Shares of Samvardhana Motherson International came under pressure on Tuesday, January 20, tracking weakness in European automobile stocks after fresh tariff-related concerns emerged overnight.
The auto ancillary stock was in focus after European markets reacted sharply to comments by US President Donald Trump, who threatened to impose higher tariffs on several European nations. The pan-European Stoxx 600 index closed 1.23% lower on Monday, with automobile and auto component stocks among the worst performers.
Market sentiment weakened after Trump warned that eight European allies could face escalating tariffs if they oppose his proposal related to Greenland. According to reports, the proposed tariffs could begin at 10% from February 1 and rise to 25% by June 1 if no agreement is reached. Countries potentially affected include Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland.
European auto stocks bore the brunt of the sell-off, with the Stoxx Europe 600 Automobiles & Parts Index falling 2.22%. Shares of Volkswagen declined 2.82%, Porsche slipped 2.68%, while BMW dropped nearly 3.74%, according to a CNBC report.
The decline in European auto stocks weighed on Samvardhana Motherson due to its significant exposure to European original equipment manufacturers. As per available information, the company supplies components such as wiring harnesses, modules, polymer parts, and electronics to major European carmakers, including BMW, Mercedes-Benz, Volkswagen, Audi, Renault, and Opel.
Given its strong linkage to European auto demand, the stock reacted in line with broader weakness in global auto and auto ancillary counters, as investors assessed the potential impact of tariff-related uncertainty on overseas markets.
