As investors booked gains following the recent surge, auto stocks saw selling pressure on Wednesday, causing the Nifty Auto index to drop by almost 1%. In anticipation of better margins over the holiday season, the index had closed 0.6 percent higher the day before.

Following reductions in the goods and services tax rates, auto shares have risen in recent weeks. Since the majority of automakers passed on the tax savings to their customers, analysts also became more optimistic about the category, anticipating greater sales volumes.

The Nifty Auto Index's Bharat Forge saw the biggest drop, falling almost 3%. Bajaj Auto's, Hero MotoCorp's, and Tata Motors' stock dropped as much as 2%. After a cyberattack earlier this month, Jaguar Land Rover, a division of Tata Motors, has decided to keep its plants closed until October 1. According to ICICI Direct Research, the production suspension is thought to have resulted in a loss of about 30,000 units.

After Goldman Sachs downgraded Ashok Leyland from "buy" to "neutral," noting limited upside after significant advances since mid-August, the company's shares fell 2.6%. Previously, Tata Motors reported that on the first day of Navratri, their dealers sold over 10,000 passenger cars and had over 25,000 client inquiries nationally. On Monday, Hyundai had its greatest single-day sales in five years with almost 11,000 dealer billings, while Maruti Suzuki reported retail sales of about 30,000 units.

In the previous session, confidence was improved by strong festive demand, as seen by the Nifty Auto index's intraday gain of around 1.5% on September 23. On Wednesday, however, selling pressure was observed in accordance with headline indices due to ongoing outflows of foreign funds and worldwide worries, such as proposed modifications to the US H-1B visa system.