FMCG Stocks Surge Despite Market Slump Amid Tariff Concerns
FMCG stocks emerged as a key bright spot in an otherwise subdued market session on Tuesday, as investor sentiment was rattled by concerns over potential tariff hikes from the US targeting Chinese goods. The broader equity market faced pressure, with the BSE Sensex dropping by 413.46 points to close at 73,511.85, while the NSE Nifty slipped 110.55 points to settle at 22,302.50.
Markets were further weighed down by weak global cues and uncertainty around inflationary trends, overshadowing the Reserve Bank of India’s recent announcement of a 25 basis point rate cut in its marginal standing facility (MSF). Traders appeared cautious as global growth concerns resurfaced following signals of escalating trade tensions.
Despite the broader market’s bearish tone, FMCG companies attracted investor attention, reflecting expectations of steady demand and relative insulation from global headwinds. The Nifty FMCG index saw a sharp gain of over 1.2%, outperforming all other sectoral indices. Gains were led by major players such as ITC, Britannia Industries, Hindustan Unilever, and Nestlé India.
ITC advanced 2.5% amid renewed optimism in its core cigarette and packaged foods businesses. Britannia Industries rose 2.1%, driven by improved margin outlook and consumer resilience in essential-snacking categories. Similarly, Hindustan Unilever and Nestlé India posted modest gains of around 1% each, underpinned by their strong rural distribution networks and diversified product portfolios.
Analysts suggest the uptick in FMCG shares signals a defensive rotation by investors towards non-cyclical sectors with predictable cash flows. “The sector is viewed as relatively stable during periods of macroeconomic uncertainty. Pricing power and volume-led growth continue to support these businesses,” noted a senior analyst at a Mumbai-based brokerage.
While metals, IT, and auto sectors bore the brunt of profit booking, with the Nifty Metal Index falling over 2%, FMCG’s resilience points to strategic investor preferences amid global trade volatility. Going forward, analysts expect the sector to maintain its outperformance, particularly as brands continue to pursue innovation and rural demand shows signs of recovery.
With inflation dynamics and global trade policies still in flux, FMCG stocks may continue to offer