Market snaps 2-day gains, selling in banking, metal and IT
At close, the Sensex was down 426.85 points or 0.53% at 79,942.18, and the Nifty was down 126 points or 0.51% at 24,340.85.
Shares of FMCG companies — that sell everything from soaps, shampoos, shoes, alcohol and cigarettes — were in a strong uptrend as investors overcame initial fears to buy into sectors where demand is inelastic and predictable.
The NSE FMCG Index gained 0.6 per cent to 20,429 points on the National Stock Exchange outpacing the 0.4 per cent rise on the main index Nifty. Thirteen out of 16 FMCG stock futures in derivatives space rose between 0.1-3 per cent on expectations that the ongoing demonetisation drive will impact the sector least as buyers will continue to purchase items of daily use.
Meanwhile, the economy continues to be under extreme liquidity stress on the heels of the government's announcement that Rs.1,000 and Rs.500 notes would no longer be legal tender from November 8. As a consequence, markets took a beating in the last three weeks on fears that the absence of 86 per cent liquidity from the system would result in a crash in demand.
Futures of jewellery and watch maker Titan Company surged 3 per cent to Rs.324.40. Godrej Consumer Products rose 2.6 per cent to Rs.1,455. Pidilite Industries gained 1.9 per cent to Rs.644. Tata Global added 1.3 per cent to Rs.123.80 and Hindustan Unilever rose 1.6 per cent to Rs.849.75. Similar gains were seen on Dabur, Marico, Asian Paints and Bata India.
FMCG stocks that slipped in trade included Britannia, Colgate and ITC.
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