Auto stocks came under heavy selling pressure on September 2, with the Nifty Auto index falling more than 2%, as a fresh surge in crude oil prices amid escalating US-Iran tensions weighed on investor sentiment. The decline came despite broadly strong August sales reported by automakers and favourable demand commentary from brokerages. Crude prices extended their gains after the US and Iran exchanged strikes overnight, raising concerns about potential disruptions to oil supplies from the Middle East. Brent crude rose 0.8% a barrel in early trade after jumping more than $4 in the previous session, while WTI gained 0.5%. Higher crude prices are generally negative for automobile companies as they can increase input and transportation costs, add to inflationary pressures and potentially weaken vehicle demand. The broader risk-off sentiment across Indian equities further amplified selling pressure in the auto sector. All constituents of the Nifty Auto index traded in the red. Hero MotoCorp was the biggest loser, falling 5.18%, followed by Eicher Motors, which declined 3.99%. Bosch fell 3.43%, Sona Comstar dropped 3.05%, and Bajaj Auto declined 2.75%. M&M was down 1.86%, while Maruti Suzuki and TVS Motor fell 1.32% and 0.98%, respectively. The selling came despite strong August sales numbers from several automakers.

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