Bumpy ride: Automakers hit reverse gear, BSE Telecom index down 2.9{bce2ac57dae147ae13b811f47f24d80c66c6ab504b39dda4a9b6e8ac93725942}


were among the top losers on the bourses on Friday.


The BSE Auto Index declined 2.95 per cent on Friday, and was the biggest sectoral loser with the exception of telecom operators.


The BSE Telecom index was down 2.97 per cent.


In comparison, the benchmark Sensex closed the session with losses of 1.26 per cent. This was the worst show by the auto index in the last three months.


Friday’s sharp correction breaks the momentum in the auto index, which had been one of the rally leaders since the March 2020 lows.


The auto index has more than doubled since March 23, 2020, against a 78 per cent rally in the Sensex during the period.


The country’s largest carmaker Maruti Suzuki was, however, the biggest index loser and saw a 5 per cent decline in its share price on the NSE on Friday.


ALSO READ: Tata Motors hits profit after three quarters, net zooms 67{bce2ac57dae147ae13b811f47f24d80c66c6ab504b39dda4a9b6e8ac93725942} to Rs 2,906 cr



This was the worst show by Maruti Suzuki since April 3 last year, when its share price declined by 5.5 per cent.


The decline in Maruti’s share price came after company reported lower-than-expected revenues and net profit in its results for the December 2020 quarter.



Auto analysts also raised concerns about a decline in the company’s operating margins on account of rising metal and other commodity prices.


The country’s top two-wheeler maker Hero MotoCorp was another big loser, and declined by 4 per cent on Friday.


Bajaj Auto also underperformed the broader market and closed the day down 2.7 per cent.


The auto sector is a big barometer of discretionary consumer demand in the country, and some investors fear an adverse impact demand for passenger cars if the forthcoming Union Budget announces a hike in taxes to fund the country’s growing fiscal deficit.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor