Indian equity markets declined on Wednesday with the Nifty 50 index falling 1.1% at 10:15 AM IST, while the Nifty Auto index emerged as the top sectoral loser, declining 3.3% during the session, significantly underperforming the benchmark. According to LiveMint, all stocks in the Nifty Auto index were trading in the red as the sector came under heavy selling pressure amid a broader selloff in the Indian stock market. The BSE 150 MidCap Index declined 1.03% and the BSE 250 SmallCap Index shed 0.34%, while market breadth remained weak with 1,533 shares rising against 2,733 shares falling on the BSE. The Nifty Auto index was down 2.09% at 27,896 as of 10:15 AM, making it one of the top sectoral losers despite broadly strong August sales reported by automakers.
The Nifty Auto index declined 3.04% to 27,541.65, marking a 2.68% decline over five consecutive trading sessions despite robust August sales numbers across the automobile industry. As reported by The Hindu BusinessLine, the auto pack delivered a strong performance in August on a yearly basis, with growth momentum sustaining across segments and players; however, some moderation was visible month-on-month. Jefferies reported auto demand remained strong in August, with registrations of two-wheelers, passenger vehicles and trucks growing 24-29% year-on-year, while tractor registrations were relatively weak, rising just 3%. The brokerage estimated domestic wholesale growth of 36-43% for passenger vehicles and trucks and around 10% for two-wheelers and tractors. According to ICICI Securities, in August 2026, barring tractors, wholesale volume performance was broadly in-line or ahead of the brokerages estimate, with the auto sector continuing to ride GST cut-fuelled demand momentum while benefiting from a favourable base.
Two-wheeler stocks emerged as the biggest losers in the Nifty Auto pack, with Hero MotoCorp and Eicher Motors leading the declines, falling 6% and 5% respectively, as reported by LiveMint. According to Motilal Oswal Financial Services, Royal Enfield underperformed peers and saw an 11% year-on-year growth in volumes to 126.5K units, which was in line with expectations. Meanwhile, Hero MotoCorp's volumes grew 3% Y-o-Y, in line with expectations on the back of 4.5% growth in the domestic business. Other notable declines included Bajaj Auto shares tumbled 3% while TVS Motor saw a 2.65% fall. Bajaj Auto emerged as the outperformer in the two-wheeler segment, surpassing Motilal Oswal's expectations with a strong 28.3% YoY increase in wholesales, while TVS Motor reported an 18% increase in August sales to 4.34 lakh units. In the passenger vehicle space, shares of Maruti Suzuki, Tata Motors PV and M&M declined 2%, 1.4% and 2.5% respectively. Among auto ancillary stocks, Bharat Forge, Samvardhana Motherson, Bosch, Exide Industries, Uno Minda and Tube Investments of India declined by up to 4%.
Passenger vehicle sales in India rose by strong double-digits in August as automakers accelerated factory dispatches to build dealer inventory ahead of the upcoming festive season, with around 4.48 lakh cars, SUVs and vans sold during the month, marking a 36% increase from the 3.30 lakh units sold a year earlier, according to industry estimates. Maruti Suzuki India crossed the 1 million mark in total sales within the first five months of FY27 after selling nearly 1.77 lakh vehicles in August, while Tata Motors Passenger Vehicles and M&M also reported robust numbers, with their volumes growing 59% and 50% respectively during the month. Hyundai Motor India recorded its highest-ever domestic sales for August. In the two-wheeler segment, TVS Motor Company reported an 18% increase in August sales to 4.34 lakh units, Bajaj Auto's domestic motorcycle sales rose 10% to 2.02 lakh units, and at the premium end, Eicher Motors' Royal Enfield recorded 11% sales growth to 1.14 lakh units. The three listed CV OEMs recorded aggregate dispatch growth of 43% Y-o-Y, with Tata Motors CV continuing to outperform its peers in the commercial vehicle segment.
Despite the sharp selloff in auto stocks, brokerages said the August sales data reflected continued strength in underlying demand across most segments, with several companies reporting healthy growth in volumes. According to Emkay Global, the auto sector delivered a strong year-on-year performance in August, with growth momentum continuing across segments and companies, though some moderation was visible on a month-on-month basis. Motilal Oswal Financial Services said retail demand trends during August remained encouragingly strong across segments, with the exception of tractors, where growth rates moderated as the base caught up. The brokerage noted that August wholesales remained strong across passenger vehicles, commercial vehicles and two-wheelers, all of which reported healthy double-digit growth, while tractor growth momentum slowed to high single digits. Motilal Oswal attributed the strength in wholesales to steady retail sales, lean inventory levels and easing supply constraints. "Overall, given the sustained demand momentum and cooling input cost pressure, we expect renewed investor interest for the sector in the coming quarters," Motilal Oswal said. The brokerage named Maruti Suzuki, TVS Motors and M&M as its top picks among OEMs, while within auto ancillaries, its preferred picks are Motherson Sumi Wiring India, Samvardhana Motherson International and Endurance.
