Also, auto makers’ earnings are expected to receive a boost from an increase in volume sales at higher average prices. This is due to the improved share of higher priced vehicles and a margin expansion resulting from moderating raw material prices. Synopsis Local investors are also displaying confidence in auto stocks, similar to their foreign counterparts. Data compiled by Motilal Oswal shows that the allocation to auto stocks in local funds reached a multi-month high of 8.2% in June 2023. ET Intelligence Group reports that institutional investors are increasing their allocation to the auto sector due to strong earnings growth, which could contribute around 3 percentage points to the Nifty’s earnings for the current fiscal year. NSDL data reveals that the weight of auto companies in the portfolios of foreign investors reached a record high of 6.5% at the end of June 2023.
Auto sector: Allocations within the auto industry reach unprecedented levels
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