Nifty FMCG index rises to record high; Here’s what driving the index

The Nifty fast-moving consumer goods (FMCG) index has outperformed other NSE sectoral indices led by ITC Ltd’s exceptional performance. The Nifty FMCG has ended in green for five straight sessions in a row this week and has passed the crucial 50,000-point mark on Friday’s trade. Apart from ITC, other stocks in the basket are also performing well. Analysts predict that this increasing trend will continue. The index is supported at a level of 49,000 to 49,500, and 52,500 may be anticipated within the next few months.

The Nifty FMCG index is continuously rising, hitting a record high on Friday. The indices ended at 50,388 points, up 1.5%.

The Nifty FMCG index increased 3.10%for the week. The highest gainer on the list was Varun Beverages Ltd, up 7.21%, followed by ITC, up 5.7%, United Spirits Ltd, up 5.1%, Dabur India, up 4.4%, and Godrej Consumer Products, up 4%.

Procter & Gamble Hygiene Ltd, Nestle India Ltd, and Colgate Palmolive (India) Ltd was some for the laggards during the week that lost 0.4% to 1%.

So far in 2023

The Nifty FMCG index has gained 14% this calendar year, with the majority of the contribution coming from heavyweight ITC Ltd, which has gained 36% so far, followed by Varun Beverages Ltd, which has gained about 28%, Godrej Consumer Products Ltd, which has risen 20%, Radico Khaitan that has climbed 15% so far, Nestle Ltd, which jumped 10%, and Britannia Industries Ltd, which has gained 8%. These are the stocks that have contributed the most to the index so far this year.

Analysts claim that over the past year, there has been a good overall trend in the FMCG space. Although there have been a few corrections to the index, it has been purchased.

«It’s important to remember that ITC, which has the most weight in the FMCG industry, is where the majority of gains are coming from. ITC has been a stock that has significantly contributed to this uptick in the FMCG index, if you look at it. Since ITC has been steadily rising for the past year or year and a half, there haven’t been any significant corrections, which makes the FMCG index’s uptrend fairly smooth. In contrast, there have been more stock-specific moves if you look at the other FMCG stocks besides ITC. Even if some of the stocks are performing well, others have not increased,» said Ruchit Jain, Lead Research Analyst at 5paisa.

On June 17 of last year, the FMCG index reached a 52-week low of 36,024. The index has increased by more than 13,000 points since that time. ITC is given a weight of over 32% in the FMCG index.

So far this year, Dabur India has underperformed by 3.5%, United Spirits Ltd has declined by 2%, and United Breweries Ltd has dropped by 14%.

The heavyweight Hindustan Unilever Ltd (HUL) has underperformed this year; it has increased by just 3.5%. But in contrast to other well-known FMCG companies, it hasn’t generated positive returns.

Nifty FMCG is up 8% this year so far; how to play this sector amid macro uncertainty?



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Updated: 26 May 2023, 05:33 PM IST

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