FMCG Stocks Buck Market Slump Amid US-China Tariff Escalation
Indian equity markets slumped across sectors as trade tensions between the US and China intensified, but fast-moving consumer goods (FMCG) stocks emerged as relative outperformers amid the broader sell-off.
The benchmark BSE Sensex lost 372 points to close at 37,090, while the NSE Nifty dropped 130.7 points to finish at 11,148. Investor sentiment weakened sharply following retaliatory tariff announcements from China after the US raised duties on $200 billion worth of Chinese imports. The escalation triggered global risk aversion, leading to capital outflows from emerging markets, including India.
Despite the rout, key FMCG counters showed resilience. Hindustan Unilever gained 1.44%, ITC rose 0.41%, and Nestlé India advanced 0.38%. With the Nifty FMCG index edging up 0.11%, the sector stood nearly alone in positive territory, contrasting with deep losses across banking, metals, and realty indices.
Analysts attributed the sector’s defensive appeal to its stable demand profile and low sensitivity to macro uncertainties. “FMCG companies are relatively insulated during high volatility phases, as their revenues stem from essential consumption that remains largely unaffected by external shocks,” said a Mumbai-based equity strategist.
On the contrary, interest rate-sensitive sectors bore the brunt of the correction. PSU banks led the losses, with Punjab National Bank and Canara Bank shedding over 4%. NBFCs like Power Finance Corporation and REC also saw steep declines of around 5% each. The broader BSE Midcap and Smallcap indices fell 1.3% and 1.5% respectively.
Analysts expect volatility to persist until clearer signals emerge from global trade negotiations. In the meantime, domestic institutions are expected to remain cautious, and foreign institutional investors could continue to pare holdings in risk assets.
The relative strength of FMCG stocks highlights the sector’s importance as a hedge during geopolitical and economic turbulence. For brand owners and market strategists, this trend underscores the resilience of essential consumer categories, which may present expansion and portfolio-strengthening opportunities in an otherwise challenging macro environment.