Import duty hike: Consumer Electronics and footwear stocks in focus

In a bid to reign the widening fiscal deficit gap and curb the depreciation of the Indian Rupee, the government has increased import duty on several discretionary goods. The 19 consumer items on which the government has increase tariffs include air conditioners, refrigerator, washing machines, footwear, jewellery articles, precious metal wares and bath accessories. 

Reacting to the news, consumer discretionary electronic goods companies which import goods dipped, while the companies that domestically manufacture their goods appreciated. Havells India and Voltas were trading below 3 per cent, while Orient Electric and Symphony were trading below 2 per cent, in Thursday's morning session. On the other hand, the stocks of IFB Industries, Amber Enterprises, Dixon Technologies, Blue Star Limited were upbeat with gains of more than 3 per cent to 1 per cent. 

Among footwear stocks, Liberty Shoes was trading with gains of more than 5 per cent, while Bata and Sree Leathers were trading up by more than 2 per cent. Jewellery retailer Titan Company was up by more than 4 per cent and bathroom fitting company Cera Sanitaryware was also gaining in the morning session.

Recently the stocks of consumer discretionary companies gained immense popularity among investors as they are expected to show double-digit growth of around 25 per cent in the near terms. Owing to this some stocks were trading at comparatively higher valuations and this news seems to have brought in some much-needed correction.