FMCG sector's defensive cloak feels tear of market forces

The fast-moving consumer goods (FMCG) sector is losing its status as a defensive sector.

- KRISHNA KANT

Historically, FMCG stocks have outperformed in a falling market, providing downside protection to portfolios.

However, during the current market selloff, the FMCG index has underperformed the broader market. The National Stock Exchange (NSE) Nifty FMCG Index is down 13.6 per cent since the end of September, when the equity market peaked, compared to an 8.7 per cent decline in the benchmark NSE Nifty 50 during the same period.

The FMCG sector has continued to lag for the second consecutive month in November. The sectoral index is down 4.3 per cent month-to-date, compared to a 2.7 per cent decline in the Nifty 50. On Tuesday, the FMCG index dropped by 1.6 per cent, closing at ₹56,902.6, while the Nifty 50 declined by 1.07 per cent on the same day.