The Nifty Auto index took a significant hit on Monday, August 5, as it fell close to 4 per cent in the intraday trading session to 24,706.50 points. This drop marked the index’s lowest level since July 19, reflecting the overall stock market crash that day. Index constituents like Tata Motors were among the major contributors to this decline, with the company’s shares dropping by 7.4 per cent to ₹1,015.45 per share on Monday, compared to ₹1,096.65 at the previous close. Tata Motors‘ performance dragged down the Nifty Auto index by 1.17 per cent, highlighting the impact of individual stock movements on broader market indices.
In addition to Tata Motors, other index laggards for the day included Mahindra and Mahindra, which fell by 2.24 per cent to ₹2,688 on Monday, compared to ₹2,749.65 at the previous close. Maruti Suzuki India Limited also experienced a decline of 4 per cent to ₹12,217, compared to ₹12,726.40 at the previous market close. These companies contributed to the overall negative performance of the Nifty Auto index, with Mahindra & Mahindra and Maruti Suzuki India dragging the index down by 0.49 per cent and 4 per cent on August 5, respectively.
The stock market crash on August 5 was attributed to fears of a potential United States recession, prompting global investors to move away from riskier assets and leading to a sharp sell-off in stocks across Western and Eastern equity markets. The Nifty 50 index also fell by 2.68 per cent to 24,055.60 points on Monday, compared to 24,717.70 points at the previous week’s market close, further reflecting the widespread impact of the market downturn.
Amidst these market challenges, Tata Motors announced that it is expecting constrained production in the second and third quarter of the financial year 2024-25 due to the shutdown of an annual power plant and floods affecting its key aluminium supplier. On the other hand, Maruti Suzuki India revealed its commitment to focusing on the low-cost car segment to cater to budget-conscious customers, despite the segment underperforming in sales. Mahindra and Mahindra, on the other hand, reported positive results in the April to June quarter, with a focus on margin expansion in its Auto and Farm segments as part of its strategy to achieve scale in the financial year 2024-25.
Overall, the performance of the Nifty Auto index on August 5 and the broader market trends reflect the challenges and uncertainties facing the automobile industry amidst global economic concerns. Despite these challenges, companies like Tata Motors, Maruti Suzuki India, and Mahindra and Mahindra are navigating the market conditions with strategic initiatives to drive growth and profitability in the coming quarters.