If you are on the lookout for investing in the automobile industry, there is nothing better than the Nifty Auto Index. It comprises the companies involved in the marketing and manufacturing of automobiles and auto components. In this article, we will look at the Nifty Auto Index and its characteristics.
What is the Nifty Auto Index?
The Nifty Auto Index tracks the performance of the top publicly listed automobile companies in the National Stock Exchange (NSE) of India. It provides investors, traders, and analysts an insight into the performance of the Indian automotive sector.
The index comprises 15 companies across segments in the automotive industry including manufacturers of four-wheelers, two-wheelers, auto components as well as commercial vehicles.
The companies included in Nifty auto are Amara Raja Batteries Ltd, Ashok Leyland Ltd, Bajaj Auto Ltd, Balkrishna Industries Ltd, Bharat Forge Ltd, Bosch Ltd, Eicher Motors Ltd, Exide Industries Ltd, Hero MotoCorp Ltd, MRF Ltd, Mahindra Mahindra Ltd, Maruti Suzuki Ltd, Motherson Sumi Wiring India Ltd, TVS Motor Company Ltd and Tata Motors Ltd.
You can analyze the performance of all the companies on Tradingview India. It also offers you access to Nifty Auto Chart to analyze the stocks and make a decision.
Characteristics of the Nifty Auto Index
With an understanding of what the Nifty Auto index is, let us now look at the characteristics that distinguish it from others. These include
1. Liquidity
The companies that are a part of the Nifty Auto Index are well established and hence, they are actively traded in the market. As a result, the index is highly liquid and the traders can buy and sell the securities at any time.
2. Diversification
There is a huge diversification in the Nifty Auto Index as it comprises companies across segments in the automotive industry such as two-wheelers, four-wheelers, and commercial vehicles.
As a result, the investment is diversified and the risk is reduced for all traders and investors. It means that even if one company does not perform well, the investor can depend on other companies for profits.
3. Volatility
The performance of the Nifty Auto Index is influenced by market conditions, consumer preferences, and economic changes. Besides these, regulatory changes and global factors also influence it.
4. Investment Insights
Only companies that meet the regulatory requirements of NSE are allowed to be a part of the index. As a result, any automobile company that falls short of the target is replaced by other growing companies.
5. Growth Prospects
Since the index consists of the top companies in the automobile industry, they are expected to grow immensely in the future. As a result, investing in the Nifty Auto Index has the potential to make you earn good profits in the long run.
Conclusion
The Nifty Auto Index is a good option for investors and traders looking to earn profits while getting the benefits from investment diversification. It comprises the top companies that also provide an insight into the performance of the auto industry.
When looking to begin investing in the Nifty Auto Index, look no further than Dhan, one of the leading online trading and investing platforms in India.
