Auto stocks came under heavy selling pressure on Thursday morning, with the Nifty Auto index plunging nearly 3 percent and automobile companies dominating the Nifty top losers list, as crude oil prices surged back above $100 a barrel, stoking fears of fuel-driven inflation.

At 10:44 am, the Sensex was down 550 points or 0.7 percent at just above 76,300, while the Nifty fell to below 23,700. Market breadth remained weak with 2,481 shares declining against 1,049 advances on the NSE.

The Nifty Auto index fell 2.8 percent -- the most among sectoral indices, as higher energy prices triggered concerns about input cost pressures and demand outlook for automobile companies.

Among the biggest losers on the Nifty, Mahindra & Mahindra shares dropped about 3.45 percent, emerging as the top laggard on the benchmark index. Other automobile stocks also saw broad-based selling. Eicher Motors stock declined around 2.8 percent, Tata Motors Passenger Vehicles dropped about 2.5 percent, and Maruti Suzuki fell about 2.4 percent. Two-wheeler maker Bajaj Auto slipped roughly 2.2 percent, placing five auto stocks among the top losers on the Nifty during the session.

The weakness in the sector comes amid renewed surge in crude oil markets following escalating tensions in the Middle East and reports of shipping disruptions near the Strait of Hormuz, a critical global oil transit route. Crude oil prices have risen again, with Brent crude hovering near $100 per barrel, raising concerns about higher fuel costs and a potential uptick in inflation.

For automobile companies, higher crude prices have multiple implications. It can increase fuel costs for consumers, affect vehicle demand, and also raise input costs through petrochemical-linked components such as plastics, synthetic rubber, and other derivatives used in making vehicles.

Additionally, the market is also watching potential disruptions in gas and CNG supply chains, as a significant portion of global energy trade moves through the Middle East. Any prolonged disruption could influence fuel availability and pricing dynamics in key markets.

The broader market remained under pressure amid global risk-off sentiment linked to geopolitical tensions and rising energy prices. Other Nifty losers included Trent, Titan Company, and Hindalco, which fell between 1.8 percent and 2.8 percent. Sectorally, weakness extended beyond automobiles. The Nifty Consumer Durables index declined about 1.9 percent, while the Nifty FMCG index fell around 1.5 percent and the Nifty Metal index slipped about 1.4 percent.

Meanwhile, energy-related stocks provided some support to the market. The Nifty Energy index rose over 1 percent, and the Nifty Oil & Gas index gained about 0.7 percent, reflecting the positive impact of higher crude prices on upstream energy companies. Market volatility remained elevated, with the India VIX rising more than 4 percent.