Fast Moving Consumer Goods (FMCG) stocks are trading weak on Tuesday with the sectoral index down 1.9 per cent. FMCG index is among the top sectoral losers. Sensex stock Nestle is down more than 3 per cent.
Colgate Palmolive is down almost 4 per cent. Honasa Consumer is down 3.7 per cent, Tata Consumer is down 3.4 per cent, Patanjali Foods is down 3.2 per cent, United Breweries is down 3 per cent, Godrej Consumer is down more than 2 per cent, Britannia is down more than 2 per cent.
BSE Sensex is down more than 600 points on broad based selling. Most sectoral indices are trading in the red.
Corporate commentary on the FMCG sector has highlighted the muted demand setting prevailing in Q4FY24, which has been projected by data agencies for CY24, Emkay Global Financial Services said in a recent report.
Nielsen, which tracks retail data, is building a case of 4.5-6.5 per cent value growth for the sector. Kantar, which tracks household consumption data, echoed the same muted outlook, the report said.
With the El-Nino effect remaining till May-24 (agri growth is projected at 1.8 per cent in FY24; a seven-year low), and expectation of no material shift in consumption from elections (as in the past), demand outlook remains weak for 1HFY25, Emkay Global Financial Services added.
BSE Sensex was trading at 72,161.54 points in the morning session, down 586.88 points. Nestle is down more than 3 per cent while TCS is down more than 2 per cent after buzz of a block deal in the stock.
V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said in the near-term a change in the global market construct will happen if the Fed sends a hawkish message stronger than market expectations. This cannot be ruled out since the declining trend in US inflation has been arrested in the last two months and the Fed is always known to respond to "incoming data and evolving outlook." The spike in the dollar index and the US bond yields reflect this concern.
Investors may wait for clarity to emerge on the Fed response on Wednesday.
The resilience of the US market supported by the surprisingly robust economy is the foundation of the ongoing global market. The end of the decades-long deflation in Japan and the Nikkei index posting record highs also has been a supporting factor, he said.
Deepak Jasani, Head of Retail Research, HDFC Securities, said investors in Asia will be closely monitoring China, where the top securities regulator said the defaulted developer at the heart of the nation's real estate crisis falsely inflated revenue by more than $78 billion in the two years leading up to its failure.
Shares in the Asian-Pacific region were trading under pressure as investors await cues from various central bank decisions over the week, starting with the Bank of Japan, he said.
(With inputs from IANS)
