Top three stocks to watch out for from the FMCG sector in June!

The cherry on the top is that it has given a staggering average return of 10.16 per cent.   

For the markets, the month of May was full of surprises. In the first half of the month, just ahead of Federal Reserve meeting, RBI took a pre-emptive step and at an unscheduled, seemingly ‘urgent’ meet, announced a 40-bps hike in rates.  

On one hand, it was the apex bank of India, which surprised the markets while on the other, it was continuous selling pressure from the FIIs that brought the bulls to kneel as markets tanked sharply for the major part of the month of May. However, as the saying goes ‘nothing lasts forever’, this turned out to be true for the benchmark indices as well. In the latter half of the month, the markets trimmed their losses, but despite that, Nifty declined 3 per cent.   

Talking about the sectoral performance, it was a sea of red but even in that, two sectors stood out namely, autos and FMCG as they ended the month on a high note. Auto emerged as the top-performing sector, followed by FMCG.   

Interestingly, fuelled by a good monsoon forecast, the FMCG sector anticipates a revival in demand and moreover, the expectation of fading inflationary pressure in the coming month would mean that margins may improve from hereon. Hence, stocks from this sector are likely to be on the radar. However, do you want to know which three stocks have historically worked well in the month of June? 

Here is the list of the top three stocks from the FMCG sector for the month of June: 

Tata Consumer Products: The stock has retraced nearly 61.8 per cent retracement of the prior downmove. Going ahead, if the stock manages to sustain above the level of Rs 782, it should be on your watch list. Furthermore, the stock has delivered six consecutive positive years in the past 20 years in the month of June and closed 15 times in green out of 20 instances. The cherry on the top is that it has given a staggering average return of 10.16 per cent.   

Hindustan Unilever: The stock has been trading above its 20, 50, and 100-DMA. Moreover, it has bounced back over 20 per cent from the lower levels, which were seen in the month of March and if we go by the performance of the stock in the month of June, we can expect the upmove to continue in the stock as it closed in the green for 14 times in the past 20 years in the month of June with an average return of 7.81 per cent.   

Colgate Palmolive (India): Technically, the stock is forming a basing pattern after a good run-up from the lower levels and recently, it did attempt to break above the base pattern. However, it failed to see any follow-through move but, given the fact that the month of June usually turns out to be good for the stock, we expect it to make your portfolio strong and bright as out of 20 instances, the stock has closed in green 14 times with an average return of 7.86 per cent.