Nifty falls as auto sales and foreign outflows weigh

The session’s pressure came against a backdrop of sustained foreign selling and weakness in auto shares. Provisional exchange data showed foreign investors were net sellers of Rs 10,148.41 crore on September 30, while domestic institutions bought Rs 11,271.73 crore. Those are the latest flow figures available, not Thursday’s final flows.

Auto stocks were a clear drag. Bajaj Auto’s exchange-reported September figures showed domestic two-wheeler sales fell 12% year-on-year to 2,39,771 units. The company’s total sales rose 5% year-on-year to 5,38,443 units, but that was below Jefferies’ expectation of 5,85,000 units; the weak domestic mix and miss were cited in market reports as weighing on the stock.

Infosys, TCS and HCLTech were among the IT names providing support. BusinessLine attributed early strength in the sector partly to investors looking ahead to Accenture’s results for cues on global technology spending. That support came even as Reuters reported brokerages expected muted September-quarter growth for Indian IT services firms, with AI-related pricing pressure and cautious client spending among their concerns.

Bajaj Auto’s weaker domestic two-wheeler sales offered a specific explanation for pressure in autos; reports also described weakness across other automobile shares as September sales updates came in. For power and infrastructure/industrial stocks, the material available did not identify a distinct company or policy catalyst. Elevated bond yields and foreign outflows were the broader headwinds; their effect on capital-intensive names is a possible explanation, not a confirmed sector-specific cause.

The HSBC India Manufacturing PMI rose to 55.1 in September from 52.8 in August, indicating a faster expansion in factory activity, though it was below the preliminary estimate of 55.7. The survey cited stronger new orders and output, while also recording faster input-cost inflation than in August; the increase remained below its long-run average.

Official data put September gross GST collections at Rs 2,03,521 crore, up 14.7% year-on-year. The stronger activity and tax figures are supportive signals for domestic demand and revenue collection, but they did not offset the market’s immediate concerns about foreign selling and global financing costs. No new CPI, IIP or trade print was identified in the material available for this report.

SEBI chairman Tuhin Kanta Pandey said the regulator was working with the RBI to streamline foreign portfolio investor onboarding. Separately, the NSE received SEBI’s no-objection certificate for corporate-bond index futures; the product still requires RBI approval. These are market-access and hedging developments, not an RBI rate decision.

Wall Street had ended mixed in the preceding session, while Asian trading on Thursday was uneven. Reuters reported that technology shares in parts of Asia drew support from Micron’s outlook, but high bond yields remained a constraint on broader risk appetite.

The US 10-year Treasury yield touched its highest level since 2007 during Thursday trading, Reuters reported, and the dollar remained firm. For India, that combination can make competing US assets more attractive to overseas investors and add pressure to the rupee. Brent’s retreat from recent highs offered some offset: as a major crude importer, India benefits when lower oil prices ease potential pressure on its import bill and inflation.

Bajaj Auto’s September total sales were up 5% year-on-year, but fell short of Jefferies’ 5,85,000-unit estimate. Domestic two-wheeler sales declined 12% year-on-year, while exports rose 34%; the divergence helps explain why stronger total volumes did not reassure the market about home demand.

The day’s company-specific catalyst was the monthly sales update rather than a major earnings release. For the wider IT sector, Reuters reported that brokerages were braced for subdued September-quarter growth and possible guidance pressure, making upcoming results and outlooks important tests of whether the sector’s session strength can be sustained.

The next market tests are the RBI’s policy decision next week and the start of the September-quarter earnings season. TCS is due to report on October 8; investors will also be watching company guidance for evidence on demand, pricing and cost pressures.