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The auto stocks, particularly in the four-wheel segment, fell vertically in the afternoon trade, after the diesel news. M&M was the worst performer, the stock tumbling 4.5 per cent to Rs 679.25 on the BSE. Tata Motors shed 1.6 per cent to Rs 913.35 and Maruti Suzuki slipped 1.19 per cent at Rs 1,200.75.
Already the demand for vehicles has been hit by the rising cost of finance in the past six months and fuel price. Analysts felt any plan to remove the subsidy on the fuel would aggravate the slowdown.
According to Mr Kishor Ostwal of CNI Research, “The sector is already in downtrend because of continuous rate hike and slowdown in the economy. This (diesel price hike proposal) will add further pressure on these stocks.”
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