Fast-moving consumer goods (FMCG) stocks have largely underperformed so far in 2024 due to weak base rural demand, adverse weather conditions, and lower agri-production growth. High commodity prices have also played a spoilsport for the sector, which is dependent on raw materials—either manufactured in the domestic markets or imported. Crude oil is a major commodity imported from Russia and theMiddle East, which impacts the volume for several FMCG firms.
Despite an overall bullish sentiment in Indian markets, the consumer goods sector has delivered negative returns to investors and witnessed a crash in prices on a six-month to-one-year basis periods. Coming to individual stocks, FMCG majors Hindustan Unilever Ltd (HUL) and Asian Paints have emerged as the top Sensex losers in the first six months of 2024 – when the BSE benchmark covered its record run from 70,000 to the historic 80,000-mark.
On the other hand, when domestic benchmark indices Nifty 50 and Sensex crashed over six per cent on June 4, logging their biggest single-day fall in four years, the FMCG pack were among the few stocks that recorded gains, defying frontline sentiments. D-Street analysts have warned traders against playing on the sudden movement and refrain from short-term intraday strategies due to a decline in prices on a long-term basis.