- Leading blue-chip auto stocks fell over 3% amid LPG, CNG shortage concerns over Middle-East conflict
- Nifty Auto index dropped 2.51% to 25,275.45, with all stocks in the red by 10:53 am Thursday
- Top losers included TVS Motor and Ashok Leyland, down more than 3.5%, Tata Motors hit 52-week low
Leading blue-chip auto stocks dropped over 3 % amid concerns of LPG shortage due to the ongoing Middle-East conflict. The Nifty Auto index fell as much as 2.51% at 25,275.45 levels. All Nifty auto stocks were in red at 10:53 am on Thursday. Stocks such as TVS Motor and Ashok Leyland led the fall in Nifty Auto, both down over 3.5% today. Benchmark Nifty 50 index last slipped 310 points to hit below the 23,600 mark.
Auto Stocks Extend Losses For Second Straight Day
Mahindra & Mahindra, Eicher Motors, Hero Motors, Maruti Suzuki dropped more than 2%. Tata Motors hits a new 52 week low, on the lowest level since Jun 2023.
Tanking more than 6.5% this week, Nifty Auto has become the top losing sector today, falling more than 2.5%, extending yesterday's fall of 3.15%. Notably, the auto index has hit the lowest level since September 2025.
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How does gas shortage impact auto firms?
The latest drop in auto stocks comes in the backdrop from the Middle East conflict which has raised concerns over gas shortage, primarily due to supply disruption to shipping via Strait of Hormuz, a critical connectivity point.
Automakers primarily depend on gas for manufacturing process of various parts. According to brokerage Nomura, gas forms a significant share of energy usage especially in paint shops, furnaces for forging, casting and various heat treatment processes for metal components and it may not be possible to shift to alternative energy sources such as electricity in the short term as it would involve changes in the machinery.
Noting major concerns of automakers, Nomura said, "The situation remains fluid. Preliminary OEM concerns emanate primarily from lower degree of control on process fuel choices/capital allocation flexibility at smaller component suppliers."
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Will it impact production?
However, enough gas supplies are available at present, however, if the situation persists, disruption may start in May, according to a Goldman Sachs report.
Highlighting the outlook for gas supplies, the report said, "While Auto OEMs presently have sufficient gas availability to support production during March (seasonally strong) and April (seasonally soft), if the ongoing shortage continues beyond the next two weeks (per our checks, most Auto OEMs noted production outlook may change if shortages continue beyond ~2 weeks) and if alternative solutions (substitutes/supplies) are unfeasible, there could be some production disruption in May-2026."
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