Even as auto companies displayed their much-awaited models in the ninth auto expo in New Delhi, their shares declined on Thursday. The broader markets registered loss as foreign institutional investors sold their holdings under participatory notes and higher index levels prompted investors to book profits, said dealers.
While the benchmark Sensex of the Bombay Stock Exchange closed lower by 287.70 points or 1.38 per cent at 20,582.08, the broader Nifty of the National Stock Exchange lost 115 points or 1.83 per cent to end the day at 6156.95 points. The BSE Auto Index lost 1.38 per cent or 103.80 points to end the day at 5444.35 points with TVS Motors topping the losers among automobile companies. The scrip slid 6.74 per cent or Rs 4.80 to end at Rs 66.45. Shares of Tata Motors, which unveiled its Rs 1 lakh car Nano on Thursday, lost Rs 21.45 or 2.78 per cent to end at Rs 749. All members of the BSE Auto index ended the day in the red.
Ashok Leyland shares lost 5.89 per cent to end at Rs 51.10, while Bajaj Auto lost 1.27 per cent or Rs 32.10 to end at Rs 2500.
"Automobile companies are facing problems due to the interest rate scenario and may remain under pressure until interest rates ease off," said Rahul Nangalia of Nangalia Stock Broking.
"Foreign institutional investors were unwinding their PN positions and moving money into mutual funds. Further, many of the FIIs are hedging their portfolios against the Nifty," said Dev Kapadia, senior dealer of Lalkar Securities.
Analysts say weakness in stocks out of the benchmark indices was a precursor to the impending correction in the market, which finally happened on Thursday. "Though the Nifty and the Sensex registered gains, several stocks were battered down in the last two-three trading sessions. It is normal profit booking at higher levels. Investors are pulling out money from the markets to apply for the Reliance Power IPO. The markets may see some bearish undertone in the near term," said an analyst with a domestic brokerage.