Nifty FMCG stocks tumble 3 per cent, HUL and ITC dive

The FMCG sector is considered defensive and resilient. However, recently the FMCG stocks were among the top losers on the NSE. The Nifty FMCG index closed down by 1.73 per cent at 30,811.60.

The stocks that took the biggest hit include Marico, Dabur India, Godrej Industries and United Breweries, down 3.27 per cent, 3.02 per cent, 2.53 per cent and 2 per cent, respectively. In addition, Godrej Consumer Products, Hindustan Unilever, United Spirits, Britannia Industries and ITC dipped notably by 1.88 per cent, 1.63 per cent, 1.57 per cent, 1.43 per cent and 1.37 per cent, respectively.

The shares of Procter & Gamble Hygiene and Healthcare were down 0.89 per cent, while those of Colgate Palmolive (India) and Jubilant Foodworks were down 0.85 per cent and 0.31 per cent respectively. The shares of Tata Global Beverages, GlaxoSmithKline Consumer Healthcare and Emami fared better in comparison as they rose by 1.59 per cent, 0.75 per cent and 0.13 per cent respectively.

The persistent depreciation of the Indian rupee, global disruptions and inflation driven by the unstable crude oil prices swayed the market sentiment unfavourably.

In the recent past, increased government spending and falling commodity prices spurred the demand for FMCG goods in the last few years. Besides, weakness in investment expenditure prompted a demand for defensive stocks. It has been noted that FMCG stocks were trading higher than their historical valuations which is not only difficult to sustain but also poses a risk to expansion and may drive the P/E ratio down.

The benchmark NSE Nifty 50 index closed down by 151.00 points or 1.30 per cent at 11,438.10. HCL Technologies, Axis Bank, Yes Bank, Cipla and Infosys were among the top gainers of Nifty, while Bajaj Finance, Indiabulls Housing Finance, Bajaj Finserv, Sun Pharma and BPCL were among the top losers on Nifty. The BSE Sensex tanked and closed at 37,922.17, down 467.65 points or 1.22 per cent on Monday.