market also firmed up.

At 10:24 am, the Nifty Auto index was up 2 percent at 25,096. The rebound comes after the index had fallen 15.7 percent over 10 sessions from February 26 till March 13. Despite the recovery over the past two sessions, the index remains under pressure, down 6.25 percent over the past week, 10.9 percent in one month, and about 11 percent so far this year.

Gains were broad-based across auto manufacturers and ancillary companies. Mahindra & Mahindra rose about 2.9 percent, featuring among the top gainers on the Nifty 50, while Maruti Suzuki advanced over 2 percent. Among other stocks, Exide Industries gained around 2.3 percent, while Ashok Leyland, Motherson, and Bharat Forge rose between 1.6 percent and 1.7 percent. Eicher Motors, TVS Motor, Bajaj Auto, and Hero MotoCorp also traded higher, with gains of up to 1.6 percent.

• Also read | India's mid-, small-cap indices drop over 20% in dollar terms from 2024 peak

The strength in auto stocks came alongside a firm broader market. The Sensex was up 480 points and the Nifty rose 155 points, while market breadth remained strong with advancing shares outpacing declines. India VIX declined over 7 percent, indicating easing volatility and supporting risk appetite for cyclical sectors such as automobiles.

Stock-specific developments also aided sentiment. Shares of Tata Motors’ commercial vehicle business rose after the company announced a price increase of up to 1.5 percent across its commercial vehicle range from April 1, aimed at offsetting rising commodity costs.

The move is part of a broader trend across the sector. Luxury carmakers Mercedes-Benz India and Audi have announced price hikes of around 2 percent, citing higher input costs and currency fluctuations. Hyundai Motor India has already implemented price increases, while Maruti Suzuki is evaluating a similar move, indicating that automakers are attempting to pass on cost pressures.

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