The Nifty Auto sectoral index surged 2.8% to its intraday high of 27,132.95 points on Thursday, June 25, significantly outperforming other domestic sectoral indices. According to NSE data, the index gained 748.60 points from the previous close of 26,384.35 points, with the sector emerging as the largest gainer among all domestic indices. As per Moneycontrol, fourteen of the 15 constituents of the Nifty Auto index traded higher, with Tube Investments of India being the only stock to decline marginally. Major auto stocks including Maruti Suzuki India, Mahindra & Mahindra, Hero MotoCorp, TVS Motor, Ashok Leyland, Mahindra and Mahindra, Eicher Motors, Samvardhana Motherson International, Bajaj Auto, and Bharat Forge rose more than 2% each. Uno Minda was the top performer among auto ancillary stocks, rising more than 4%, while Bosch Ltd gained 2.37%. The broader market also showed strength with Nifty rising 0.96% to 24,246 and Sensex gaining 0.98% to 77,750 by midday, as reported by NDTV Profit.
The rally was primarily driven by Brent Crude prices declining to their lowest level since February 27, 2026, providing significant relief for oil-sensitive companies. As per Moneycontrol, crude oil prices have declined by 37% from their May 2026 peak levels of $115 per barrel and are now almost back to normalized levels of $68-70 per barrel. This decline provides substantial relief for oil-sensitive companies, with crude oil constituting a 30-50% component of total cost of operation (TCO) for fleet operators. The easing of diesel cost concerns has particularly benefited commercial vehicle manufacturers, as diesel price volatility had been a key concern for fleet operators. As India is an importer of the majority of its crude oil needs, lower global oil prices indicate that fuel prices will potentially reduce at the pump level over time as companies buy crude oil at lower prices. NDTV Profit reports that Brent crude dropped more than 1.52% to around $72.4 a barrel, while US benchmark West Texas Intermediate (WTI) fell 1.43% to about $69.3 a barrel, following a sharp 4% drop in the previous session.
Maruti Suzuki India and Mahindra & Mahindra advanced sharply, gaining 4.6% and 3.7% respectively, with both stocks also among the top gainers on the benchmark Nifty50 index. Hero MotoCorp climbed 3% after brokerage CLSA retained its "outperform" rating on the stock and maintained a target price of ₹5,728, implying an upside potential of 17% from the previous close. CLSA noted that at 15 times forward price-to-earnings valuation, the current market price implies a 13.5% EBITDA margin for FY27-28 and no volume CAGR during the period, but highlighted that a GST rate cut and the company's scooter launch pipeline could support a 5% volume CAGR in FY27-28. TVS Motors gained 3.6% with a current market price of ₹3,566, while Samvardhana Motherson rose 3.7% at ₹149. Ashok Leyland climbed 3% at ₹159. Among two-wheelers, Eicher Motors and Bajaj Auto outperformed Hero MotoCorp and TVS Motor, with Bharat Forge and Sona BLW being the biggest outperformers among auto ancillaries, as reported by CNBC TV18.
The lower crude oil prices have created a ripple effect on reducing input costs for companies using crude oil-linked derivatives like rubber, paint, plastics, and other petrochemical products in their manufacturing process. For end customers, the lower crude oil prices translate into reduced petrol and diesel rates at the pump level, which fuels demand for automobiles in the market. According to experts from Goldman Sachs, during periods of cooling fuel prices, market demand comes back fastest in scooters, entry-level cars, premium motorcycles and premium hatchbacks. The analysts noted that companies like TVS Motor, Eicher Motors, and Maruti Suzuki are among those best-positioned to see an additional leg of upcoming volume growth due to demand from lower oil prices. The June VAHAN registration data indicates that strong demand has continued, with total registrations increasing 23% this month so far, while passenger vehicles have witnessed growth of around 30% and two-wheelers have seen more than 20% growth. The auto industry faced supply chain issues related to exports in the last two to three months, but companies such as Ashok Leyland and Uno Minda had raised these issues, and the improvement in supply chain issues is now supporting the sector's recovery.
The Nifty Auto index has achieved a significant technical milestone by crossing the 200-day moving average (DMA) and is up 15% from recent lows hit amid West Asia tensions. As per CNBC TV18, the index is trading 3% higher around 2.10 pm on Wednesday, with Samvardhana Motherson, M&M, TVS Motor, Maruti Suzuki, and Ashok Leyland among the top gainers trading 4-6.6% higher. Barring Tube Industries and Exide Industries, the remaining 13 stocks in the index are trading with gains. The sector has demonstrated strong momentum across multiple timeframes, with the index posting gains for the third consecutive week on a weekly basis and third consecutive month on a monthly basis, as reported by Mint. Auto stocks have been major underperformers in 2026, with Maruti Suzuki and M&M shares still down 15-17% this year, but the current rally suggests a potential turnaround driven by metal prices being sharply lower, improvement in supply chain issues, and strong retail demand.
